Why Your Slice of the US Market Might Be More Concentrated Than You Realise

May 2026

By Will Glyn

One of the most common conversations I have with expat clients runs something like this: "I've kept it simple — I just hold a global tracker. Properly diversified."

The intent is right. The reality, increasingly, is not what most people think it is.

Beneath the ticker on a typical world equity fund sits an unusually concentrated portfolio. Seven American technology companies — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — now account for more than a third of the S&P 500 by market value, and roughly a fifth of the FTSE All-World, the most widely tracked global benchmark. If you hold a broad market fund in 2026, you hold a much heavier slug of US technology than the label suggests.

That fact alone is worth knowing. It becomes more important against the backdrop of the next few months, with three of the largest private companies in history — SpaceX, Anthropic and OpenAI — touted as potential blockbuster IPOs, each at a price tag of at least $1 trillion. Whether they happen, when they happen, and what investors are willing to pay for them will tell us a great deal about where US equities go next.

The Magnificent Seven is a maths problem before it's a market problem

Each of the Magnificent Seven is among the ten most valuable listed companies on earth. Each carries a market capitalisation of at least $1.5 trillion. Between them they represent more than a third of the S&P 500 — and because the S&P 500 is itself the dominant slice of any global equity index, a "global" portfolio today is disproportionately a bet on these same seven names.

This is not a "tech is bad" point. It's a portfolio composition point. If your understanding of "diversified" is "spread across hundreds of companies in dozens of countries", that picture no longer matches reality. The maths has shifted.

The IPO test — the next stress moment for sentiment

Markets are good at climbing walls of worry. They are less good at processing supply.

When a sector becomes the dominant driver of returns, the IPO calendar tends to become a mirror of sentiment. The more frenzied the demand, the bigger and pricier the listings, and the more inevitable the eventual indigestion.

Before the latest escalation in the Middle East, 2026 was being lined up as the biggest IPO year in a decade, with SpaceX, Anthropic and OpenAI mooted as the three names everyone wanted to own. Each could come to market with a valuation comparable to the entire UK stock market. That puts them in the same ballpark as Apple at its peak — but without the same length of public earnings track record.

Three things to watch:

• Whether the deals happen at all — a delay or a pulled listing tells us appetite has cooled, even before any official market correction.
• What price they come at — a heavily downsized valuation is a quiet but meaningful signal.
• What follows them — a wave of imitator listings is historically the more dangerous flag, not the headliners themselves.

History doesn't repeat — but it rhymes loudly

Concentration like today's has happened before, and it has never lasted forever. The "'onics and 'tronics" of the late 1960s. The Nifty Fifty of the early 1970s. The technology, media and telecoms bubble of the late 1990s. Each delivered very strong returns on the way up and considerable pain on the way down. None marked the end of investing in those sectors — only the end of paying any price to do so.

We are not at that point now. The earnings the Magnificent Seven are delivering are real. AI capital expenditure guidance from this past week's earnings round was, by any historical standard, extraordinary. But it's worth noticing where the stretch is forming, because four out of the last four concentration cycles share an awkward truth: the largest names at the top of one cycle are rarely the largest names at the next peak.

Where equal-weighting comes in

For an expat who wants to keep exposure to the US market — and most should — there is a quietly useful alternative: an equal-weighted version of the S&P 500.

Instead of letting the largest names dominate by virtue of their size, an equal-weighted index gives each of the 500 companies the same allocation, rebalanced regularly. The exposure to the US economic engine stays. The exposure to a handful of mega-cap names is dialled back.

The long-run record is interesting. Over the past 35 years or so, the equal-weighted S&P 500 has outperformed the standard market-cap-weighted version by a small but compounding margin — roughly 0.5 percentage points a year on capital returns, and 0.4 percentage points a year on total returns. That sounds modest. Compounded over more than three decades it adds up to several hundred percentage points of cumulative outperformance.

The path is not smooth. The equal-weighted version lagged badly through the late-1990s tech boom, then made up significant ground during and after the bust. The same pattern repeated after the 2008–09 financial crisis. Today, with the headline S&P 500 once again on a multi-year run driven by a handful of names, it is at least worth asking the question.

Important caveat: equal-weighting is not "better" or "safer" by default. In a continued AI-driven bull run it will likely lag. The case for it is balance — a way to keep US exposure without amplifying concentration.

What this means if you're an expat investor

A few practical points:

• Most "world" or "global" funds are around 60–65% US — meaning your global tracker is largely a US tracker, and increasingly a US technology tracker.
• Currency stacks on top of concentration — a heavy US technology tilt is also a heavy dollar tilt, at a time when the dollar's path is far from settled. The dollar index closed below 98 last Friday, its lowest level since late February.
• The fix is not necessarily more US exposure — it might be different US exposure. Equal-weighted S&P 500, value tilts, mid-cap funds, or genuinely international diversification all do different jobs in a portfolio.
• "Doing nothing" can quietly become the most concentrated decision — when seven stocks drive the headlines, inertia compounds the imbalance.

This is exactly the conversation worth having before the next bout of volatility, not after it.

How We Can Help

At Proctor Wealth Associates we build investment strategies for expats living anywhere in the world. We pay attention to what's actually inside your portfolio — not just the labels on the funds — and to how that interacts with your currency, your country of residence and your long-term goals.

We can help you with:

• Reviewing your current US and global equity exposure and identifying genuine concentration risk.
• Considering equal-weighted, value-tilted or globally diversified alternatives where they fit your plan.
• Aligning the currency you invest in with the currency you'll eventually spend.
• Building a long-term portfolio that doesn't depend on correctly calling the next market top.

If you'd like to see what's really inside your portfolio — and stress-test it against the concentration risk in today's market — book a call with me.

Will is an Independent Financial Adviser with over a decade of experience helping expats make the most of their international status.