When did global indices stop looking global?

Market capitalisation-weighted indices tend to favour yesterday’s winners and reward momentum, meaning US exceptionalism has led the most popular global indices to represent a US-centric world view. Consequently, investors may overlook diversification options, starting valuations, and allocations beyond benchmark weightings. Over the long term, equity markets tend to be efficient, with share prices broadly tracking the underlying fundamentals of businesses. However, over shorter periods, prices can diverge from fundamentals, creating both risks and opportunities. Starting valuations matter,...