US vs International Stocks: How Much Home Bias Is Too Much?

The US is about 64% of the world's stock market (64.21% of the MSCI ACWI index on 30 September 2026), so a world-weight portfolio is about 64% US and 36% international. Above 64% is home bias toward America; 100% US is a 36-point overweight on one country. From 2010 to 2024 all-US ended with about three times the money of all-international, and in 2025 international stocks beat the S&P 500 by more than 13 points.

If you live outside the US, the same question points the other way. A Canadian, a German or a Czech who buys mostly home-market shares is overweighting a market that is a few percent of the world. Vanguard Canada's 2024 study found Canadians keep about 50% of their stocks at home, in a market worth 2.6% of the global total. Measuring home bias takes two numbers: your country's share of world market value, and your own home share. The free portfolio analysis tool reads the second one off your funds, with no sign-up.

Home bias in investing, defined

Home bias is holding more of your own country's stocks than that country's weight in the global market. Familiarity is the usual explanation: people buy companies whose products they use, priced in the currency they spend.

Some of the tilt can be justified. The same Vanguard paper names lower trading costs and, for Canadians, the tax treatment of domestic dividends as legitimate reasons, and it put the optimal home share between 25% and 60% depending on the region. It still recommended 30% Canada and 70% international for Canadian investors, because the Canadian market has historically been more volatile than the global one without paying a higher return for it.

For an American the arithmetic is gentler, since the home market is already most of the world. Going from 64% to 100% US is a smaller jump than a Canadian going from under 3% to 50%. Both VOO and VTI hold 0% international, so a portfolio built only from either fund carries the full 36-point overweight.

US vs international stocks: what each mix earned since 2010

The worked example below puts $10,000 into four mixes in January 2010 and rebalances once a year. Inputs are annual total returns for the S&P 500 and for MSCI EAFE, the developed-market index outside North America (measured through the EFA fund). The 2026 figures run to 16 October.

Over the fifteen years to 2024 the S&P 500 compounded at about 13.9% a year and EAFE at about 5.2%. International won only three of those years: 2012, 2017 and 2022. Someone at world weight ended 2024 with about two-thirds of what the all-US investor had.

Data: Slickcharts (S&P 500 total return) and ChartRow (MSCI EAFE via EFA); 2026 is year to 16 October.

The 2025 flip, and how much of it was currency

EAFE returned 31.5% in 2025 through the EFA fund, against 17.88% for the S&P 500. About 10.6 points of that came from the dollar falling: TSW's currency review measures the index itself at 31.2% in dollars and 20.6% in local currencies for the year. In local terms, international stocks still beat the US, by under 3 points.

The dollar can keep falling or turn around, and a US investor in international funds gets that move in both directions. The lead also stalled: through 16 October 2026 the S&P 500 is up 12.91% and EAFE 9.5%, so money moved abroad in January 2026 because of 2025's chart has trailed the US since.

Is 100% US stocks too much?

An all-US portfolio is concentrated in three ways:

• Country: 100% of your stocks in a market that is 64% of the world.
• Companies: the top ten names in the whole MSCI ACWI are 25.4% of the global index, and nine of them are American (NVIDIA alone is 5.11%). In an S&P 500 fund that concentration is higher still, as covered in why your index fund became a tech bet.
• Price: the S&P 500's Shiller CAPE stood at 39.5 on 16 October 2026, above 98.4% of months since 1881, against a long-run median of 16.6 (ChartRow). The only higher stretch was the dot-com peak of 44.2 in December 1999.

High starting valuations have historically gone with lower returns over the following decade. They have not been useful for predicting any single year.

How much international should you own?

A single world fund handles the first row automatically. VT, which tracks the FTSE Global All Cap index rather than MSCI ACWI, held 61.9% US across 10,048 stocks on 30 June 2026 at a 0.06% expense ratio; European investors get the same exposure from an accumulating all-world UCITS ETF. If the US grows to 70% of world value, the fund drifts to 70% with no trade from you. The trade-offs between those funds are in best world ETFs and VT vs VTI vs VOO.

For a European, a world ETF already means about 64% US exposure in dollars. Adding a separate Europe fund on top is a home tilt, and the dollar exposure is a currency question with its own answer, covered in hedged vs unhedged world ETFs.

Checking your real US vs international split

1. List every fund you hold and its value, including pension and workplace funds.
2. Find each fund's country breakdown on its factsheet. A fund called "total market" is often 100% one country; check the factsheet rather than the name.
3. Weight each fund's US share by its value and add them up. That sum is your US share.
4. Compare it with 64%, the US share of world market value. If you sit 10 or more points away, write down why.
5. If you want to change it, point new contributions at the underweight side instead of selling, so you trigger no tax bill. The rebalancing guide covers the mechanics.

Steps 2 and 3 are the slow part with more than two funds. The portfolio analysis tool does them from your holdings and shows the result by country, region and sector. Disclosure: I build MFFT; a factsheet and a spreadsheet give the same number, just more slowly.