SpaceX Blasts Into Vanguard's All-World ETF as Tech Exposure Hits All-Time High

The Vanguard FTSE All-World UCITS ETF has completed its annual index overhaul, and this year’s rebalancing was anything but routine. FTSE Russell scrapped its customary buffer zones of one and three percent, allowing far sharper adjustments to market capitalisation. The result: SpaceX, the private rocket company, enters the fund after its June initial public offering, alongside the AI-infrastructure provider CoreWeave. With over 3,750 holdings, the reshuffle ranks as one of the most extensive in the fund’s history.

The new weighting cements technology’s stranglehold on the index. The IT sector now commands 39.4 percent of global developed-market indices — eclipsing the previous record of 35 percent set at the peak of the dot-com bubble in March 2000. Inside the ETF, the top ten equity positions account for 24.51 percent of total assets. Seven stocks alone — Nvidia, Microsoft, Apple, Amazon, Alphabet, Meta and Tesla — represent between 32 and 35 percent of the entire index. That concentration has propelled the fund 12.14 percent higher since January and 26.19 percent over the past twelve months. It recently traded at €163.30, roughly two percent below the all-time high of €167.10 recorded on 22 June.

Micron Technology epitomises the AI-driven surge that is rewriting the semiconductor landscape. The chipmaker posted third-quarter 2026 revenue of $41.5 billion, a 346 percent jump from a year earlier, fuelled by insatiable demand for artificial-intelligence hardware. Semiconductor indices have climbed 85 percent since March. Yet not every big allocator is comfortable with the speed of the rally. GQG Partners, which oversees $162 billion, has already sold out of AI-infrastructure positions, labelling the current environment a “dot-com bubble on steroids”. The Nasdaq’s recent 4 percent weekly slide suggests profit-taking is spreading.

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A structural quirk separates the Vanguard product from its MSCI rivals. FTSE Russell has classified South Korea as a developed market since 2009, whereas MSCI still treats the country as an emerging market, citing currency risks and short-selling bans. That distinction means Korean equities carry a 2.9 percent weighting in the ETF — Samsung Electronics alone contributes roughly one percent of the fund’s entire volume. For globally minded investors, the choice of index provider can therefore tilt their exposure to the world’s fourth-largest economy. Meanwhile, the composition of emerging-market benchmarks is shifting toward AI: Taiwan now accounts for 26 percent of the MSCI Emerging Markets Index, South Korea about 23 percent, while India has fallen below 11 percent. Analysts at ClearBridge argue this trend could benefit non-US equities in the second half of the year, potentially easing the ETF’s dependence on American mega-caps.

Macro pressures add another dimension. Brent crude is trading at $72.51 a barrel, lifted by geopolitical tensions between Iran and the United States. Nearly 80 percent of sovereign wealth funds surveyed express concern about the long-term reserve status of the US dollar and are rotating capital into energy infrastructure. If that rotation accelerates, it could dilute the technology-heavy flavour of global indices and provide the All-World ETF with a broader, more defensive footing.

Managing such a large portfolio — more than €41 billion in assets under management — requires efficiency. Vanguard uses a physical sampling approach, buying a representative basket of the most liquid stocks rather than every single security. That strategy keeps the tracking error at an extraordinarily low 0.05 percent, ensuring that index changes like this year’s are passed through to investors with minimal drag.

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