SIPP Asset Allocation looks skewed

dunstonh · 30 June 2024 at 12:48PM

As for the allocation, I would have expected it to reflect the spread of the world's markets, 70% USA and 4% UK for instance.

Market cap is one method but its not the only method. One of the potential negative of market cap is the way its shifted so heavily towards the US in recent years.

in March 2013, Market cap had the US at 46.68%. UK at 7.97%
In March 2024, Market cap has the US at 62.13% UK at 3.56%

You want to go even heavier into US at 70%. Is that because of recent past performance?

Those invested using market cap or heavy in US have had a very strong growth period but the decade before that, if you held the current market cap ratios, you would have significantly underperformed those with a UK and more global spread. You don't know what the next decade will be but historically, Global ex US vs US tend to alternate over cycles. This cycle has favoured market cap trackers. The cycle before it didn't.