The Concentration Problem: Why Your Global Index Fund May Be Less Diversified Than You Think
If you own a global index fund, whether it tracks the MSCI All Country World Index or a similar benchmark, you probably think of it as diversified. The word “global” is right there in the name. You own stocks from dozens of countries across every sector. Diversification achieved. Except that is not quite what is happening. As of early 2026, US equities account for approximately 65% of the MSCI ACWI. Within that US allocation, a handful of technology companies, sometimes called the Magnificent Seven, account for a disproportionate share. By some estimates, fewer than ten companies represent over 20% of the entire global index. When you buy a “global” fund, you are making a very large bet on a very small number of American technology stocks. ...