State Street SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC)

You cannot decarbonize the world with this fund. You can only decarbonize your portfolio relative to a pure market-cap baseline.

State Street SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC) holds a broad portfolio of global large-cap companies that have been screened and tilted to favour firms with lower carbon emissions and stronger alignment with the Paris Agreement climate goals. It is a climate-focused ESG fund from State Street Global Advisors, one of the largest asset managers in the world, offering diversified global equity exposure to investors who believe climate risk matters to long-term portfolio returns.

The fund tracks the MSCI ACWI Climate Paris Aligned Index, which starts with the MSCI All Country World Index — roughly 2,500 large and mid-cap companies across developed and emerging markets — and applies a series of screens. It excludes companies with the highest scope 1 and 2 greenhouse-gas emissions intensity relative to their sector, removes fossil-fuel producers and other high-emissions businesses, and weights remaining companies to tilt toward those with stronger climate alignment metrics. The result is not a narrow, climate-only portfolio; it is a diversified global equity index that looks and behaves much like a standard world-equity benchmark, but with fossil-fuel exposure removed and climate-risk factors built into the weighting.

That means broad sector exposure to technology, financials, healthcare, industrials, and consumer businesses — just screened and tilted. State Street Global Advisors (SSGA), part of State Street Corporation, is the fund sponsor and index manager, one of the largest asset managers globally and a major provider of thematic and ESG-focused ETFs. NZAC trades on the NASDAQ under its ticker with good liquidity, benefiting from State Street’s scale and brand recognition in the ESG space.

The expense ratio is typically in the 0.15% to 0.25% range — modest for an actively screened fund but higher than a plain passive global index ETF, reflecting the cost of maintaining the climate-focused screens and tilts. The fund assumes that companies aligned with Paris Agreement climate targets — those with lower emissions intensity, stronger transition plans, and lower exposure to carbon-price shock — will generate better long-term returns than high-emission peers in a world where carbon pricing, regulation, and stranded-asset risk become increasingly material. It does not make a prediction about whether climate change will happen, only that climate-related policy and market repricing is already here and will continue.

By excluding or underweighting fossil-fuel companies and other high-emissions sectors, NZAC gives up some diversification and may lag in periods when carbon-heavy industries outperform — as happened during energy-price spikes in 2021 and 2022. The fund has lower volatility than an unscreened world equity index in some periods and higher in others, depending on the relative performance of favoured climate-aligned sectors. The debate about ESG effectiveness and climate risk pricing in capital markets directly affects how the market values the companies NZAC holds.

Research NZAC by reading the prospectus and understanding the MSCI ACWI Climate Paris Aligned Index methodology — what emissions thresholds trigger exclusion and how the tilt is implemented. For climate-focused investors seeking broad global diversification, NZAC offers a buy-and-hold approach that bets carbon risk is priced into markets and will increasingly matter to returns. For skeptics of ESG as a return driver, it is a concentrated bet against proven high-emission businesses that may outperform in carbon-cheap periods. Either way, the fund is a statement: you are willing to accept lower diversification and potential underperformance in energy-heavy years in exchange for portfolio alignment with climate policy and carbon-price expectations.