Story perspectives

Investors Urged to Diversify Beyond U.S. Large-Caps

1/24/2026

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Summary

Story summary

Investors should diversify beyond U.S. large-cap stocks, which have historically underperformed.
Pimco and State Street asset managers discuss strategies to generate alpha through bonds and commodities.
They note divergent monetary policies across countries create relative-value opportunities.
U.S. stock strength suggests reducing exposure from 80% to 70% or 75% to improve diversification.
Small-cap stocks have recently outperformed large-caps, with the Russell 2000 Index posting significant gains.

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Story summary

Investors should diversify beyond U.S. large-cap stocks, which have historically underperformed.
Pimco and State Street asset managers discuss strategies to generate alpha through bonds and commodities.
They note divergent monetary policies across countries create relative-value opportunities.
U.S. stock strength suggests reducing exposure from 80% to 70% or 75% to improve diversification.
Small-cap stocks have recently outperformed large-caps, with the Russell 2000 Index posting significant gains.