Freedom Isn’t Free UK Personal Finance
Investing
Too Much US Tech? How to Add a Value Tilt to Your Portfolio
Your 'global' tracker is 65-70% American and a third of that is six tech stocks. You don't own the world. You own a leveraged bet on Apple, Microsoft and Nvidia.
US weighting: standard tracker vs value tilt
MSCI World (cap-weighted)68%
Typical value/dividend ETF (VHYL)48%
60/40 blend of both60%
A value tilt typically cuts US exposure by 15-20 percentage points vs a cap-weighted tracker.
Key takeaways
1
A value tilt in a portfolio reduces exposure to high-priced US tech companies.
2
Value-tilted portfolios tend to have more financial, energy, and industrial companies.
3
A value tilt provides a counterweight to the concentration risk in global index funds.
4
Vanguard's FTSE All-World High Dividend Yield ETF (VHYL) offers an example of a value-tilted fund.