U.S. Stocks Are 63.55% of a Global Index—Home Bias Still Persists

America’s share of the global equity market has grown, but that has not made home bias disappear. As of July 31, 2026, U.S. stocks represented 63.55% of the MSCI ACWI; the latest portfolio study examined here found a 75% U.S. allocation in the median sampled adviser portfolio.

The practical distinction remains important: owning mostly American stocks can partly reflect the market’s size, while allocating still more than its global weight is an active or accidental domestic tilt. For investors outside the United States, a large American allocation may simply follow the global market rather than express a special preference for America.

America’s size changes the home-bias calculation

Home bias is not the same as a high domestic allocation. It is the degree to which a portfolio holds more of its home market than an appropriate neutral benchmark would. For an investor using a capitalization-weighted global equity portfolio as that benchmark, the relevant comparison moves whenever markets and currencies change.

The MSCI ACWI factsheet for July 31, 2026 assigns 63.55% to the United States, covers 2,460 large- and mid-cap companies across 47 developed and emerging markets, and says the index captures about 85% of the investable global equity opportunity set. Information technology accounts for 30.28% of the index, while its ten largest constituents collectively represent 24.21%.

Those figures produce two different concentration questions. An American investor can match the global market and still have nearly two-thirds of an equity portfolio in U.S. companies. The same investor can also be globally diversified by country yet remain heavily exposed to technology and a small group of very large companies.

This also explains why investors in Canada, Europe, Japan or Australia can own substantial amounts of American stock without displaying an American bias. A hypothetical non-U.S. portfolio with 50% in American equities would actually be underweight the United States relative to the July 2026 MSCI ACWI weight. Its home bias must instead be judged by comparing its allocation to its own domestic market with that market’s global weight.

What the portfolio evidence actually shows

The strongest recent evidence examined here comes from adviser-managed accounts, not every American household. Vanguard’s Q2 2025 portfolio analysis found that the median allocation among 1,747 client portfolios was 75% U.S. stocks, versus a 63% global benchmark weight; more than three-quarters of the portfolios exhibited some home bias. The client data were measured as of June 30, 2024, while the cited benchmark comparison was dated March 31, 2025.

The result is evidence of a persistent tilt within that sample, but it should not be presented as a current census of all U.S. investors. Retirement plans, self-directed brokerage accounts, pensions and adviser portfolios can have different allocations. The study’s cleanest conclusion is narrower: even professional portfolio construction frequently left clients above the global market’s already-large U.S. weight.

The benchmark has since moved from the 63% used in Vanguard’s comparison to 63.55% in MSCI’s July 2026 factsheet. That small increase does not erase the study’s finding, although comparing today’s index directly with a portfolio snapshot from 2024 would mix measurement dates. A fresh portfolio statement and a same-date benchmark are required to calculate an investor’s present tilt accurately.

Why domestic holdings remain comfortable

Domestic securities reduce several forms of friction. Investors are more likely to recognize local companies, receive information in a familiar language, understand the regulatory system and think about results in the currency used for future spending. Employer stock, domestic retirement-plan menus and years of market appreciation can add to the allocation without a deliberate decision to prefer the home country.

International diversification introduces genuine trade-offs rather than a free reduction in risk. The SEC’s international-investing guidance identifies currency movements, information differences, higher costs, varying liquidity, political and economic events, market-access limits and potentially weaker legal remedies among the relevant risks. It also identifies diversification and access to growth outside the United States as principal reasons to invest internationally.

These frictions help explain home bias, but they do not prove that every domestic overweight is optimal. Familiarity can make a risk feel smaller without changing the underlying exposure. A portfolio concentrated in one country remains dependent on that country’s valuations, regulation, sector composition and market-specific shocks, even when its largest companies earn revenue around the world.

Why foreign enthusiasm for U.S. stocks is not a contradiction

The global market portfolio must be owned by someone. Because U.S. companies account for almost two-thirds of the MSCI ACWI, a capitalization-weighted investor in another country will naturally direct most foreign-equity money toward the United States. Large American allocations abroad and domestic overweights at home can therefore exist simultaneously.

The terms describe different comparisons. American home bias asks whether a U.S. investor exceeds America’s benchmark weight. Japanese, Canadian or British home bias asks whether investors in those countries overweight their respective local markets. Their allocation to the United States is a separate question and could be above, equal to or below the global benchmark.

This distinction also prevents a common analytical error: treating every dollar invested across a border as evidence of broad geographic diversification. A non-U.S. investor may hold foreign assets but concentrate them overwhelmingly in America. Conversely, an American investor may own a multinational U.S. index whose companies operate globally, yet still lack direct exposure to the different sector mixes, currencies and valuations of overseas exchanges.

How to measure the tilt without choosing an arbitrary foreign quota

A useful review begins with measurement, not a universal target. The appropriate allocation depends on the investor’s goals, liabilities, tax position, risk tolerance and chosen benchmark; a global index is a reference point, not a personalized prescription.

1. Measure the equity portfolio on a look-through basis. Include country weights inside mutual funds, exchange-traded funds and target-date funds rather than judging diversification from fund names.
2. Separate listing country from economic exposure. Overseas revenue at a U.S. company may diversify its business, but the security still carries the valuation, sector and regulatory characteristics of the U.S. market.
3. Choose a benchmark deliberately. A global capitalization-weighted index offers a neutral market baseline. A strategic allocation may depart from it, but the reason for that departure should be explicit.
4. Calculate the domestic gap. Subtract the home country’s benchmark weight from the portfolio’s home-country weight. A positive result is the portfolio’s home overweight in percentage points; it is not automatically a forecast of loss or underperformance.
5. Check overlapping concentrations. Country, sector and company exposure can compound. Reducing a U.S. allocation while buying another technology-heavy fund may change the country label without solving the main concentration.
6. Rebalance to a written range. A range allows normal market movement while creating a rule for correcting large drifts, rather than making country bets in response to headlines or recent returns.

Bonds deserve a separate decision. Currency matching, interest-rate exposure and the need to fund near-term spending can make a domestic fixed-income tilt more purposeful than the same tilt in equities. Combining stocks and bonds into one home-bias percentage can therefore conceal the different job each asset class performs.

The central question is not whether America deserves a large portfolio weight: by global market capitalization, it already has one. The question is whether an investor’s additional domestic exposure is intentional, compensated by other diversification and consistent with the risks that portfolio is supposed to bear.

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