MFS explores why investors should think beyond domestic markets and consider global equities as a core portfolio component, arguing that opportunity sets and diversification benefits are structurally larger outside a single country. The paper challenges home bias, noting that over 50% of global market cap lies outside the US and that leadership rotates more than investors expect.
Going Global In Equities
MFS
Ravi B. Venkataraman, Indhu Raghavan
Research
10 Pages
Key Takeaways
Home Bias Risk: US investors allocate roughly 70% domestically despite the US representing closer to 55% of global market cap, increasing concentration risk.
Leadership Rotates Globally: No single region consistently outperforms, with international equities leading US markets in 7 of the past 20 years.
Diversification Benefits Persist: Blending global equities historically reduced volatility, with multi-region portfolios showing lower drawdowns during major selloffs like 2008.
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