Overrepresented

Over the past 20 years, the global weight of the US economy has declined from 19% to 15% of world GDP. Yet, during the same period, the weight of US equities in global indices has surged from 51% to 67%.

European Union’s share of world GDP also fell, from 21% to 14%, now slightly below the US. But its stock market representation has shrunk even more dramatically — from 24% to just 12% of global indices.

At ECP we believe that, while we acknowledge the strength of US exceptionalism, the current disproportionate dominance of US equities is increasingly difficult to reconcile with the underlying economic footprint of the country.