US stocks are omnipresent in many stock portfolios. But there are investors who are bothered by the heavy weighting given to Apple, Microsoft, and other large US companies. In this guide, moneyland.ch explains how to create a stock portfolio that excludes US stocks, and tells you whether or not it makes sense to do so.
US stocks are typically an elemental, heavily-weighted component of diversified, international portfolios. The United States holds a dominant position in global stock indexes, represented by tech giants like Alphabet (Google), Amazon, Apple, Meta, and Microsoft.
But there are investors who, for many different reasons, are uncomfortable with the heavy weighting of US stocks. One common reason is that a portfolio with a disproportionate US component bears a substantial concentration risk, and goes against the concept of not putting all your eggs in one basket. The risk of investing too heavily in a single country can be seen in the example of Japan. The country’s Nikkei 225 stock index collapsed in 1990, and only surpassed its pre-collapse position a long 34 years later in 2024.
In this guide, moneyland.ch lists four options for creating a stock portfolio that excludes the United States.
1. Global ETF that specifically exclude the US
The most straightforward option is to invest in an exchange-traded fund (ETF) that replicates a global index which specifically excludes US stocks. These are sub-indexes of major global stock indexes, and can normally be recognized by the term “ex USA” in their title.
You should be aware that most global indexes have a US component of over 60 percent. When US stocks are excluded, the void must be filled by upscaling the stock components of other countries that normally have a much lower weighting (see graphic).
2. ETFs for specific regions or continents
Another option is to invest in multiple ETFs, each of which tracks a different regional stock index. The advantage of this method is that you can choose your preferred weighting for each region yourself. You could, for example, invest in ETFs that specialized in African stocks, Asian stocks, or European stocks.
You have the advantage of being able to choose the regions you invest in. But the disadvantage is that you have to use several different ETFs to achieve a diversification similar to what you get with a single global index ETF. That requires more effort – including regular rebalancing – and can generate higher brokerage fees.
3. Country-specific ETFs
If you want to narrow down your investments to specific countries, you can do this by investing in ETFs that replicate national indexes. Doing this enables you to put together a stock portfolio based on your exact geographical preferences. But you should understand that investing in only a few countries will result in a poorly-diversified portfolio. You can solve this problem by spreading out your investments across many different country-specific ETFs.
From a Swiss perspective, the major Swiss stock indexes SMI and SPI are usually the first that come to mind. But there are numerous other indexes that track the Swiss stock market. You can find detailed information in the guide to Swiss stock market indexes.
More examples of national stock indexes:
4. Individual stocks
Another way to avoid investing in US stocks is to buy shares in individual companies – either as an alternative to using ETFs, or in combination with ETFs. However, it is important to be aware that investing in individual stocks exposes you to a high risk of loss. To create a diversified stock portfolio, it is advisable to invest in many different companies in a broad range of industry sectors.
Creating a diversified portfolio by buying shares in each stock individually can generate high costs in terms of the brokerage fees charged by your stockbroker. Using an ETF can result in lower total brokerage fees, because you only need to buy shares in one fund which, in turn, invests in a whole portfolio of different stocks. However, ETFs charge ongoing annual fees in the form of the total expense ratio or TER – an expense that you do not have when you buy and hold individual stocks.
Does excluding US stocks from my portfolio make financial sense?
There are many different reasons why someone may want to avoid investing in US stocks. But if you want to have a well-diversified stock portfolio, then excluding US stocks is not advisable. There is a simple reason why US stocks hold such prominent positions in global stock indexes: The US stock market makes up a huge portion of the world’s total market capitalization. Excluding all of these companies will likely do more harm than good to your portfolio’s diversification.
Another point to consider is that US securities have historically delivered reliable returns. In almost all years between 2015 and 2024, the main MSCI World index that includes the US performed better than its “ex USA” sub-index. The ex USA sub-index only performed better in 2017 and 2022 (refer to the graph). It is important to understand though, that there is no way to predict future developments. Even past performance is not a reliable indicator.
From an investment perspective, ironing out inequalities in your portfolio by reducing the exorbitant weightings of US stocks can make sense. Being too heavily invested in US stocks creates a concentration risk. It can be beneficial to change the balance of your portfolio and give heavier weighting to other countries. The options explained above can, for example, serve as a basis for supplementing a standard global stock ETF.
Disclaimer: This article is provided for informational purposes only, and should not be considered investment advice. The publishers do not accept any liability in connection with this publication.
More on this topic:
Compare Swiss stockbrokers now
How to invest in US stocks
How to invest money in Switzerland
How to invest in global stock indexes
ETFs: The pros and cons
Asset classes that you can invest in using ETFs
Brokers with low fees
eToro
Thousands of international and local stocks
Award-winning trading platform
The information provided in the advertisement constitutes a promotion for shares. Your capital is at risk.
Saxo Bank Special Offer
Special offer: Reimbursement of brokerage fees up to CHF 200 for 90 days
Licensed Swiss bank (FINMA)
Free expert research and trading signals
Deal of the Day 
International trading platform
eToro
Thousands of international and local stocks
Choice of digital asset managers
Choice of digital asset managers
eToro
Thousands of international and local stocks
Award-winning trading platform
The information provided in the advertisement constitutes a promotion for shares. Your capital is at risk.
Managed by Alpian
Unlimited access to wealth advisor
No additional bank account charges
Customized portfolios
finpension AG
Investing pension fund money
Asset accumulation with ETFs
Private equity from CHF 1
Findependent
Up to CHF 2000 free of charge
Low-cost ETF
Sustainable investments
True Wealth
Free test account
Flat fee: 0.5% - 0.25%
Inexpensive ETF
