International Index Fund Question

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ku96
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International Index Fund Question

Post by ku96 »

I currently have about 20% of my retirement/long term money in the Vanguard Total Stock Market Index Fund in my rollover IRA. Would the Vanguard FTSE All-World ex-US Index Fund be a better option?

This would be the only international fund I have, so I want to be as diversified across the world as I can be with one fund.
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retiredjg
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Re: International Index Fund Question

Post by retiredjg »

ku96 wrote:I currently have about 20% of my retirement/long term money in the Vanguard Total Stock Market Index Fund in my rollover IRA. Would the Vanguard FTSE All-World ex-US Index Fund be a better option?

This would be the only international fund I have, so I want to be as diversified across the world as I can be with one fund.
These funds are not comparable. One is US stocks. One is everything else. Most people think you should hold both US and international, not one or the other.

If you want to hold both in one fund, Vanguard has a fund for that but it is more expensive than holding the two separately and it has more international stock than some people want.

I wonder if you think "international" includes both? Not in this case.
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TJAJ9
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Re: International Index Fund Question

Post by TJAJ9 »

ku96 wrote:I currently have about 20% of my retirement/long term money in the Vanguard Total Stock Market Index Fund in my rollover IRA. Would the Vanguard FTSE All-World ex-US Index Fund be a better option?

This would be the only international fund I have, so I want to be as diversified across the world as I can be with one fund.
Having both Total Stock and FTSE All-World ex-US (or Total International) would probably be the best option. You would then be globally diversified.

If you want to be globally diversified in stocks with only one fund, Vanguard's Total World Index (VTWSX) is an option.
YDNAL
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Re: International Index Fund Question

Post by YDNAL »

ku96 wrote:I currently have about 20% of my retirement/long term money in the Vanguard Total Stock Market Index Fund in my rollover IRA. Would the Vanguard FTSE All-World ex-US Index Fund be a better option?
ku,

Your question implies that you don't know how to look under the hood of various investments.
  • As such, you shouldn't be picking funds without a plan and asset allocation; and understading how each investment works in an overall portfolio.
  • Read through the following link and pick-up a couple of good books - it will be time well invested.
    Investment Planning
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ku96
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Post by ku96 »

My mistake on my original post. I actually have 20% of my portfolio in the Vanguard Total International Stock Index Fund. I incorrectly typed "Total Stock Market Index Fund". Sorry to anyone that I confused.
YDNAL
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Re: International Index Fund Question

Post by YDNAL »

ku96 wrote:My mistake on my original post. I actually have 20% of my portfolio in the Vanguard Total International Stock Index Fund. I incorrectly typed "Total Stock Market Index Fund". Sorry to anyone that I confused.
Compare Funds
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brisni
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Post by brisni »

I think the main difference is the FTSE index includes Canada. It is also slightly higher ER (0.4 vs 0.32).

- Brian
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Ted Valentine
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Post by Ted Valentine »

brisni wrote:I think the main difference is the FTSE index includes Canada. It is also slightly higher ER (0.4 vs 0.32).

- Brian
Also...

The FTSE exUS has a 2% fee if you hold <2 months.

FTSE exUS has a ETF version, allowing conversions if you want to do that sort of thing.
Although our intellect always longs for clarity and certainty, our nature often finds uncertainty fascinating.
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retiredjg
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Post by retiredjg »

ku96 wrote:My mistake on my original post. I actually have 20% of my portfolio in the Vanguard Total International Stock Index Fund. I incorrectly typed "Total Stock Market Index Fund". Sorry to anyone that I confused.
In that case, it is purely personal preference.
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TJAJ9
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Post by TJAJ9 »

ku96 wrote:My mistake on my original post. I actually have 20% of my portfolio in the Vanguard Total International Stock Index Fund. I incorrectly typed "Total Stock Market Index Fund". Sorry to anyone that I confused.
Total International and FTSE All-World ex-US are nearly identical. Flip a coin or go with your personal preference. FTSE All-World ex-US includes Canada -- Total International does not.
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nisiprius
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Post by nisiprius »

Vanguard has both funds in order to keep investors baffled, confused, and in an eternal state of analysis paralysis. I cannot think of any other reason. :)

The Bogleheads wiki article may be helpful.

http://www.bogleheads.org/wiki/Compare_ ... onal_Funds

To add one more piece of confusion to the situation:

Vanguard has a list of nine funds they identify as "core" funds here:
https://personal.vanguard.com/us/funds/vanguard/core

Given that Vanguard FTSE All-World ex-US Index Fund (VFWIX) seemingly has the "better," more complete, and more logical index, I wonder VGTSX is the one they continue to designate as a "core" fund?
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