Global diversification can help investors access developed markets beyond the US — but choosing the right ETF to deliver that exposure can also affect coverage, costs and after-tax outcomes.
The US remains a major part of many long-term portfolios. But for investors looking to diversify globally, investing beyond US equities is only the first decision. The ETF used to access international markets matters too.
Here’s how Syfe’s move to the Xtrackers MSCI World ex USA UCITS ETF (EXUS) illustrates why both exposure and implementation matter.
Table of contents
- Why investors naturally gravitate towards the US
- What investing beyond the US can add
- Choosing the market is only the first decision
- How Xtrackers EXUS provides developed-market exposure
- Why Syfe moved Core’s allocation to EXUS
- What this means for investors
Why investors naturally gravitate towards the US
For many investors, building a portfolio starts with the US.
It’s easy to understand why. Some of the world’s best-known companies — from technology giants to consumer brands and financial institutions — are listed in the US. US stocks receive extensive media coverage, while US-listed ETFs are widely available to DIY investors.
The US market has also delivered strong long-term performance, particularly over recent years. For investors who have watched US equities lead global markets, maintaining a significant allocation can make sense as part of a long-term investment strategy.
But there is a potential trade-off: a portfolio can become heavily concentrated in a single country without the investor necessarily intending it.
Even if you own several different US stocks or ETFs, you may still have significant exposure to the same economy, currency, market and business cycle.
Investing beyond the US can broaden a portfolio’s opportunity set and reduce its reliance on a single market, although international investing also carries its own risks.
What investing beyond the US can add
Diversifying internationally is not about predicting which country will perform best next. Instead, the idea is to expand the range of companies, sectors, and economies represented in your portfolio.
Developed markets outside the US include Japan, the UK, France, Germany, Switzerland, Australia and Canada. These markets are home to many large and established businesses that may not appear in major US indices. They can also have different sector compositions and economic drivers. For example, some international markets have greater exposure to financials, industrials, materials or consumer companies than the US market.
Owning these markets can therefore give an investor exposure to a different mix of businesses and economic cycles.
Although many US companies earn revenue globally, they remain US-listed businesses influenced by US valuations, market conditions and index dynamics. Investing directly in developed markets outside the US gives investors access to a different set of companies, markets and economic drivers.
While non-US markets might not necessarily outperform US equities, including them can reduce reliance on the performance of any one market while allowing investors to participate in growth across a broader group of developed economies. Once you have decided which markets you want to own, the next question is: how should you access them?
Choosing the market is only the first decision
There are two separate decisions when building a portfolio:
- Exposure: Which countries, markets and companies do you want to own?
- Implementation: Which investment vehicle or ETF should you use to access that exposure?
Two ETFs can serve a broadly similar role in a portfolio while differing in their geographic coverage, fund structure, costs and potential tax implications.
This distinction formed part of Syfe’s latest rebalancing for Core, our range of globally diversified managed portfolios. The review considered not only the exposures Core should hold, but also whether each ETF remained a suitable and efficient way to deliver them.
How Xtrackers EXUS provides developed-market exposure
As part of the latest Core rebalance, Syfe moved the developed-markets-ex-US allocation from EFA to Xtrackers MSCI World ex USA UCITS ETF, or EXUS.
EXUS is designed to provide broad exposure to large- and mid-cap companies across developed markets outside the US. In practical terms, this gives Core a way to access a wide range of international companies through a single ETF.
It tracks the MSCI World ex USA Index, providing exposure to more than 750 large- and mid-cap companies across 22 developed markets as of 31 July 2026. Together, these companies represented approximately 85% of the available market capitalisation across the markets covered by the index.
For investors, that breadth matters. Instead of relying on a small number of international companies or assembling several regional ETFs, EXUS provides access to hundreds of businesses across markets such as Japan, the UK, France, Switzerland, Australia and Canada through a single ETF. EXUS is also an Ireland-domiciled UCITS ETF.
UCITS — short for Undertakings for Collective Investment in Transferable Securities — is a widely used framework governing investment funds in Europe. For Core, EXUS’s UCITS structure provides a more tax-efficient way to obtain the intended developed-markets-ex-US exposure than through the previous US-listed ETF, helping to reduce withholding-tax drag on income.
The fund’s accumulating structure means income generated by the underlying investments is reinvested within the fund rather than being distributed as cash. This can simplify the process of keeping returns invested.
EXUS also includes Canada, modestly extending the developed-market coverage available through Core’s previous implementation.
Why Syfe moved Core’s allocation to EXUS
Core already had exposure to developed markets outside the US before the latest rebalance.
The change from EFA to EXUS therefore did not represent a major shift in Core’s geographic positioning. In Equity100, for example, the developed-markets-ex-US allocation remains 21.5%.
Instead, the primary reason for the switch was implementation efficiency. Syfe estimates that the switch to EXUS could improve the holding’s annual efficiency by approximately 0.64%. This estimate combines withholding-tax savings and differences in fund expense ratios, based on current dividend yields and applicable tax rates.
That does not mean every investor holding either ETF would experience exactly the same outcome. Actual results can vary depending on factors such as portfolio size, taxes, market movements and individual circumstances.
This is what ongoing portfolio oversight looks like in practice. Core’s long-term strategy remains consistent, while Syfe continues to review the underlying building blocks and adopt more effective ways to implement it.
Xtrackers provides the ETF capabilities and market access; Syfe assesses the strategic role of that exposure within the portfolio — including why it is needed, how large the allocation should be and how it complements Core’s US and emerging-market exposures.
What this means for investors
For an investor building a global portfolio, diversification is about more than simply adding another region to the list.
The first question is where should I invest?
The next is what is the most appropriate way to access that exposure?
Core’s move from EFA to EXUS is a practical example of the second decision. The underlying portfolio objective did not fundamentally change: Core continues to combine US equities with developed markets outside the US and emerging markets.
What changed was the vehicle used to deliver part of that exposure.
That distinction matters because an ETF’s structure, coverage and costs can influence the experience and outcome of owning an investment over the long term.
For investors, the takeaway is simple: building a globally diversified portfolio is only half the story. Choosing the right vehicle to implement that strategy can also affect how much you ultimately keep.
What goes into a Syfe Core portfolio
Syfe Core brings together carefully selected investment building blocks — including Xtrackers ETFs — within globally diversified portfolios built and managed by Syfe. From determining which markets to own to selecting suitable ETFs and reviewing them over time, each decision is made with a clear role in the wider portfolio.
Want to hear more directly from the fund provider? Join Syfe and Xtrackers for a live webinar on the Core rebalance on 10 September 2026.
