Among investors with net worth exceeding $10 million, one of the most actively debated questions in 2025 is how much exposure to maintain in US equities — particularly with heavy concentration in the technology sector. As geopolitical dynamics shift and the dollar's global dominance faces new pressures, high-net-worth individuals are reassessing portfolios that were built during a decade of US outperformance. This article examines the allocation patterns, frameworks, and considerations that are actively shaping how this cohort is approaching the question.
Where High-Net-Worth Investors Actually Stand
Reported allocations among investors in the $10M–$35M net worth range show a wide spectrum of US equity exposure, typically falling between 50% and 85% of total investable assets. A commonly observed pattern clusters around 60–70% US equity, 15–25% international equity, and 10–20% in bonds, cash, or alternatives.
Some investors in this cohort maintain real estate, private equity, or crypto alongside public markets. The combination of these illiquid assets often means that stated "equity" percentages underrepresent total risk exposure, since private business equity and real estate frequently carry significant correlation to US economic conditions.
| Reported NW Range | Typical US Equity % | International Equity % | Other Assets |
|---|---|---|---|
| $10M–$15M | 60–80% | 10–25% | Bonds, cash, RE |
| $15M–$25M | 55–75% | 15–30% | PE, crypto, gold |
| $25M+ | 50–70% | 20–35% | RE, private funds |
The US vs. International Equity Debate
The most significant shift observed among this investor group in 2024–2025 is a growing willingness to increase international equity exposure — a departure from the US-dominant posture that characterized portfolios throughout the 2010s. The catalyst has been a combination of dollar weakness, strong performance from ex-US indices, and a broader reassessment of geopolitical concentration risk.
International developed-market equities delivered notably stronger returns than the S&P 500 in the early part of 2025, reversing a multi-year trend. This has prompted some investors who previously dismissed international diversification as a drag to reconsider the structural case for geographic allocation.
One framework that has gained renewed attention is market-cap weighting — aligning portfolio geography to the actual distribution of global economic output. By this logic, a purely US-weighted portfolio represents an active bet on US outperformance rather than a neutral baseline. A truly passive approach would hold roughly 60–65% US and 35–40% international, consistent with funds like VT (Vanguard Total World Stock ETF).
A key argument for international diversification, often overlooked, is its function as a USD hedge. Ex-US equity funds denominated in USD are not currency-hedged, meaning they gain relative value when the dollar weakens — providing a structural offset during periods of dollar depreciation.
The Role of Bonds: Declining Conviction
Among high-net-worth investors with long time horizons, there is a notable and growing skepticism toward bonds as a portfolio component. The 2022 period — in which both equities and bonds declined simultaneously — significantly damaged the traditional rationale for bonds as a ballast against equity volatility.
Academic research has contributed to this reassessment. Work such as the Cederburg et al. paper "Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice" has been widely cited in this context. The research, using bootstrap simulations of historical global data, suggests that for investors employing flexible withdrawal strategies, a 100% equity allocation may be optimal over the long run — with bonds posing a greater risk to real purchasing power than equity volatility does.
However, this view is not without meaningful critique. Simulation-based models depend heavily on assumptions about synthetic data and the preservation of historical return momentum. A distinct counterargument holds that some bond allocation reduces the probability of portfolio failure under fixed withdrawal strategies — particularly for investors drawing down at 4% of initial portfolio value — even if it introduces long-term inflation drag.
The core tension is this: bonds reduce short-term volatility and provide sequencing protection, but introduce real purchasing-power erosion over inflationary decades. Investors near or in retirement may weigh these tradeoffs differently than those still in accumulation.
| Withdrawal Method | Suggested Bond Allocation (Cederburg) |
|---|---|
| Fixed 4% of initial portfolio | ~25% at retirement, declining to 0% within 5 years |
| Flexible 4% of current portfolio | 0% (100% equity) |
Tech Concentration: Upside vs. Structural Risk
Among investors with meaningful tech sector exposure — particularly those who work in or adjacent to the industry — the calculation around concentration is unusually complex. Professional knowledge of the sector can create a reasoned conviction about continued upside, but it can also create a blind spot toward correlated risk: if an economic shock originates in tech, both income and portfolio value may decline simultaneously.
This is the same dynamic faced by entrepreneurs who held concentrated equity in their own companies. The diversification argument applies not just to geography, but to the correlation between human capital and financial capital. Those whose income derives from the tech sector already have implicit long exposure to the industry; adding concentrated financial exposure compounds rather than diversifies that risk.
At the same time, disciplined diversification out of a high-conviction position involves real costs — capital gains realization, loss of asymmetric upside, and the psychological friction of selling a position that has historically performed well. These are genuine tradeoffs, not simply behavioral errors to be corrected.
Frameworks for Rebalancing Without Timing the Market
A recurring theme among experienced investors in this NW range is the importance of constructing an allocation one can sustain through both strong and weak market environments — avoiding the trap of making tactical shifts that get reversed when conditions change again.
Several practical approaches are commonly discussed:
- Directing new contributions and reinvested dividends toward underweight asset classes rather than selling existing positions, minimizing taxable events.
- Gradual rebalancing over multiple tax years to manage capital gains exposure, particularly for investors with large unrealized gains in concentrated positions.
- Market-cap weighting as a neutral anchor, using global index funds as a baseline and making deliberate, bounded deviations rather than unconstrained tactical bets.
- Separating retirement portfolio logic from speculative portfolio logic, maintaining distinct rules for each rather than applying a single framework across both.
The distinction between hedging and diversification is also worth clarifying. True hedging involves instruments that move inversely to existing positions — options, futures, or inverse funds — and carries associated costs and complexity. For most long-term investors, what is actually being pursued is diversification: reducing concentration through broader exposure, not neutralizing specific positions through derivative instruments.
Currency Risk and Jurisdictional Diversification
A less commonly discussed dimension of international equity exposure is jurisdictional diversification — holding assets through institutions or structures outside the US tax and regulatory environment. For investors concerned about long-term changes in US policy, currency controls, or geopolitical disruption, this represents a distinct form of risk management beyond simply buying ex-US equities through a domestic brokerage.
US tax law creates significant friction for this approach. The Passive Foreign Investment Company (PFIC) rules make most foreign-domiciled ETFs highly punitive for American taxpayers, effectively limiting international exposure to US-listed vehicles like VXUS, VEA, VWO, or ADRs — all of which are held domestically even if the underlying assets are foreign.
Some investors have navigated this by working with Swiss or other non-US private banking institutions that specialize in compliant structures for American clients — maintaining direct foreign-domiciled holdings without triggering PFIC treatment. This approach requires specialized tax counsel and adds reporting obligations (FBAR, Form 8938), but provides a level of jurisdictional separation not available through standard domestic brokerage accounts.
Key Considerations Before Rebalancing
Before making allocation changes, a set of structural questions is worth working through:
- What is the actual withdrawal rate? At 3% or below, sequence-of-return risk is substantially mitigated, which changes the calculus around defensive positioning.
- What is the correlation between income and portfolio? Investors whose earnings are tied to the same sector or economy as their portfolio face amplified downside in adverse scenarios.
- What are the tax consequences of rebalancing? For investors with large unrealized gains, the cost of repositioning can be substantial and should be modeled explicitly.
- What is the time horizon? The optimal allocation for a 45-year-old still accumulating looks quite different from one appropriate for a 60-year-old planning to draw down within five years.
- Can the chosen allocation be maintained through a prolonged downturn? An allocation that triggers forced selling or emotional decision-making during a bear market may produce worse outcomes than a theoretically suboptimal allocation that is held consistently.
No allocation framework eliminates uncertainty. The relevant question is not which allocation is theoretically optimal, but which allocation can be implemented consistently, at low cost, and without requiring accurate predictions about the future.
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