International diversification

Why look beyond U.S. markets?

US equities remain a core holding for many portfolios, but investors may also consider opportunities outside the US. A more globally diversified approach can help balance risk and return across regions and market drivers.

Potential benefits of diversifying internationally

Reduce concentration risk

The US is a single economy, currency and policy regime. Diversifying internationally can help reduce the extent to which your equity risk is tied to one market and one government.

Access different growth engines

Other regions lead in areas where the US is less dominant (e.g. European industrials, Asian consumption and innovation). Global exposure may provide access to a broader opportunity set.

Benefit from diverse economic cycles

Economies and central banks do not move in lockstep. When the US slows, other regions may be at different points in their cycle, which can help smooth portfolio returns over time.

Diversify currency exposure

Holding only USD assets means your long‑term wealth is fully exposed to the path of a single currency. Adding high‑quality non‑USD assets can help reduce this dependency.

Avoid home‑bias blind spots

US investors often overweight what they know best. Looking beyond US markets can help your portfolio better reflect the global opportunity set rather than focusing solely on your home market.

The importance of Switzerland

In a world where instability is becoming the norm, Switzerland stands as a beacon for global private wealth management. Renowned for its political stability, robust economy – characterized by low volatility – and impeccably regulated financial markets, the country provides a secure environment for investors intent on safeguarding their wealth.

As a preeminent financial hub, Switzerland boasts a sophisticated banking system underpinned by a competitive economy and advantageous business conditions, making it an attractive destination for foreign investors. Here, a wealth of international investment expertise is readily accessible, ensuring our clients are well-supported in navigating complex markets.

The Swiss franc is a stable currency, strengthened by the country’s prudent fiscal policies, including remarkably low government debt. This financial restraint, combined with low interest rates and Switzerland's status as a safe haven, offers an added layer of security for investors seeking peace of mind in their financial endeavors.

Switzerland and international diversification

We build on Switzerland’s strengths to provide our clients with stability and expertise, guiding them through both opportunities and challenges with confidence.

1. Safe keeping

Switzerland's robust economy and stable currency offer unparalleled financial security, rooted in its democratic values and long-standing neutrality. Swiss institutions exemplify excellence and reliability, delivering exceptional service within a sophisticated global network that instils confidence in investors.

2. Investment

Embracing a diverse range of perspectives and asset classes allows you to unlock a wealth of opportunities. While US advisers may prioritize domestic strategies, we at PNAA are adept at navigating global markets, guiding you towards valuable prospects that extend far beyond home borders.

3. Currency

Although the US dollar has experienced a long period of stability, rising long-term debt trajectories and a multi-polar world order underscore the importance of currency diversification. This not only mitigates risk but should also be considered a way to enhance portfolios’ resilience over time.

How can Pictet North America Advisors help

We support our clients in reviewing whether their portfolios are suitably diversified across regions, currencies and asset classes, in line with their objectives and risk profile. Leveraging Swiss and international expertise, we help identify potential concentration risks and consider appropriate international diversification opportunities.

Contact us

If you have any questions or would like to explore international diversification in more detail, please contact our experts.

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