Many investors made it out of 2020 far better than they would have hoped earlier in the year, but a report from Capital Group shows it may be time to rebalance portfolios.

Analysts at the Los Angeles–based firm reviewed more than 4,000 portfolios of U.S. advisors. Portfolios were weighted heavily to U.S. equities, particularly growth stocks, they found, and bond holdings have gotten riskier.

The equities weighting in the average portfolio was 74% U.S. versus 26% non-U.S. That compares to 58% U.S. versus 42% non-U.S. in MSCI’s flagship ACWI global index, which covers large- and mid-cap stocks in 23 developed and 27 emerging markets.

While global markets haven’t kept pace with U.S. equities in recent years, the report’s authors recommended adding international exposure.

It was a similar story with growth and value holdings. Recent outperformance from tech companies has led to portfolios shifting to growth. In 2017, allocations were evenly split between growth, blend and value categories, the report said; last year, average allocations were 35% growth, 41% blend and 25% value.

“As we head into 2021, financial professionals should take this opportunity to check if their clients’ equity holdings are still aligned with their long-term goals,” the report said. “The message isn’t to avoid growth stocks, but rather to ensure that they haven’t outgrown their intended position and role in the portfolio.”

Commentary from Toronto-based Purpose Investments analyzed where to invest this year within the growth portion of portfolios. While a popular trade last year was TINA (“there is no alternative” to growth stocks), investment analyst Nick Mersch said there are now many alternatives.

“This means holding non-mega-cap technology as the rally broadens out through the smaller market cap players, which we believe will outperform on a relative basis,” he wrote. This includes fintech, clean energy, semiconductors and gaming companies.

Research and development is creating more intangible assets and fewer hard assets, which is skewing earnings metrics and the nature of value investing, he wrote.

“Value investing in technology should therefore be reframed as buying something for less than its worth — and this is very much alive if you can get ahead of secular trends,” the commentary said.

The third trend Capital Group noted in the portfolios it analyzed was a shift to risky bonds. Over the last two years, the average portfolio shifted from 11.7% in bonds that maintain a yield above an average U.S. Treasury, to almost 20% last year.

“This ‘hunt for yield’ left many investors ill-prepared for 2020’s volatility at a time when they needed their bond portfolios to shine brightest,” the report said.

“Investors who bucked this trend and held strong with high-quality core bond funds were rewarded when these investments did exactly what they were meant to do: preserve capital and provide diversification from equities.”

While equities bounced back quickly, this shouldn’t give investors a false sense of security, the report said.