ACWI: A Global Diversified Equity ETF That Offers Plenty Of Upside Potential

Summary

• ACWI is a source of global equity beta, with a net expense ratio of 0.32%.
• The fund has over 2,300 holdings and trades at a forward price/earnings ratio of "just" 15.52x.
• Assuming a roughly constant valuation, the implied IRR for ACWI investors over the next few years could well exceed 12%.
• That suggests elevated equity risk premiums, which would match recent bearish price action across global equity markets.
• On the basis of valuations alone, I am bullish on ACWI and global stocks. Upside potential is in the range of 30-50%, which could be achieved in the next 6-12 months, bar a significant recession or unexpected deterioration of earnings expectations.

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iShares MSCI ACWI ETF (NASDAQ:ACWI) is an exchange-traded fund that provides investors with exposure to a portfolio of international stocks in both developed and emerging markets. ACWI stands for All Country World Index. As the

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.