Should investors be over or underweight the US equity market? This is surely one of the most asked asset allocation questions of the past five to ten years.
Over ten years to the end of June in sterling terms, the US equity market outperformed the UK, Europe and Japan markets by 297%, 235% and 226%, respectively. There are good reasons for this outperformance. Most recently of course, the technology giants that dominate the US equity index were the chief beneficiaries from lockdowns as we all became dependent on, and some maybe addicted to, their services. However, it really has been a trend since the Global Financial Crisis that US companies have delivered sustained stronger earnings growth and better profitability than their developed market ...
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