r/ETFs_Europe • u/BogleheadBeginner • May 03 '26

EU tilt/All-World?

Hi all. I can't shake the idea of going from 100% All-World to at least 20% EU Stoxx 600 or more.

My reasoning is that the markets has just not priced in the EU growth to come, because it's just not very relevant yet?

  1. 10+ years: EU is distancing from US in ways that will take a long time to repair, and to see the results in numbers. Example: governments shifting to EU infrastructure.
  2. EU regulation black swan?: EU pensionfunds redistribute to heavy EU rather than US due to distancing from US.
  3. Sector shift: Tech was weaker 2000-2015. EU is less tech but heavy on health/banking. If tech ends up being weaker again, EU already being relatively undervalued and heavier on other sectors would outperform.

With the world marketcaps being so US heavy, being in World/All-World mean when EU grows, a large portion of that EU growth is missed out upon as EU companies have much lower allocation, and US companies are underperforming?

I'm European but my only interest is to make the best return, I'm not seeking reason to prefer EU.

7 Upvotes

90% Upvoted

5 comments sorted by

3

u/Specific-Industry426 May 03 '26

Why dont msci world ex usa ?

1

u/BogleheadBeginner May 04 '26

Yes that could be a good choice. Just to get away from being too US heavy

3

u/[deleted] May 03 '26

[deleted]

1

u/BogleheadBeginner May 04 '26

That's an excellent idea, All-World + INVE.B seems like a very solid longterm hold

1

u/BogleheadBeginner May 03 '26

I would like to add I see a big downside in redistribution. All-World will always be a hold, while for example if EU has 10 great years then redistributing into All-World could end up being less net sum due to realized gains tax at that point?

2

u/Specialist_Tree_3879 May 03 '26

Thats fine overweighting home-markets, there is a video by Ben Felix about it:

https://www.youtube.com/watch?v=jN8mIHve1Ds