May 29, 2026
Investment Insights: Are All-Equity ETFs Overexposed to The U.S.?
“It’s only when the tide goes out that you discover who’s been swimming naked.” – Warren Buffett
A year after the January 20, 2025, U.S. Presidential Inauguration, the tide kept turning and the evidence kept mounting: chaotic political regimes can have direct implications for investments. For investors, anticipating these regime changes and adapting proactively is a core responsibility. The hidden risk in 2022 was the illusion of diversification in 60/40 portfolios across market conditions. We believe a similar illusion of diversification now exists within most passive all-equity ETFs.
Taleb's turkey problem: How the 60/40 diversification illusion trapped investors
For decades, the 60/40 portfolio was a reliable diversifier, with bonds cushioning equities during market drawdowns. This illusion shattered in 2022 when both asset classes declined together, leaving investors with unexpected shortfalls in their financial plans. Nassim Nicholas Taleb, a renowned professor, author and former options trader, calls this "The Turkey Problem." In his book The Black Swan, Taleb explains how a turkey believes it is well cared for because it’s being fed day after day, only for its belief to be shattered by an unexpected event (Thanksgiving). For 60/40 portfolios, 2022 was that Thanksgiving moment.
Nassim Nicholas Taleb's Turkey Problem
"A turkey is fed daily, reinforcing its belief that it will continue to be fed indefinitely, until Thanksgiving Day arrives."
Source: Morningstar Direct. The 60/40 portfolio here is composed of 60% MSCI All-Cap World Index, and 40% Bloomberg Global Aggregate Bond Total Return Index.
Today’s hidden risk: U.S. overexposure in passive all-equity ETFs
For over a decade, buying the U.S. stock market has been the darling trade. We believe there are several factors at play to suggest a new, more chaotic regime is in place, where limiting exposure to any single region is a prudent move going forward. In our view, this is eerily similar in consequences to the diversification illusion we saw in 2022. Have investors become too anchored to recent U.S. outperformance?
The S&P 500 Index delivered 18.55% annualized over the past 13 years, but in the 12 years before that period, it averaged -0.06%. Ironically, enthusiasm for U.S. equities was low in 2013, as investors were still anchored to the prior decade’s stagnation.
S&P 500 Average Annualized Returns (CAD)
21st century — A tale of twho halves. Are expectations anchored to recent outperfromance?
Source: Morningstar Direct. As at Dec. 31, 2025.
The outlier that stuck to its principles
While the biggest names in passive all-equity ETFs slipped into U.S. overexposure, the CI GAM Multi-Asset team stayed anchored to true diversification. Cognizant of strategic concentration risks, we chose balanced exposure even when it meant looking different than the crowd. The chart below shows country weights for CI Equity Asset Allocation ETF (CEQT) relative to other all-equity ETFs available in Canada CEQT is a standout solution for those looking for diversification.
Have All-in-one Equity ETFs Gone All In On One Bet?
Most passive All-Equity ETFs have nearly half their portfolio riding one market
Source: Morningstar Direct, as at Dec. 31, 2025. The chart above shows country weights for CI Equity Asset Allocation ETF (ticker: CEQT) vs. Mackenzie All-Equity Allocation ETF, iShares Core Equity ETF, Vanguard All-Equity ETF, BMO All-Equity ETF and Fidelity All-in-One Equity ETF (ticker symbols: MEQT, XEQT, VEQT, ZEQT and FEQT, respectively).
That difference in country allocation has mattered. Since the recent political shift in the U.S. regime, CI Equity Asset Allocation ETF (CEQT) has outperformed its peers.
A step further toward diversification
While CEQT demonstrates the value of disciplined global equity diversification, CI Equity+ Asset Allocation ETF Fund (TSX: CEQP) extends that approach with a broader toolkit tailored for today's unpredictable and highly volatile market environment.
CEQP blends worldwide equity exposure with additional sources of return (8% allocation to gold and bitcoin) that tend to behave differently than traditional stocks. This allocation mix is designed to enhance resilience without abandoning growth orientation, applying the same forward-looking philosophy to a more complex market regime.
Target Allocation Mix
Important Reminders
- CEQT is an established, fully diversified global equity ETF with a demonstrable performance history, while CEQP is a newly launched Equity+ solution built on the same global diversification philosophy but designed to add broader asset class flexibility as it matures.
- By using CI’s valuation-aware, forward-looking LTCMA framework, CEQP avoids the passive tendency toward 45–50% U.S. weight, and instead maintains a materially lower, more intentional allocation designed for today’s more volatile regime.
- CEQP implements its gold and bitcoin exposure using CI’s own institutional-grade vehicles, ensuring clean, cost-efficient and fully integrated diversification that reduces reliance on the same U.S.-centric risk factors embedded in most all-equity ETFs.
For those exploring ways to broaden portfolio exposure beyond a single market, CI GAM’s Asset Allocation ETFs and Asset Allocation+ ETFs can offer a diversified approach designed to address concentration considerations across regions and asset classes.
| Fund Name | Ticker | Management Fee* | Positioning Piece |
|---|---|---|---|
| CI Equity+ Asset Allocation ETF Fund | CEQP | 0% | View here |
| *Effective January 27, 2026, this series’ annual management fee has been waived, resulting in an effective fee of 0%. The fee waiver will be in effect until June 30, 2026, and the Manager may, in its discretion, elect to extend the fee waiver beyond that date. | |||
About the Author
Adam Bahram is Director, Investment Strategist at CI Global Asset Management, where he oversees the firm’s asset allocation strategies. In this role, Adam is responsible for providing portfolio insights to institutional and advisor audiences while supporting the positioning and growth of CI GAM’s investment solutions.
Adam brings extensive experience in buy-side research analysis, asset allocation, and portfolio management. Prior to joining CI GAM, he served as an Associate Client Portfolio Manager on the Asset Allocation team at TD Asset Management, where he developed expertise in constructing and managing investment strategies. He has also served on the investment committee of a wealth management firm.
Adam holds a Master of Finance from the Sobey School of Business at Saint Mary’s University and is a CFA charter holder.
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