"It's a one-way train" - the case for looking beyond the US has never been stronger

Please note, this interview was recorded Wednesday, 29 April, 2026

When you think of investing, it’s natural for the US and the renowned Magnificent Seven to come to mind, and for years that instinct was rewarded.

What if I told you that the US is no longer the obvious default when it comes to putting your hard earned cash to work?

That is the view of VanEck’s Anna Wu, who argues the era of defaulting to the US may be coming to an end. The data backs her up. In 2025, US equities ranked at the bottom across small cap, large cap and bonds, trailing Japan, broader Asia, emerging markets and gold.

"When there are brighter and shinier toys out there, I think it's worthwhile exploring. If you just go into US equities broad-based, you're wasting capital because you're not getting the bang for the buck."

If not the US, then where?

In this interview, Wu outlines where to find opportunities outside the US, what diversification actually means in today’s market and the thinking behind VanEck’s newly launched Core+ Diversified Active ETF suite.

Interview Summary

Why US concentration is becoming a liability

US markets have a concentration problem and it is getting harder and harder to ignore. A handful of mega-cap technology stocks are doing the heavy lifting, while the rest of the market contributes far less than most investors realise.

"A handful of large techs, in particular the Magnificent Seven, are doing the heavy lifting from an earnings point of view and from a returns point of view. But the other 493 are not doing as much," Wu says.

However, this isn’t to say that investors should exit the US, where earnings growth, consistently above 20% year-on-year, remains unmatched globally. Valuations remain historically elevated, and that creates a risk asymmetry that passive US exposure no longer adequately compensates for.

Developed markets: value and earnings are returning

For balanced or defensive portfolios, Japan and Europe stand out. Both have improved earnings trajectories and more attractive valuations, and are natural homes for value-style stocks, which have historically outperformed in stagflationary environments.

"We're stepping into a stagflationary outlook. That level of stagflationary risk is higher," Wu says.

Europe and Japan, which used to be in low-to-no earnings growth territory, are now delivering high single-digit EPS growth.

"For mature markets, it's actually a great earnings number. It's also a great relative value call for that upside additional that you are going to get," Wu says.

Emerging markets: a structural re-rating underway

"Emerging markets are actually at their peak point of multi-year attractiveness right now," Wu says and points to three structural forces that underpin the case.

First, US dollar weakness, which Wu frames as a multi-year cycle rather than a multi-month trade. Second, emerging economies are carrying significantly less debt relative to GDP than developed peers including the US. Third, central banks are growing increasingly independent from the Federal Reserve.

"They're not just following the US anymore. So that breaks the unhealthy cycle of the boom and bust right after a US cycle. The US dollar dominance is on the downtrend and it's a one-way train." 

Within that universe, she highlights three standout opportunities:

• South Korea, undergoing a corporate governance overhaul that could drive valuation re-ratings across AI, banks and industrials
• China, which she describes as building a parallel AI ecosystem backed by substantial government and private capital
• India, still posting GDP growth of 6 to 7% despite geopolitical headwinds and an oil import burden

The AI trade investors are getting wrong

Wu challenges one of the most crowded trades in the market. She sees software as the overcrowded, richly valued end of the AI story and argues investors are underestimating what she calls "the most physical, tangible, but somehow invisible story of AI, the infrastructure side of things, and also the energy side of things."

Semiconductor companies such as Micron (NASDAQ: MU) and SK Hynix (KRX: 00660) are primed for further valuations re-rating as part of the global physical AI transformation. She points to South Korean chipmaker SK Hynix (KRX: 000660) as a prime example, a company that leads global high bandwidth memory chip manufacturing and rallied well over 200% in the 12 months prior to our conversation.

"That kind of company is less known and it's not in the US, but it needs attention because it has massive growth opportunity right there," Wu says. 

The next winners in AI, she argues, are global, not just American.

Portfolio construction: why diversification and ETFs matter again

Wu argues the current environment represents a genuine regime shift. The post-COVID market was defined by low rates and concentrated leadership. Today's market is shaped by higher rates, geopolitical uncertainty and a maturing technology cycle, making diversification not just prudent but necessary.

Modern ETFs, she argues, allow investors to express precise economic views across regions, sectors and factors without sacrificing liquidity, a point made more urgent by recent stresses in private markets. 

Underlying all of this is a data point Wu describes as genuinely surprising: historical data tells us around 94% of the variation in portfolio returns over time is explained by asset allocation policy, not stock selection and not market timing.

"It shocked me as well when I saw the number," she says. 

That finding is central to the design of VanEck's newly launched Core+ Diversified Active ETF range. The suite comprises three portfolios, each targeting a different risk/return profile:

• VanEck Core+ Diversified Balanced Active ETF (ASX: VBAL) at CPI + 3%
• VanEck Core+ Diversified Growth Active ETF (ASX: VGRO) at CPI + 4%
• VanEck Core+ Diversified High Growth Active ETF (ASX: VHGR) at CPI + 5%

Rather than leaving investors to solve the asset allocation problem themselves, the range is built to handle it actively, combining market cap strategies, smart beta products and actively managed ETFs across both growth and defensive assets. For everyday Australian investors, Wu says, it is designed to take the headache out of portfolio construction without sacrificing precision or flexibility.

"Diversification is the only free lunch in investment. And that free lunch is served by ETFs."