Moving away from US Equities

Sussex_by_the_sea

Just curious to what extent you have tilted away from US equities if like me you are concerned with high US valuations.

I have recently gone from 60% US to 28% US. I appreciate this will be seen as an extreme reaction by many. The remaining 72% is split between UK, rest of Europe, Japan, Asia Pacific excluding Japan and EM.

I have also reduced equities to 50% (from 70%) of my entire portfolio so now only 14% (from 42%) of my portfolio is in US equities.

Anyone else been this extreme?

masonic

I've dropped the US to 45% of my equities. I've also reduced equities from 90% to 60%. So not quite as extreme, but I do not rule out dropping overall equities to 50% if the bull market continues through 2026. There are a handful of regular posters who have dropped to 0% equities.

NithyaH

Only down to about 50% as a long term investor in my pension (with 25 or so years to go).  I’m now 75% HSBC FTSE All World and 25% Blackrock 50:50 Global Equity Index.  Overall, it gives a tilt to the UK of about 15% and a bit of overweight on some other regions.  The Blackrock fund is a bit of an odd beast, but it works for me.

Linton

I have made no active changes in direct response to Trump's actions or concerns about the Mag 7. But there are tweaks at the strategic level...

My Growth portfolio has been 40% (split 60/40 S&P/500 and Smaller Companies) in US for several years. In the past year this has dropped to around 37%  due mainly to the fall in the $.  The Mag 7 exposure is 7-8% of my total growth portfolio, so nothing much to worry about.

The only recent change has been to increase China to 11% and am thinking of going further, possibly 15% but have not yet decided what to decrease.

Also I have increased my income/growth portfolio ratio to about 50/50 to more than match inflation (my annuities are fixed rather than RPI linked)

The top level philosophy is to have an appropriate long term asset allocation strategy and totally ignore short term events.

Alistair31

For better or worse (currently the latter) I recently sold my 100% equities ISA holding to cash* (MMF). Partly because of my strong conviction that AI is a bubble that will pop, bringing down the broader market with it, in the near future. Also partly because I was just keen to lock in already impressive gains, having enough I suppose.
 OTOH, I can see Trump attempting to juice the markets at all costs for the rest of his term, and how much gain does one miss before having some regret? 

How to allocate April’ ISA allowance then, hmm…

*I have left SIPP and DC pension contributions 100% equities and don’t even look at that

poseidon1

Sussex_by_the_sea said:

Just curious to what extent you have tilted away from US equities if like me you are concerned with high US valuations.

I have recently gone from 60% US to 28% US. I appreciate this will be seen as an extreme reaction by many. The remaining 72% is split between UK, rest of Europe, Japan, Asia Pacific excluding Japan and EM.

I have also reduced equities to 50% (from 70%) of my entire portfolio so now only 14% (from 42%) of my portfolio is in US equities.

Anyone else been this extreme?

A definite yes.

Yesterday I sold a longstanding GIA holding of Monks Investment Trust and rotated into gold. It has a 60% exposure to primarily US tech stocks with 10% of its value in Nvidia and Taiwan Semiconductor Manfacturing Company (TSMC).

Both holdings are heavily susceptible to significant share price falls in the event China makes good its intention to take control of Taiwan in 2027. A recent announcement by Trump to the effect that China's attitude towards Taiwan is its own concern, as well as America's own Venezuelan 'adventure', seems to hasten that liklihood.

For me, putting aside the extraordinarily high  ( unsustainable ) valuations for many of the American tech stocks, together with Trump ( and his supporters) intentions to redraw the geopolitical map of the world,  a heavy exposure to America is inappropriate for me at this time. Unlike younger investors who have time to ride out this new disturbing and disruptive change to the old consensus ( and hope for a future return to sanity), I do not, so attempting  as best I can to avoid large portfolio set backs is the current goal.

aroominyork

This year we reduced equities from 60% to 40%, and US from 50% to 40%. However we also have about 35% in corporate bond funds. This was partly driven by valuations/geopolitics but also by moving from growth to wealth preservation as we retire. 

Alexland

I've dropped to around 50% equities because I wanted to lock in the circa 2% above inflation yield that long duration index linked gilts (ILGs) now provide.

I never had access to a DB pension so taking gains from equities and moving into ILGs gives me the hybrid multi asset portfolio that I always wanted but couldn't have when equities were almost the only thing worth investing in and bonds were overpriced during the zero interest rate period.

I now have enough in ILGs to cover all my current (non-mortgage) spending from age 55 onwards.

Within my remaining equities I am still using developed world trackers despite their high US/Mag7 exposure. I've toyed with the idea of messing around with the geographic weightings or using a high yield or value tilt but in the end decided to just leave the trackers to do their job. 

Albermarle

Sussex_by_the_sea said:

Just curious to what extent you have tilted away from US equities if like me you are concerned with high US valuations.

I have recently gone from 60% US to 28% US. I appreciate this will be seen as an extreme reaction by many. The remaining 72% is split between UK, rest of Europe, Japan, Asia Pacific excluding Japan and EM.

I have also reduced equities to 50% (from 70%) of my entire portfolio so now only 14% (from 42%) of my portfolio is in US equities.

Anyone else been this extreme?

I have about 60% equities in my ISA's and pensions.
However if I take into account cash holdings it is more like 50%.
If I take into account our DB pensions and two state pensions, then the effective equity % is probably more like 25%, if that. 

phlebas192

I haven't explicitly moved away from US equities but I deliberately never had much to begin with. Measured across all sub-portfolios it is currently about 14% US with less than 1% in the so-called Magnificent 7. The main sub-portfolio is an income producing basket of investment trusts and of those only FCIT has any Mag 7 holdings in its top 10 and only FCIT & NAIT (North American Income) are more than 50% US - the latter, not surprisingly, holds more traditional type businesses which pay reasonable dividends and hence largely shuns tech.

Overall, equities still make up 83% (down less than 1% since a year ago) of our savings/investments despite moving a fair chunk into gilts since the equities keep on going up! Equities are more like 65% if a cash value is assigned to my DB pension and our future SP entitelments.

mark_cycling00

Why not reduce exposure to tech but stay invested in consumer spending, healthcare etc? 
Tariffs, tax cuts and interest rate cuts might still make many sectors high growth in 26.