A Bigger Basket Isn't Always a More Diversified One

Broadening a US-heavy equity portfolio with targeted Asian country allocations can provide more distinct return drivers and has outperformed an all-US allocation in the periods examined.

• The analysis compares an all-US equity portfolio, broad emerging-market exposure and a portfolio combining US equities with selected Asian markets.
• A portfolio invested 70% in US equities and 10% each in South Korea, Taiwan and Japan produced nearly 25% annualized over three years and about 15% over five years.
• The all-US portfolio returned just over 19% annualized over three years and nearly 13% over five years, as of July 31, 2026.
• Taiwan provides semiconductor exposure, India is driven by domestic consumption, demographics and infrastructure, Brazil by commodities and agriculture, and South Korea by semiconductors, AI infrastructure, autos, shipbuilding and advanced manufacturing.
• Japan adds advanced manufacturing, industrial automation and corporate reform, while country correlations with the S&P 500 differ because economic and earnings drivers are not identical.

Takeaway: Investors should look beyond broad labels such as international or emerging markets and assess whether targeted country allocations complement existing US exposures, while recognizing that they will not outperform in every period and carry currency, political and emerging-market risks.