Portfolio diversification outside Western markets: 5 simple ETF + local asset ideas
Western markets have had a long run. The S&P 500, Western European equities, big tech, dollar-denominated bonds – they’ve dominated global portfolios for years.
But concentration risk is real. If most of your assets are tied to North America and Western Europe, you’re essentially betting that the same political systems, debt cycles, and regulatory climates will continue to outperform indefinitely.
You already know that’s a fragile assumption, to say the least, considering the impending collapse of the Western world. Diversification outside Western markets isn’t about drama. It’s about balance. And you don’t need anything exotic to do it.
Here are five simple ETF plus local asset combinations that make practical sense if you’re serious about geographic diversification.
Emerging Markets Broad ETF + Local Bank Deposits
A broad emerging markets ETF is the easiest first step. Funds tracking the MSCI Emerging Markets Index or FTSE Emerging Markets Index give exposure to countries like China, India, Taiwan, Brazil, and South Africa in one single position.
These indices include large and mid-cap companies across multiple sectors. Technology, financials, consumer goods – it’s not a fringe bet. Many of the world’s fastest-growing companies sit in these markets.
Now pair that with something boring but powerful: local bank deposits in a non-Western jurisdiction where you have legal residency.
Holding cash in a different banking system reduces your dependency on Western financial infrastructure. Just make sure the bank is regulated under a credible supervisory authority and that deposit insurance rules are clear. You’re not chasing yield here. You’re spreading institutional risk.
Asia-Pacific ex-Japan ETF + Singapore or Malaysia REITs
Asia-Pacific ex-Japan ETFs typically give you exposure to markets like Australia, South Korea, Hong Kong, Singapore, and increasingly Southeast Asia. These economies are deeply integrated into global trade but operate outside Western political frameworks.
Many of these countries maintain strong fiscal positions relative to heavily indebted Western states. Australia and Singapore, for example, have long histories of stable monetary policy and investment-grade sovereign ratings.
Layer on listed REITs in places like Singapore or Malaysia. Singapore REITs in particular are well-established, regulated, and widely held by international investors. They often own commercial, logistics, and retail assets across Asia.
You get regional equity exposure through the ETF, and tangible property-backed income through REITs. Different drivers. Different risks. Same region.
India-Focused ETF + Physical Gold Held Outside the West
India has become one of the largest equity markets in the world by market capitalization. It’s also one of the fastest-growing major economies in recent years, with structural reforms and a growing domestic investor base supporting its markets.
India-focused ETFs track large Indian companies across financials, IT services, energy, and consumer sectors. You’re not speculating on startups. You’re buying established firms listed on the National Stock Exchange of India and the Bombay Stock Exchange.
Now add physical gold stored outside Western jurisdictions. Not paper gold. Not a synthetic product. Allocated physical bullion stored in a reputable vault in Asia or the Middle East.
Gold has no counterparty risk. It doesn’t rely on any one currency or banking system. For centuries, it has functioned as a hedge during monetary instability. That hasn’t changed just because financial apps look sleek now.
Frontier Markets ETF + Agricultural Land Exposure
Frontier markets ETFs invest in smaller economies that aren’t yet classified as emerging markets. Countries like Vietnam, Romania, Morocco, and Kuwait often appear in these indices.
These markets are less correlated with large Western indices. They can be volatile, yes, but they’re driven by local growth cycles rather than Wall Street sentiment.
For a real-asset complement, consider agricultural land exposure in a stable non-Western country. In parts of Latin America and Southeast Asia, farmland remains significantly cheaper per hectare than in Western Europe.
Agricultural land has historically provided returns through both land appreciation and crop income. It also produces something tangible: food. In a world of expanding populations and periodic supply shocks, that matters.
Ownership structures vary by country, and you must respect local foreign ownership laws. Done properly, it’s one of the most straightforward inflation hedges available.
Global ex-US ETF + Second Residency Real Estate
A global ex-US ETF excludes American equities while still giving you exposure to developed and emerging markets worldwide. Europe, Japan, Canada, Asia – just not the United States.
For many portfolios heavily weighted toward US stocks, this is a simple mechanical rebalance. You reduce dependence on one single economy without abandoning global exposure.
Pair this with real estate in a country where you hold legal residency or long-term visa status. Property in parts of Latin America or Southeast Asia can be acquired at price levels far below major Western cities.
Residential property gives you optionality. You can live there, rent it out, or simply hold it as a base. It’s not just a financial asset. It’s a geopolitical hedge.
If regulatory environments tighten in one jurisdiction, having a legally established base elsewhere changes your leverage entirely.
Why This Isn’t About Betting Against the West
Diversifying outside Western markets doesn’t mean you expect an imminent collapse tomorrow morning. It means you acknowledge concentration risk.
Western economies carry high public debt levels relative to GDP. The United States (at nearly 40 TRILLION USD), Japan, and several European countries have sustained elevated debt burdens for years. That’s a matter of public record.
Monetary policy cycles in the West also tend to move in sync. When interest rates rise or fall across major Western central banks, correlated assets move together. That reduces the protective value of diversification within the same bloc.
Owning assets across different regulatory systems, currencies, and political environments reduces that synchronization risk. It’s structural diversification, not emotional positioning.
Currency Considerations You Shouldn’t Ignore
When you invest in foreign ETFs, you’re indirectly exposed to foreign currencies. An emerging markets ETF denominated in US dollars still reflects movements in the underlying local currencies.
That can amplify gains or losses depending on exchange rate movements. It’s not inherently good or bad, but you should understand it.
Holding part of your wealth in currencies like the Singapore dollar or the United Arab Emirates dirham spreads currency exposure beyond the dollar and euro. Some of these currencies have historically been managed with conservative monetary policy frameworks.
Again, it’s about balance. Not prediction.
Practical Implementation Without Overcomplicating It
You don’t need 27 ETFs and a spreadsheet that looks like a nuclear launch code. Five well-chosen vehicles combined with carefully selected local assets are enough for most people. Personally, I’m spread between roughly 7 to 8 at most.
Start with liquid instruments first. Broad ETFs are transparent, regulated, and easy to rebalance. Then layer in real assets once you understand local laws and tax implications.
Always confirm residency rules, capital controls, and property ownership restrictions before committing capital abroad. Many countries welcome foreign investment. Some impose limits. That’s not ideology. That’s compliance.
The Big Picture
For decades, Western investors were told that buying domestic index funds was all they needed. And during certain periods, that strategy worked extremely well.
But the global economy is no longer unipolar. Asia represents a substantial share of global GDP. Emerging markets account for a significant portion of global population growth and industrial output. Capital flows reflect that reality.
If you’re already thinking about geographic freedom, second residencies, or multiple bases, your portfolio should reflect that same mindset.
Spread across regions. Spread across asset classes. Spread across legal systems.
