PORTFOLIO COMPARISON / ONE VARIABLE

US vs Global Equity Allocation Backtest

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

THE QUESTION

When did global diversification help, and how dependent is the conclusion on the selected starting decade?

BASE PORTFOLIOUS-only equity sleeve
CONTROLLED CHANGEUS and international equity sleeve
ONLY CHANGED VARIABLEEquity geography

The base rules, data treatment, and calculation assumptions remain visible throughout the comparison. Review the supported markets and assets used to interpret this result.

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. For a direct test of this risk, compare the same rules across multiple portfolio start dates.

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%

TEST ANOTHER ALLOCATION OR RULE

Change one variable in AI Backtest.

Build your own portfolio comparison →