Beginner Guide

US vs Global: Where Should You Invest First?

Q: What is the difference between a US-only ETF and a global ETF?

A US-only ETF holds companies listed in the United States, while a global ETF holds companies from many countries, usually weighted by market size. US-only funds concentrate exposure in one market. Global funds spread exposure across multiple regions and typically still include a large US allocation.

Q: Has the US market historically outperformed global markets?

There have been long periods when US stocks outperformed and other periods when non-US markets did better. Recent history has favored the US, but there is no guarantee this continues. US-only is a bet on continued leadership, while global spreads exposure across regions.

Q: Is home bias a problem if I invest from outside the US?

Home bias is the tendency to concentrate in a familiar market. A modest tilt is common, but extreme concentration in a single country increases exposure to that country’s economic, political, and currency risks. Global funds reduce single-country concentration.

Q: Can I mix US and global ETFs in the same portfolio?

Yes. Some investors use a global ETF as a core holding and add a separate US ETF to tilt more toward the US. Because global ETFs often already include a large US weight, you should consider the combined exposure to avoid overshooting your target.

Q: Which is better long term: US-only or global?

No one can reliably predict which will outperform in the future. US-only may win if US companies continue to dominate; global may win if leadership rotates to other regions. The more important decision is choosing an allocation you can hold through full market cycles instead of switching based on recent performance.

If you’re starting from zero, you don’t need a perfect answer. You need a simple stock exposure you can hold for years without switching every time headlines change.

Educational content only. Not personalized investment advice.

TL;DR

US-only is simple but concentrated in one country and currency.
Global spreads risk across regions, but still usually includes a large US weight.
The best choice is the one you can hold for decades without performance-chasing.

ETF CHECKLIST

How to choose a world ETF (MSCI World vs FTSE All-World)

One page that prevents 90% of beginner confusion: index choice, UCITS wrapper, costs that matter, and execution rules.

Open the checklist → Three-fund portfolio (UCITS) →

1) What “US vs global” actually means

When you choose a stock fund, you’re choosing which set of companies you want to own. “US” and “global” are just labels for which markets are included.

Typical building blocks

US stock fund: companies listed in the United States only (often S&P 500 or total US market).
Global ex-US fund: stocks from the rest of the world, excluding the US.
All-world fund: US + non-US stocks in one ETF, weighted by market size.

These are commonly implemented with ETFs. If you need the base concept first, read What is an ETF?

2) Why the US market matters

US stocks get attention because the US is a massive slice of global market value and many mega-companies are US-listed. If you own a global ETF, you usually own a lot of the US already.

Deep liquidity and strong market infrastructure.
Large share of global equity value (varies by decade).
Many global leaders are US-listed.

The real question is not “US good or bad.” It’s whether you want to be US-heavy or closer to a world-wide mix.

3) Why global diversification still matters

The US is still one country with one currency, one political system, and one set of risks. Other regions can lead for long stretches too.

Regional leadership rotates over decades.
Different sector mixes and demographics across countries.
Country-specific policy/regulatory shocks can hit hard.

See the data angle here: Diversification Basics (study).

4) Three simple starting options

You do not need niche country funds. For most beginners, one of these three setups is enough:

US-only: one broad US stock ETF.
US + global ex-US: one US ETF plus one “rest of world” ETF.
All-world ETF: a single fund holding both US and non-US stocks automatically.

This is not permanent. You can refine later. The first win is getting invested with a structure you won’t abandon.

5) Key factors for non-US investors

If you live outside the US, a few extra variables matter more than they do for US residents:

Currency exposure: if you earn/spend mostly in EUR, US-only adds more FX swings than a global mix.
Job risk: if your income is already tied to one country/industry, doubling down increases total risk.
Taxes and fund domicile: withholding/treaties and local taxation can change net results.
Product access: some regions can’t buy certain US-listed ETFs directly (you may use local equivalents).

Tax map here: Taxes Basics.

6) Example mixes (not recommendations)

These are rough illustrations to help you think in ranges:

100% US stocks: simplest, highest concentration in one country/currency.
70% US / 30% global ex-US: still US-tilted, but with meaningful diversification.
All-world market weight: one ETF that naturally holds a large US share plus the rest of the world.

The practical goal is an allocation you can keep through bad years without changing it.

7) Currency risk and behavior matter more than fine-tuning

From a non-US perspective, returns in your home currency move with both stock prices and exchange rates.

A reasonable global mix usually reduces “single-country” risk.
Trying to forecast currencies year-by-year is usually a waste of time.
Your behavior (staying invested) matters more than perfect splits like 60/40 vs 70/30.

8) Rebalancing (if you use more than one fund)

If you hold two funds (US + ex-US), your mix drifts as markets move. Keep it boring:

Pick a target mix (example: 70% US / 30% ex-US).
Once a year, check drift (example: more than 5–10 percentage points off).
Use new contributions or small trades to nudge back.

See the mechanics here: Rebalancing: once/year vs never (study).

9) Common mistakes

Switching US-only ↔ global every time headlines change.
Owning overlapping funds and thinking you’re diversified.
Ignoring taxes, domicile, and product access in your country.
Using the last 3–5 years of performance as your “strategy.”
Staying in cash for years because the decision feels overwhelming.

10) One-page checklist

I understand US-only vs US+ex-US vs all-world.
I chose a rough US weight I can live with for many years.
I checked my local tax rules and fund domicile basics.
I picked one ETF (or two) that match my target mix.
I have a simple rebalancing rule (or I use one all-world ETF).
I will not chase whichever region “won” recently.

The objective is not perfection. It’s a durable plan you execute for decades.

After this guide, useful next reads are: Diversification that helps · Index funds 101 · What is an ETF? · Taxes basics

MONEY GUIDES

“US vs global” is mostly a portfolio decision, but your broker and ETF wrapper determine what you can actually implement (US-domiciled ETFs vs UCITS, FX friction, and available tickers). Use these decision pages before you lock in a platform:

Best broker for US ETFs (non-US) → UCITS vs US ETFs → DEGIRO vs IBKR →

Decision rule: pick the allocation (US-only vs global), then choose the wrapper you can legally buy, then pick the broker with the least ongoing friction.

Next step: confirm how diversification changed risk historically, then make sure your taxes and broker setup match your plan.

See the diversification data → See all tax resources → Find a broker that supports your plan →

CLUSTER

Next steps: pick the global “default” and stop overthinking

How to choose a world ETF Learn

MSCI World vs FTSE All-World, EM exposure, and what matters in practice.

Three-fund portfolio (UCITS) Learn

If you want a structured global plan (equity + bonds) with rebalancing.

Diversification guide Learn

The point of “global vs US” is concentration risk and behavioral risk.

Index funds 101 Learn

Why broad index exposure is the clean default for most investors.

CLUSTER

Next steps: constraints for non-US investors (UCITS, taxes, and costs)

UCITS vs US ETFs Learn

Eligibility rules + structure differences change what you can buy.

US dividend withholding tax (non-US) Learn

Why “US exposure” can imply withholding and different tax drag.

Study: UCITS vs US ETF total drag Study

A practical “all-in cost” model: fees, spreads, FX, and tax leakage.

Fees really matter Learn

If costs and friction rise, behavior breaks. Keep it cheap and simple.

FAQ: US vs global ETFs

What is the difference between a US-only ETF and a global ETF? +

A US-only ETF holds companies listed in the US market. A global ETF holds companies from many countries, usually weighted by market size. US-only concentrates in one market; global spreads exposure across regions (and typically still includes a large US slice).

Has the US market historically outperformed global markets? +

There have been long periods where US stocks outperformed and other periods where non-US markets led. Recent history favored the US, but there is no guarantee that continues. US-only is a bet; global reduces reliance on one region.

Is home bias a problem if I invest from outside the US? +

A modest tilt is common, but extreme concentration in one country increases exposure to that country’s economic, political, and currency risks. Global funds reduce single-country concentration.

Can I mix US and global ETFs in the same portfolio? +

Yes. Many investors use a global ETF as a base and add a separate US ETF to tilt more toward the US. Just remember global ETFs often already have a large US weight, so check the combined exposure.

Which is better long term: US-only or global? +

No one knows in advance. US-only may win if US leadership persists; global may win if leadership rotates. The bigger edge is choosing an allocation you can hold through full cycles instead of switching based on recent performance.

Ready to implement a simple ETF plan? Pick one solid broker, then automate contributions and stop tinkering.

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Educational content only. Not personalized investment or tax advice.

Investments can lose value and past performance does not guarantee future results. You are responsible for your own decisions and for confirming tax and legal rules in your country.