IWDA vs IUSQ: Which UCITS ETF is Best for Indian Investors?

IWDA is BlackRock's iShares Core MSCI World UCITS ETF. As an Ireland domiciled, accumulating fund with approximately $75 billion in assets (as of late 2024), it is a highly liquid and widely utilized ETF designed to track the MSCI World Index for broad equity exposure across 23 developed markets.

IUSQ is BlackRock's iShares MSCI ACWI UCITS ETF. It shares the exact same 0.20% Total Expense Ratio and the same accumulating structure, but tracks the MSCI All Country World Index to provide comprehensive exposure across both developed and emerging markets, holding over $16 billion in assets.

Investors are often confused between these two because they are both broad global equity funds from the same provider that cost exactly the same on paper. Here is how and where their underlying portfolios differ, and which one makes more sense as the anchor for your long-term investment strategy.

Table of contents

• What IWDA and IUSQ Have in Common
• Where They Differ
  • Index Exposure and Emerging Markets
  • Fund Size and Ticker Variations
  • Tracking Difference and Index Variants
  • Performance Drivers and Replication Costs
• Which Should Indian Investors Buy?
• Already Holding One? Should You Switch?

What IWDA and IUSQ Have in Common

• Both are managed by BlackRock under the iShares brand and carry the same 0.20% Total Expense Ratio.
• Both use physical optimized sampling to replicate their indices and are heavily weighted in US mega-cap technology stocks like Apple, Microsoft, NVIDIA, Amazon, and Meta.
• Both are Ireland domiciled. This eliminates the 40% US estate tax risk for Indian investors and leverages the US-Ireland tax treaty to reduce the withholding tax on US dividends from 30% to 15%.
• Both are accumulating funds, meaning dividends are automatically reinvested internally to maximize long-term compounding without creating an annual taxable event.
• Both share the same Indian tax treatment: Short-Term Capital Gains (STCG) at your applicable slab rate if sold within 24 months, and Long-Term Capital Gains (LTCG) at 12.5% if held longer.
• Both are readily available on global platforms like Interactive Brokers and Paasa.

Where They Differ

Index Exposure and Emerging Markets

The most significant difference lies in their geographic mandates. IWDA tracks the MSCI World Index, which exclusively covers 23 developed markets. It holds over 1,400 stocks and is heavily concentrated in the United States, carrying a US weighting of over 70%.

IUSQ tracks the MSCI All Country World Index (ACWI). This index covers approximately 85% of the global investable equity universe by including both the 23 developed markets and 24 emerging markets. Because of this emerging market inclusion, IUSQ holds a broader basket of over 2,300 stocks, and its US concentration is slightly diluted to roughly 63%.

Fund Size and Ticker Variations

IWDA launched in 2009 and currently holds over $75 billion in assets, making it roughly five times larger than IUSQ. While both ETFs are highly liquid cornerstones for any portfolio, IWDA's massive size and longer history provide exceptionally tight bid-ask spreads for large execution orders.

Additionally, while IWDA is the globally recognized ticker for the developed world fund, IUSQ goes by different names depending on the exchange. IUSQ is the ticker used on European exchanges like Xetra in Germany. If you are trading on the London Stock Exchange (LSE), you will find the exact same fund trading under the ticker SSAC.

Tracking Difference and Index Variants

While both funds charge a 0.20% TER, their tracking differences show that they actually outperform the Net Return variant of their respective benchmarks. The MSCI Net Return indices assume the maximum withholding tax rate applicable to non-resident institutional investors is paid on dividends for each specific country. For the US dividend portion of the index, this assumes a 30% tax. Because these Irish-domiciled ETFs benefit from the 15% US treaty rate on those US dividends, and because BlackRock generates additional internal revenue through securities lending, both funds comfortably offset their management fees.

Historically, IWDA maintains a tracking difference between -0.01% and -0.08%. IUSQ performs slightly better against its net benchmark, maintaining a tracking difference between -0.05% and -0.10%.

Performance Drivers and Replication Costs

Because IUSQ includes 24 emerging markets, buying every single small, illiquid global stock would be prohibitively expensive. BlackRock uses an optimized sampling technique for both funds, but this is particularly crucial for IUSQ to manage transaction costs while keeping tracking error minimal.

Over the last five years, performance for both funds has been driven almost entirely by the US technology sector. The emerging market allocation in IUSQ acts as a diversifier, but it has served as a slight drag on aggregate performance compared to the pure developed market focus of IWDA.

Which Should Indian Investors Buy?

For investors seeking a one-stop, single-ticker solution for global equity exposure, IUSQ is the superior choice. It naturally rebalances between developed and emerging markets based on global market capitalization, capturing the entire investable world without requiring any manual adjustments on your part.

You should pick IWDA if you prefer absolute control over your portfolio's geographic allocations. By holding IWDA, you secure a highly efficient, liquid anchor of developed markets. This gives you the freedom to either avoid emerging markets entirely or add a separate emerging market ETF at a specific weight of your own choosing.

Ultimately, do not overthink it. Both are top-tier, highly efficient vehicles for building long-term wealth. Whether you choose the built-in global diversification of IUSQ or the targeted developed market focus of IWDA, picking either one puts you on the right path.

Already Holding One? Should You Switch?

If you already hold IWDA or IUSQ, do not sell your position just to switch to the other. Selling your shares triggers a capital gains event in India. If you have held the ETF for less than 24 months, you will pay STCG at your slab rate. If you have held it longer, you will pay LTCG at 12.5%.

The structural differences between the two are not large enough to justify the taxes you will pay on the sale and the brokerage fees required to switch. If you currently hold IWDA and decide you want emerging market exposure, simply purchase a dedicated emerging market ETF alongside it, or direct all future investments into IUSQ while leaving your existing shares alone.

Building your portfolio with Ireland-domiciled UCITS ETFs is the single most tax-efficient way for Indian investors to access global markets. You can read our complete LRS guide to learn how to fund your global account seamlessly.

About Paasa

Paasa is a global investing platform built specifically for Indian residents and returning NRIs. We bridge the gap between complex global brokerages and the specific, everyday needs of Indian investors.

• Estate Tax Protection: Paasa gives you direct access to Ireland-domiciled (UCITS) ETFs, including IWDA and IUSQ. This allows you to legally shield your long-term wealth from the 40% US Estate Tax.
• Seamless Funding & LRS: We handle the LRS compliance process and secure competitive FX rates, ensuring your capital reaches the global markets efficiently.
• The Compliance Advantage: We generate ready-made capital gains and Schedule FA tax reports tailored for the Indian tax system, so you can focus entirely on growing your portfolio instead of managing spreadsheets.