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Isn't that a little too much weight to Emerging Markets(VWO)? How about simply 70% VT (Total World), and 30% BND

by jimlawruk 10y ago

hendzen 10y ago
It's a fair point. I included it because it has a high exposure to Chinese equities.
- deleted 10y ago
  [deleted]
emcq 10y ago
You would have a higher effective fee, 0.14% vs 0.10% if you had an equal split between VOO and VWO. That said, I think there is healthy skepticism with the world funds in terms of their ability to reduce risk considering so much correlation to us stock and dollar value, relatively high fees, and relatively weak long term performance relative to US markets. Some of this is due to China not making available some of their investment opportunities to foreigners. I'd love to get an index fund that has exposure to growing companies like DJI or Didi.
- twblalock 10y ago
  If you want to invest in Didi, which hasn't had an IPO yet, you can invest in Apple and Alibaba, which have invested a lot of money in Didi. Given that Apple is the largest holding in most S&P 500 and total stock market index funds, anyone who has invested in those funds will benefit somewhat from the success of Didi. Jack Bogle, the founder of Vanguard, goes so far as to argue that a broad US-market index fund is all you need for international exposure, because many US companies will benefit from the success of the international companies they have invested in and do business with. I don't quite buy that argument, but it's something to keep in mind when you construct a portfolio: index funds that appear to be distinct often overlap.
tanderson92 10y ago
You would be much more diversified, at lower cost, if you invested 50% in VSS (Small Cap International) and 50% in VOO. VSS has a negative fee due to its securities lending practices. And VSS has lower correlations with US stocks, while also possibly exposing you to small outperformance (in the 3-factor sense)

Isn't that a little too much weight to Emerging Markets(VWO)? How about simply 70% VT (Total World), and 30% BND

hendzen 10y ago

It's a fair point. I included it because it has a high exposure to Chinese equities.

deleted 10y ago
[deleted]

emcq 10y ago

You would have a higher effective fee, 0.14% vs 0.10% if you had an equal split between VOO and VWO. That said, I think there is healthy skepticism with the world funds in terms of their ability to reduce risk considering so much correlation to us stock and dollar value, relatively high fees, and relatively weak long term performance relative to US markets. Some of this is due to China not making available some of their investment opportunities to foreigners. I'd love to get an index fund that has exposure to growing companies like DJI or Didi.

twblalock 10y ago
If you want to invest in Didi, which hasn't had an IPO yet, you can invest in Apple and Alibaba, which have invested a lot of money in Didi. Given that Apple is the largest holding in most S&P 500 and total stock market index funds, anyone who has invested in those funds will benefit somewhat from the success of Didi. Jack Bogle, the founder of Vanguard, goes so far as to argue that a broad US-market index fund is all you need for international exposure, because many US companies will benefit from the success of the international companies they have invested in and do business with. I don't quite buy that argument, but it's something to keep in mind when you construct a portfolio: index funds that appear to be distinct often overlap.

tanderson92 10y ago

You would be much more diversified, at lower cost, if you invested 50% in VSS (Small Cap International) and 50% in VOO. VSS has a negative fee due to its securities lending practices. And VSS has lower correlations with US stocks, while also possibly exposing you to small outperformance (in the 3-factor sense)