If you're revisiting your equity portfolio in mid-2025, you're not alone. After a volatile first half of the year and continued macroeconomic crosscurrents—higher-for-longer rates, ongoing geopolitical fractures and renewed focus on capital discipline—investors globally are reassessing what they own, why and where.

Two indexes typically dominate the asset allocation conversation: the S&P 500 for U.S.-centric investors and the MSCI ACWI for those with a global orientation. But is there a more intentional—and potentially better-structured—way to frame a global equity portfolio today?

We think there is. One thoughtfully constructed blend we see merit in consists of:

• 60% in U.S. Value via WisdomTree U.S. Value Fund (WTV): This strategy seeks income and capital appreciation by investing primarily in U.S. equity securities that provide a high total shareholder yield with favorable relative quality characteristics.
• 20% in European Equities via WisdomTree European Opportunities Fund (OPPE): The strategy seeks exposure to European companies and is focused on both value stocks and companies benefitting from geopolitical and global policy shifts. Value stocks are defined as companies that provide a high "total shareholder yield," evidenced by return of capital to shareholders through either dividend distributions and/or the repurchase of shares (buybacks). The strategy also allocates to equities with exposures to thematic opportunities from developments in geopolitics, technology trends and macroeconomic conditions.
• 20% in Japanese Equities via WisdomTree Japan Opportunities Fund (OPPJ):The strategy is allocated to companies in four different buckets. First, securities of Japanese companies that are strategic holdings of Berkshire Hathaway.¹ Second, companies that provide a high "total shareholder yield," evidenced by return of capital to shareholders through either dividend distributions and/or buybacks, and positive trends in earnings and dividend growth. Third, companies classified as "corporate governance improvers," evidenced by a low valuation ratio (such as a low price-to-book ratio) and favorable earnings and dividend growth characteristics. Four, securities with exposures to thematic opportunities from developments in geopolitics, technology trends and macroeconomic conditions.

Let's unpack why this 60/20/20 allocation that we'll call the "WT Global Value Portfolio," could be a compelling alternative to traditional benchmarks.

U.S. Value (60% WTV): Shareholder Yield Meets Quality Discipline

While the S&P 500 continues to be dominated by a handful of mega-cap growth names—the Magnificent 7 —WTV targets a differentiated slice of the U.S. market. It screens for shareholder yield through dividends and net buybacks, but crucially overlays quality and valuation filters.

WTV's portfolio has evolved since inception in 2017, but its north star remains constant: invest in companies returning capital to shareholders while avoiding valuation traps. As of mid-2025²:

• WTV holds companies with a greater than 7% average shareholder yield
• Trades at a price-to-earningsbelow 14 times
• Deliberately avoids frothier hype-driven sectors

It's a value allocation that's not afraid to look different than more traditional value benchmarks. It actively tilts toward capital return and capital discipline, two traits the markets are rewarding again in a higher interest rate world.

European Opportunities (20% OPPE): Valuations, Policy Tailwinds and a Structural Rethink

Europe has long been the home of low valuations—but that alone isn't enough. What's changing in 2025 is the policy regime and fiscal direction.

OPPE combines traditional shareholder yield screens with a unique "GeoAlpha" overlay that targets themes leveraged to structural shifts, such as:

• European defense rearmament
• Industrial reshoring and infrastructure renewal
• Digitization and fiscal stimulus initiatives

As of summer 2025, Europe trades at a 30%-plus valuation discount to the U.S.,³ even after the initial wave of re-rating in sectors tied to defense and energy security. OPPE targets the segment of the European market that's less expensive, more capital-disciplined and geopolitically relevant.

It's an allocation that asks: What if the new European economy is being rebuilt—and investors aren't paying attention?

Japanese Opportunities (20% OPPJ): The Most Underappreciated Structural Reboot in Global Markets

Japan has gone from global value trap to global standout.

Behind the headlines of Warren Buffett buying into Japanese trading houses is a deeper transformation:

• Return on equity is structurally rising (thanks to the Tokyo Stock Exchange's pressure on underperformers⁴)
• Shareholder practices are modernizing, with record buybacks and dividend hikes⁵
• Policy shifts—particularly on corporate governance and capital allocation—are reinforcing competitiveness

OPPJ is designed to capture this. Like its European cousin OPPE, it blends shareholder yield and governance screens with sectoral and thematic overlays. Think companies:

• Adapting to semiconductor reindustrialization
• Leading in robotics and factory automation
• Benefiting from friend-shoring and supply chain relocation

Put simply, OPPJ gives investors access to the Japan that's emerging—not the one fading from memory.

Why This Allocation? Why Now?

This 60/20/20 framework isn't about esoteric factor tilts or hyperactive tactical trades. It's about anchoring your global equity exposure in capital discipline, valuation realism and geopolitical alignment.

Compared to MSCI ACWI, the allocation is:

• Structurally under-weight in the more expensive U.S. tech
• Over-weight in geographies with both potential valuation upside and policy tailwinds
• Deliberately tilted toward shareholder yield, quality and exposure to real-world policy momentum

And compared to the S&P 500, it:

• Avoids narrow market breadth driven by such groupings as the Magnificent 7 or its subsets
• Taps into multi-polar growth narratives (U.S., Europe, Japan)
• Gives a portfolio an offensive orientation sensitive to where these regions are seeking to grow, alongside the defensive balance that comes from not being all-in on the more hype-oriented themes

Figure 1: Standardized Performance

Figure 2 details the sector exposure story:

• Structural Over-weight to Industrials and Financials, Under-weight to Tech: The WT Global Value Portfolio allocates significantly more to Industrials (25.9%) and Financials (18.9%) than the S&P 500 (8.6% and 13.8%) or MSCI ACWI (11.0% and 17.7%), while maintaining a dramatically lower exposure to Information Technology (6.2%)—a stark contrast to the tech-heavy S&P 500 (34.0%).
• Anti-Momentum Positioning with Broader Sector Diversification: By avoiding overexposure to mega-cap tech and emphasizing more cyclical and value-oriented sectors like Energy, Materials and Consumer Staples, this portfolio may offer a differentiated return stream and potentially stronger performance in regime shifts away from growth-led equity markets.

Figure 2: How the WT Global Value Portfolio Breaks from Sector Concentration

As we described WTV, OPPJ and OPPE, shareholder yield and a focus on capital discipline was mentioned in each case. Figure 3 indicates the actual total shareholder yield and how that compares to the benchmarks.

• Superior Total Shareholder Yield: At nearly 6.0%, the WT Global Value Portfolio delivers more than three times the yield of the S&P 500 (below 2.0%) and MSCI ACWI (slightly above 2.0%), combining both elevated dividend income (2.41%) and substantial share reduction yield (3.57%).
• Disciplined Capital Return Profile: Unlike broad indexes, where buybacks dominate or dividends lag, WT Global Value balances both—favoring tangible shareholder return over capital reinvestment hype or speculative growth narratives.

Figure 3: The Total Shareholder Yield Advantage

Speaking with many investors, a primary and often-cited concern is valuation. Figure 4 shows how, on an array of fundamental measures, the WisdomTree blend is mitigating this particular risk.

• A Deliberate Valuation Discipline: With materially lower multiples across every metric—forward price-to-earnings (13.3x), price-to-book (1.9x), price-to-sales (0.9x) and price-to-cash flow (8.8x)—the WT Global Value Portfolio avoids the valuation premium embedded in mega-cap growth and instead seeks returns through multiple expansion and mean reversion, not price momentum.
• Patience as a Competitive Edge: This is not a trade on the next quarter—it's a posture for a multi-year payoff. The portfolio is positioned for environments where market leadership rotates, valuation gaps close and investors are rewarded for backing businesses with cash flow strength and normalized expectations.

Figure 4: Leaning into Tomorrow's Potential, Not Yesterday's Winners

Final Thought: What If This Is the Next Decade's Playbook?

The 2010s were dominated by U.S. growth and low rates. The 2020s are shaping up to be something very different.

Investors who reframe their global allocations not as index completions, but as intentional exposures to capital return, restructuring and strategic autonomy, may be positioning themselves ahead of the curve.

This isn't just a portfolio—it's a statement about how global equity markets are changing, and how to adapt as an investor.

¹ Refers to Itochu Corporation, Marubeni Corporation, Mitsubishi Corporation, Mitsui & Co., Ltd., Sumitomo Corporation. The source for these companies being mentioned as strategic holdings is Buffett, W. E. (2025, February 24). Berkshire Hathaway Inc. 2024 Annual Letter to Shareholders. Berkshire Hathaway Inc. https://www.berkshirehathaway.com/letters/2024ltr.pdf

² Sources: WisdomTree, FactSet, with data as of 7/18/25.

³ Source: Refers to a comparison, as of 4/30/25, of the S&P 500 Index and the MSCI Europe Index on the basis of forward P/E ratio. Data is from WisdomTree, FactSet, S&P and MSCI.

⁴ Source: Japan Exchange Group, Inc., "Measures to Promote Management Awareness of Cost of Capital and Stock Price," Tokyo Stock Exchange, 3/31/23. https://www.jpx.co.jp/english/news/1020/e_20230331-01.html

⁵ Source: "Japan's Share Buybacks Nearly Triple as Governance Push Gains Pace," Financial Times, 5/1/25.