Am I too exposed to the US – and does it matter?
The US makes up a large share of many global funds and portfolios. We explain why this is the case and whether being heavily exposed to the US is something to worry about.
If you've ever looked at where a global fund or portfolio invests, you might have noticed that the US makes up a large share – and wondered why.
This can feel surprising, or even a little uncomfortable. Recently, headlines have warned that US shares are expensive, overvalued or heavily reliant on a handful of technology giants. You might wonder if you've ended up taking a bigger risk on one country than you intended.
But the reality is more straightforward than it might seem. A large US allocation isn't a mistake or an oversight – it reflects how the global stock market is structured today.
In this article, we explain why the US plays such a dominant role, why this kind of concentration isn't necessarily a problem and what it means for your long-term investments.
Why the US plays such a big role in global investing
Most global funds use what's called market-capitalisation weighting. Put simply, that means they invest more in bigger companies and markets, and less in smaller ones. It's a simple approach that reflects how global stock markets are made up today.
Right now, the US represents roughly 62% of the MSCI All Country World Index (ACWI)1, an index which tracks large and medium-sized companies across a wide range of countries around the world.
So why is the US share so large? In short, its companies are bigger and, on average, more profitable than those in many other regions. The US is home to many of the world's most valuable firms, including Apple, Microsoft and Amazon, and has a strong presence in fast-growing sectors, like technology, which have driven returns for the past 25 years.
You can see its influence in the chart below. The MSCI ACWI has returned around 250% since 2016. If you strip out the US the return is still significant, but the figure falls to 165% over the same period.
How removing the US can impact global stock market returns
Past performance is not a reliable indicator of future results. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.
Notes: Index returns are from 1 January 2016 to 30 April 2026 and include the reinvestment of all net dividends. Returns do not include the impact of fees. Both indices were rebased so that 1 January 2016 equals 0.
Source: Vanguard, calculations in GBP based on data from Bloomberg as at 29 May 2026.
If you own a global index fund, you're not "betting on the US". You're owning the global market as it exists today.
Why do a handful of companies dominate?
You may have heard concerns about a small number of large US companies – particularly the so-called "Magnificent 7" tech stocks2 – driving a significant share of recent returns. This can feel risky, as though the market depends on just a handful of names.
But this kind of concentration is not unusual. For example, an analysis of over 64,000 publicly listed companies between 1990 and 2020 found when you added up how much each company added or lost for investors, a small group of just 2.4% of companies drove all the stock market’s overall gains over that period3.
This reflects how markets work. Companies that succeed tend to do so spectacularly, compounding returns over time. Many others deliver more modest results – or even losses.
If you’re concerned about relying on a relatively small number of companies, it’s also important to consider how this looks in a globally diversified portfolio. While the Magnificent 7 companies make up a large share of the US market, their weight is smaller at a global level. US stocks represent around 62% of the MSCI ACWI by market value, and the Magnificent 7 account for roughly a third of that4. This means they represent around 21% of the global index overall.
Exposure will be lower still in a balanced portfolio of, say, 60% shares and 40% bonds5, where the allocation to the Magnificent 7 falls to just over 12%. Seen in this context, exposure is meaningful but less concentrated than it might first appear.
It’s also worth noting that today’s largest companies aren’t all the same. The Magnificent 7 span different industries (cloud computing, electric vehicles, social media, e-commerce), earn money in different ways and their share prices don’t all move in the same way.
Headlines can make concentration sound alarming, but it often reflects where growth is being created in the economy.
Does this mean I'm too exposed to the US?
Not necessarily. A larger US weighting doesn't automatically mean your portfolio is poorly diversified.
Global funds spread your money across hundreds, sometimes thousands, of companies in many different countries. Even if the US accounts for around 60% of your portfolio, the rest is invested across regions such as Europe, Japan, Canada, emerging markets and more.
Additionally, many "US" companies earn a large share of their revenues internationally. Apple sells iPhones in China and Europe. Microsoft's cloud services are used worldwide. Equally, plenty of non-US companies are listed on US stock exchanges. Where a company is listed doesn’t always reflect where it earns its money.
Rather than focusing too much on a single measure like US exposure, it’s more important to look at your portfolio as a whole, including how it’s diversified across regions, sectors and asset types (such as shares and bonds). The aim is to ensure your portfolio fits your goals and attitude to risk.
It can be tempting to react to recent performance, whether good or bad. But markets move in cycles, and adjusting your approach based on headlines can do more harm than good. Over the long term, staying invested and maintaining a disciplined approach tends to matter more than trying to get every allocation exactly right.
The bottom line: Focus on the bigger picture
A large US allocation is a common feature of many global portfolios today, not something unusual that needs fixing.
Rather than focusing on one region or recent market movements, it’s more helpful to look at your portfolio as a whole and whether it’s built for your long-term goals.
Markets will always change and headlines will come and go. Staying focused on your long-term plan is likely to matter far more than reacting to short-term noise.
1 MSCI ACWI as at 30 April 2026. The MSCI ACWI captures large and medium-sized companies across 23 developed markets and 24 emerging markets countries.
2 The Magnificent 7 is a label for seven well‑known US companies: Alphabet (Google), Amazon, Apple, Meta (Facebook), Microsoft, Nvidia and Tesla.
3 Hendrik Besseminder, Long-Term Shareholder Returns: Evidence from 64,000 Global Stocks, Financial Analysts Journal (2023).
4 Vanguard analysis of Bloomberg data as at 29 May 2026.
5 Bonds are a type of loan issued by governments or companies, which typically pay a fixed amount of interest and return the capital at the end of the term.
Investment risk information
The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.
Past performance is not a reliable indicator of future results.
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