Generally the default fund in a decent 401(k) (employer managed but largely employee funded retirement plan) will be a "target date retirement fund" that contains a mix of equities and bonds according to the expected risk tolerance of someone at that age, and generally the equity component is also split between US and foreign equities.

e.g. Fidelity's fund for people planning to retire around 2050 https://fundresearch.fidelity.com/mutual-funds/summary/31579...

3% less annual returns than the S&P500 over 10 years and the entire fund lifetime. That's a considerable difference.

Yes, diversification results in lower returns than investing in just the best performing asset class.

That's what happens when you are in a 10+ year bull market. That doesn't mean 100% US equity allocation is a good idea starting now.

target date funds always confused me, b/c they don't account for the rest of my portfolio.

My IRA/401(k) actually has close to 100% cash/bonds to minimize annual taxable impact and the rest of my portfolio is equities.

Many people don't have a "rest of their portfolio".

There is no annual taxable impact in a 401k nor IRA

Italy - vwce or any all world

This of course if you're doing by yourself, banks definitely won't recommend that but some other bullshit fund with high costs and poor performances

Disagree on that being the advice in the US. Most basic investment advice (and target-date funds) will use a three-fund portfolio containing US, ex-US, and bonds.

In Europe bonds are mostly out of fashion because they pay very little or have considerable risk of default. At least for retail investors.

You normally add bonds when nearing retirement.