The hidden risk in global investing

By Darius McDermott on 3 March 2026 in Global

Earlier this week, we explored six different types of risk that investors should think about when building a portfolio. Much of that discussion centred on personal risk: what risk actually means to you, how it feels when markets move, and how that emotional response shapes your attitude to investing over the long term.

But for investors who’ve been investing for longer, or those who already have a core portfolio in place and a working understanding of things like market risk or style risk, there’s another form of risk that’s often overlooked: concentration risk.

What is concentration risk?

Concentration risk isn’t always obvious. It can show up across asset classes, sectors, investment styles, or, most commonly, geographies. In this article, we’re focusing on the geographic side of the equation, and in particular, concentration in the US.

Is your portfolio too concentrated on the US?

Many investors sensibly use global equity funds as a core building block in their portfolios. On the surface, this feels like diversification done right. After all, “global” suggests broad exposure across countries, regions, and economies. But when you look under the bonnet, the picture can be quite different.

The US currently makes up roughly three-quarters of the MSCI World index. That means a global tracker, or a global fund that hugs the index, will naturally have a very large allocation to US equities. Even more importantly, if you hold multiple global funds, it’s easy to assume you’re adding diversification, when in reality you may just be layering the same exposure on top of itself.

Although the dominance of US equities reflects its size and the global reach of its companies, it does mean that many portfolios are making a much bigger geographic bet than investors realise.

The aim of this article isn’t to make a macro call on whether the US will outperform or underperform. Instead, it’s about understanding where your portfolio’s risks actually sit, and whether you’re comfortable with them.

To illustrate that, we’ll look at five global equity funds that offer a different approach to geographic diversification.

Five global funds offering US diversification

Ranmore Global Equity

A good example of what true differentiation looks like. This is a global value fund that has proven its ability to perform across a range of market environments, and it looks very different from both the MSCI World Index and many of its peers. The portfolio spans the market-cap spectrum and, notably, the US is only the third-largest regional allocation. Asia accounts for 41% of the fund, Europe 24%, and the US just 23%*, offering investors exposure that genuinely broadens a global equity allocation.

Lazard Global Equity Franchise

This fund takes a different approach, focusing on companies with strong competitive positions in their respective industries. While the fund can invest anywhere in the world, its emphasis on durable business models naturally leads to a bias towards larger companies. Europe is the largest regional allocation at 39%, with the US close behind at 32%**. The fund also has a higher allocation to the UK than the index, with 17% invested in UK equities compared with 13%**.

JOHCM Global Opportunities

A highly active and unconstrained fund with the manager focused on capital preservation as well as long-term growth. The fund invests predominantly in large and mid-sized businesses that generate revenues globally, rather than relying on a single domestic market. While the US remains a significant allocation at 42%, Europe accounts for 33.5% and Japan around 10%, meaning the fund’s performance isn’t driven solely by US markets**. In fact, its largest holding is Deutsche Börse, a German financials company**.

Brown Advisory Global Leaders

This fund is a concentrated portfolio of around 30–40 stocks, investing in companies that deliver exceptional outcomes for their customers and can compound returns over many years. The US represents 44% of the portfolio, with Europe the next-largest allocation at 22%*. While the fund owns familiar US names, such as Microsoft and Alphabet, it also holds businesses like ASML, Roche and Taiwan Semiconductor*, reinforcing its global nature.

WS Montanaro Global Select

This fund brings diversification through its focus on high-quality small and mid-cap companies worldwide. This unconstrained quality growth strategy looks for profitable businesses with long growth runways and sustainable competitive advantages. US equities make up 44% of the portfolio, but meaningful allocations to the UK (14%), Germany (12%) and Japan (8%)* help spread geographic risk beyond the dominant US market.

Reminder: concentration comes in many forms

It’s worth stressing that geographic concentration is just one form of concentration risk. Style exposure, such as a heavy growth or value tilt, and sector concentration can be just as influential on long-term outcomes. Technology is an obvious example here, particularly given how dominant a small number of large companies have become within global indices. That’s why portfolio reviews shouldn’t stop at performance charts.

How FundCalibre can help

Understanding why your portfolio behaves the way it does means looking at what sits underneath: geographic splits, sector exposures and even company-level concentrations across your holdings.

This is also where doing your own research really matters.

On FundCalibre, every fund comes with a detailed factsheet, making it easier to see where a fund is invested and how it fits alongside the rest of your portfolio. Looking at these details across all your holdings, rather than in isolation, can quickly reveal whether you’re genuinely diversified or simply repeating the same exposures in different wrappers.

As this year’s tax-year end quickly approaches, this can be a useful exercise. Not because concentration is inherently bad, but because it should be an intentional choice, not a byproduct. Geographic diversification doesn’t require bold macro predictions. Sometimes, it’s simply about balance and making sure your portfolio is doing what you think it’s doing.

*Source: fund factsheet, January 2026

**Source: fund factsheet, December 2025