Summary
All Country and S&P 500 funds are two of the most common choices that New NISA beginners struggle to compare.
In simple terms, choose All Country if you want broad global diversification. Choose the S&P 500 if you want stronger exposure to U.S. growth.
| Comparison Point | All Country | S&P 500 |
|---|---|---|
| Investment region | Global | Mainly the U.S. |
| Diversification | Broad | Concentrated in the U.S. |
| Growth expectation | Global economy overall | Growth of U.S. companies |
| Risk | Diversified beyond the U.S. | U.S. concentration risk |
| Suited for | People who want simple global diversification | People who can believe in and hold U.S. stocks long term |
For beginners, the clearest approach is to use All Country as the core if you are unsure, and choose the S&P 500 only if you want stronger U.S. exposure.
What Is All Country?
In Japan, "All Country" generally refers to investment trusts that invest in global equities.
A representative index, MSCI ACWI, broadly covers stock markets in both developed and emerging countries.
MSCI states that the MSCI ACWI captures about 85% of the global investable equity opportunity set.
In other words, All Country is an investment that does not try to guess which country will win.
It is like holding the U.S., Japan, Europe, emerging markets, and other regions together.
What Is the S&P 500?
The S&P 500 is an equity index composed of 500 leading large-cap U.S. companies.
S&P Dow Jones Indices describes the S&P 500 as a leading gauge of U.S. large-cap equities.
It includes many global companies such as Apple, Microsoft, NVIDIA, Amazon, Alphabet, and Meta.
However, even if those companies operate globally, the index itself is U.S. equities.
It is strongly affected by the U.S. economy, U.S. companies, the dollar, and U.S. interest rates.
The Biggest Difference
The biggest difference is U.S. concentration versus global diversification.
| Perspective | All Country | S&P 500 |
|---|---|---|
| Country diversification | High | Low |
| U.S. weight | High, but only part of the world | Almost 100% U.S. |
| Emerging markets | Included | Not included |
| Japanese stocks | Included | Not included |
| U.S. large-cap tech | Included | Reflected more strongly |
In practice, All Country funds also include many U.S. stocks.
So even if you buy All Country, you still receive some benefit from U.S. growth.
The difference is whether you also hold countries outside the U.S.
The Risk of Choosing Only by Past Returns
In recent years, the S&P 500 has often looked stronger.
That was largely because U.S. large-cap technology companies grew significantly.
But what was strong in the past will not necessarily stay strong in the future.
| Selection Method | Caution |
|---|---|
| Choosing S&P 500 based on past returns | You may worry about buying near highs |
| Choosing All Country only because it is diversified | It may underperform the U.S. alone for some periods |
| Choosing based on social media popularity | You may lose your reason to hold during a downturn |
| Choosing only by fees | You may miss differences in investment exposure |
What matters in investing is not whether you can choose it when it is rising, but whether you can keep holding when it falls.
Which Should Beginners Choose?
If a beginner is unsure, All Country is easier to explain as a first choice.
The reason is that it does not make a single-country bet.
| Investor Type | Suitable Choice |
|---|---|
| Wants to avoid overthinking | All Country |
| Wants exposure to global growth | All Country |
| Believes strongly in U.S. corporate growth | S&P 500 |
| Can tolerate U.S.-concentrated volatility | S&P 500 |
| Wants both | All Country core plus a small S&P 500 allocation |
That does not mean All Country is absolutely safe.
If it is 100% equities, even global equities can fall sharply.
Is It Okay to Buy Both?
You can buy both All Country and S&P 500 funds.
But doing so usually raises your U.S. exposure more than it increases diversification.
Because All Country already includes many U.S. stocks, adding the S&P 500 increases concentration in the U.S.
| Combination | What It Really Means |
|---|---|
| 100% All Country | Global diversification |
| 100% S&P 500 | U.S. concentration |
| 70% All Country + 30% S&P 500 | Global diversification with a U.S. tilt |
| 50% All Country + 50% S&P 500 | Strong U.S. tilt |
If you buy both, decide based on how much you want to raise your U.S. weight, not simply because splitting it half and half feels balanced.
How to Think About It in New NISA
New NISA is a system meant to be used over the long term.
According to the Financial Services Agency and Japan's government public relations information, the 2024 New NISA became permanent and allows the accumulation investment quota and growth investment quota to be used together.
For long-term use, simpler product selection is easier to maintain.
| Policy | Number of Products |
|---|---|
| Avoid overthinking | One All Country fund |
| Focus on the U.S. | One S&P 500 fund |
| Tilt slightly more toward the U.S. | All Country + S&P 500 |
| Also want high-dividend stocks | Separate the investment purpose |
If beginners start with too many products, management becomes difficult.
Keeping it to one or two funds at first is realistic.
Summary
The difference between All Country and the S&P 500 is global diversification versus U.S. concentration.
If a beginner is unsure, using All Country as the core is the easier choice to understand.
If you strongly believe in U.S. corporate growth and can tolerate U.S.-concentrated volatility, the S&P 500 can also make sense.
Rather than asking which is the single correct answer, ask whether you can explain why you could hold it for 20 years.
References
- MSCI, "MSCI ACWI Index"
- S&P Dow Jones Indices, "S&P 500"
- Government Public Relations Online, "What Is NISA? A Clear Explanation"