PORTFOLIO COMPARISON / ONE VARIABLE

US vs Global Equity Allocation Backtest

Compare US-only and globally diversified equity sleeves inside the same multi-asset portfolio.

Diversification comparisonCommon home-bias questionUS versus international equity weightHistorical result available

HISTORICAL BACKTEST RESULT

60% VTI / 40% BND vs 42% VTI / 18% VXUS / 40% BND

60% VTI / 40% BND 42% VTI / 18% VXUS / 40% BND
2020-06-02 → 2026-07-31 · 1541 common sessions
60% VTI / 40% BND$15,9787.9% annualized · -22.8% max drawdown
42% VTI / 18% VXUS / 40% BND$15,1266.9% annualized · -23.7% max drawdown

Historical calculation from cached Marketstack EOD data. Annual rebalancing, $10,000 initial value, nominal USD before fees and taxes. The disclosed portfolio definitions—not an AI model—produce the result.

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WHAT TO COMPARE

Read the trade-off as a system.

  1. 01Relative return
  2. 02Drawdown
  3. 03Currency contribution
  4. 04Rolling-period consistency

WHEN TO LOOK

Locate where the difference appeared.

1980s international strength1990s US strength2000s reversalPost-2010 US leadership

A useful comparison shows whether an advantage was broad or created by one unusually favorable period. Review the portfolio backtest methodology to understand how the same rules are applied across a shared data window.

OBSERVED RESULT / REAL MARKET DATA

What the comparison actually produced.

The global-equity sleeve lagged the US-only version by 0.88 percentage points annualized in a decade dominated by US equities. Its maximum drawdown was 0.34 points deeper, showing that diversification can disappoint for a long interval without becoming logically invalid.

WINDOWAug 2016–Jul 2026
CAPITAL$10,000 initial investment
CALCULATIONThe bond sleeve remains 40% BND. The US-only portfolio holds 60% VTI; the global variant changes only the equity sleeve to 42% VTI and 18% VXUS; annual rebalancing.
Equity sleeveEnding valueAnnualized returnMaximum drawdown
US only$24,6429.44%−21.76%
70% US / 30% international$22,7238.56%−22.10%

STRATEGY CONTEXT

What this portfolio strategy means.

A short definition, the reason investors return to it, and the historical context behind the name. It is context for a backtest—not an investment recommendation.

What it is

This comparison changes the equity allocation from a US-focused total-market holding to a mix that includes developed and emerging international equities. The goal is to make the geographic choice visible: the portfolio rules, dates, and rebalancing stay fixed while the source of equity exposure changes. It is not a forecast about which region will lead next.

Why investors use it

A US-only equity allocation is easy to implement and familiar to many US investors. A global allocation is used to reduce dependence on one country’s market, sector mix, and currency. Comparing the two lets a reader see the lived trade-off: international diversification can lower reliance on US leadership, but it can also look disappointing during long stretches when US large-cap stocks dominate.

Historical context

International investing moved from a specialist activity toward a standard allocation option as global index funds and ETFs spread. Modern portfolio theory gave diversification a formal language, but the practical question remains simple: how much home-country concentration is intentional? Different global benchmarks, currency treatment, and emerging-market weights create different strategies, so the proxy must remain explicit.