Global equity investing isn't what it used to be

Key takeaways

• Broad global equity benchmarks have become increasingly concentrated in a relatively small number of companies and industries – such as US mega-cap technology.

• Different global equity exposures can address different portfolio objectives, from maximum market coverage to reduced dependence on US market leadership.

• Understanding the characteristics of all-cap, small-cap and ex-US global exposures can help investors build more deliberate global equity allocations. 

Equity investing remains essential – but global beta has changed

Global equities continue to provide one of the most effective ways to access long-term economic growth in portfolios. By spreading exposure across regions, sectors and business models, global allocations can reduce dependence on any single market while providing participation in the growth of the world economy.

However, the structure of global equity markets has shifted materially in recent years. A relatively small number of US-based AI hyperscalers have taken on a larger share of broad, market-cap-weighted benchmarks – and their contribution to market returns has been unusually large in recent years. As a result, many investors may have more concentrated exposures than they realise, both at the stock and industry level.

For example, just 144 stocks account for 50% of the weight of the FTSE Global All-Cap Index – despite the index containing more than 10,000 constituents¹. Concentration is no longer simply a US equity phenomenon; it has become embedded within many broad global benchmarks, where market-cap weighting has tilted exposures to the US.

Stock concentration differences across global equity exposures

Cumulative weight by stock

Source: FTSE Russell, Vanguard, based on 26 June 2026 reconstitution files for Russell indices. Constituents on the X-axis: Individual stocks, ranked from largest to smallest by weight in the FTSE Global All Cap Index. Moving from left to right shows how quickly an index's total weight accumulates as progressively smaller companies are added.

Three different ways to access global equities

To address the challenge of concentration, investors have a few options for aligning exposures to their portfolio objectives.

Go broad: Global all caps

Global all-cap exposure extends traditional global equity beta by adding small-cap companies across developed and emerging markets. The result is a broader representation of the investable equity universe, with exposure across the full market-cap spectrum – more than 10,000 companies in the FTSE Global All-Cap Index².

Go small: Global small caps

Global small caps provide access to thousands of companies beyond traditional large-cap benchmarks. With a more balanced concentration profile and greater exposure to industrial and cyclical sectors, they can offer differentiated sources of return and diversification.

Go outside the US: Global ex-US

Global ex-US exposure separates the US allocation decision from the rest of the world. By removing the US, investors gain access to developed and emerging markets outside the US while substantially reducing dependence on US mega-cap technology leadership.

Choosing the right exposure

The question is not which global equity exposure is best. Rather, it is which exposure best aligns with the role global equities are intended to play within a portfolio.

Download Global equities unpacked to explore the investment case, index selection criteria and implementation considerations behind each approach.

¹ Source: FTSE Russell, as at 26 June 2026.

² Source: FTSE Russell, as at 31 August 2026. Note: the Vanguard FTSE Global All-Cap UCITS ETF uses a sampling approach to tracking the parent index and would typically hold fewer companies than the parent index, approximately 7,000. Rather than buying every security in an index, a sampling approach selects a representative group of holdings designed to mirror the index's risk and return profile, helping to reduce trading costs and improve efficiency while maintaining close benchmark tracking.

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