Interactive Tool
Owning the whole world
Diversification doesn't stop at your border. Own the market in proportion to each country's size and you make no bet on which nation wins next — yet almost everyone piles into home. Three views of investing globally: how much of the world you're skipping, how the lead rotates between regions on an untimeable clock, and when a foreign holding's currency is worth hedging.
Wherever you live, this tool is the same — no country is the whole market. US weight tracks the FTSE-anchored data behind our market-cap page; other weights are approximate world shares (VT / FTSE Global All Cap). Educational only, not advice.
Your portfolio vs. the whole world
The top bar is a market-cap-weighted global portfolio (what a single fund like VT holds). The bottom bar is yours at a 0% home tilt. The gap between the two green slices is your home bias.
- Your home allocation
- 62%
- Your international
- 38%
- Market weight for home
- 62%
- Overweight home by
- —
You're at global market weight — humble and hard to argue with, since it makes no bet on which country wins next. Some home tilt is normal and defensible — you spend in your home currency, and home stocks can carry lower costs and friendlier taxes. But a big tilt is a concentrated bet, and the catch is that leadership rotates: the US led the 2010s, international led the 2000s, Japan dominated then collapsed. Nobody reliably calls the next decade's winner, which is exactly why owning the whole world in proportion is the humble default. Educational only, not advice.
Three sides of the same idea
- Home bias. No country is the whole market — even the US is under two-thirds of global stock value, and most home markets are a few percent or less. Holding only your home market means skipping most of the world's companies for a concentrated bet on one nation's next few decades.
- US vs. the world. The gap between US and international returns doesn't flicker randomly; it trends for years, long enough to convince people the current leader will lead forever — right before it doesn't. The US led the 2010s; international and emerging led the 2000s. Chasing the recent winner is how investors buy high at the country level.
- Currency risk. Buy a foreign fund and you own its currency too. Those swings are enormous next to a calm bond and minor next to a volatile stock — which is why the evidence says hedge your foreign bonds but rarely your foreign stocks.
It all points one way: rather than guess the next winning country, own them all in proportion and rebalance as the map changes. This is the humility of indexing taken global. Educational only, not financial advice.
Sources & further reading
How this tool was made
Home-market weights come from published global market-capitalization shares, and the US-vs-world cycle uses regional equity returns from the Fama–French regional factor files. The currency-hedging tab is a model: it illustrates the mechanics on assumptions you set rather than replaying any particular currency's history.
Research
- French, K. R., & Poterba, J. M. (1991). “Investor Diversification and International Equity Markets.” American Economic Review 81(2): 222–226. The classic documentation of home bias: investors hold far more domestic equity than market weights imply.
- Perold, A. F., & Schulman, E. C. (1988). “The Free Lunch in Currency Hedging: Implications for Investment Policy and Performance Standards.” Financial Analysts Journal 44(3): 45–50. Argues currency hedging has ~zero long-run expected return, so it lowers risk for free.
- Dimson, E., Marsh, P., & Staunton, M. (2002). Triumph of the Optimists: 101 Years of Global Investment Returns. Princeton University Press.
Data
- FTSE Global All Cap Index — Factsheet, FTSE Russell (LSEG). Monthly factsheet for the whole-world index Vanguard's VT tracks (© LSEG; reproduction of the factsheet requires permission). Only its headline region weights and constituent count are cited here, with attribution; the site records the as-at month it used.
- Total World Stock ETF (VT) — Portfolio composition, The Vanguard Group. Region allocations used to cross-check and seed the market-cap breakdown.
- Kenneth R. French Data Library, Tuck School of Business, Dartmouth College. Data © Eugene F. Fama and Kenneth R. French. The library publishes no formal license; we ship derived series (daily market returns, regional monthly returns, factor summaries) with attribution, not the library's files.
Educational use only, not financial advice. Every figure traces back to the sources above or to the inputs you set — the full method and the source code are public.