International Stock Poll: Emerging vs Developed Ratio

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.

What is your Emerging/Developed Ratio? (choose closest option)

0% Emerging / 100% Developed
6
5%
1-10% Emerging / 90-99% Developed
5
4%
11-20% Emerging / 80-89% Developed
38
29%
21-30% Emerging / 70-79% Developed
38
29%
31-40% Emerging / 60-69% Developed
23
18%
41-50% Emerging / 50-59% Developed
16
12%
51-67% Emerging / 33-49% Developed
1
1%
>67% Emerging / <33% Developed
2
2%
 
Total votes: 129

Topic Author
sharpjm
Posts: 657
Joined: Fri Feb 20, 2015 1:41 pm

International Stock Poll: Emerging vs Developed Ratio

Post by sharpjm »

I have read lots of opinions and standpoints on the international/domestic ratio but I haven't read many forum posts discussing how the international stocks are allocated. I would like to see where everyone is sitting for comparison.

This is especially interesting to me due to the historic volatility in Emerging and slow recovery of Developed since the recession. Between EU implementing QE, Vanguard moving to 40% international equity, and US stocks at all time highs, it seems that the stars are aligned for international to flourish. And with some people posting that they hold more than 40% stocks in international, this emerging/developed ratio can be quite important to the portfolio.

I am personally sitting at 50/50 emerging/developed, but am considering leaning more towards Developed.
lack_ey
Posts: 6701
Joined: Wed Nov 19, 2014 10:55 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by lack_ey »

Interesting point. Could you perhaps clarify which countries you count as developed and emerging? Never mind the index providers, but fund companies and Morningstar sometimes disagree frequently about South Korea and Taiwan.
Topic Author
sharpjm
Posts: 657
Joined: Fri Feb 20, 2015 1:41 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by sharpjm »

lack_ey wrote:Interesting point. Could you perhaps clarify which countries you count as developed and emerging? Never mind the index providers, but fund companies and Morningstar sometimes disagree frequently about South Korea and Taiwan.
I assume that most people only participate in international via mutual funds and/or ETFs that would be explicitly labeled as Emerging or Developed, or a combination that would explicitly state a ratio.

If someone is holding significant individual stocks from a country in question, I would default to the morningstar viewpoint for the purposes of the poll.
crake
Posts: 275
Joined: Thu Mar 14, 2013 2:12 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by crake »

I hold in proportion to their market cap weight which I believe is 80/20 DM/EM. I would just hold entirely Vanguard total international but my 401k only offers the Spartan Total International which does not include EM. I added an EM fund to my IRA to compensate.
User avatar
SpringMan
Posts: 5422
Joined: Wed Mar 21, 2007 11:32 am
Location: Michigan

Re: International Stock Poll: Emerging vs Developed Ratio

Post by SpringMan »

According to Vanguard we are 87% developed, 13% emerging which is about 9% underweight in emerging.
Best Wishes, SpringMan
User avatar
in_reality
Posts: 4529
Joined: Fri Jul 12, 2013 6:13 am

Re: International Stock Poll: Emerging vs Developed Ratio

Post by in_reality »

sharpjm wrote:
I am personally sitting at 50/50 emerging/developed, but am considering leaning more towards Developed.
I'm at 8.12% emerging (without Asia developed that typically gets included as "emerging") or 13% if I include them.

Market weight on Vanguard's Total World Stock ETF VT for emerging is 6.55% (according to Morningstar). Vanguard's emerging ETF VEMAX actually has about 17% in developed so I'll estimate you are closer to 40% emerging unless you took Asia developed, Israel and the UAE out.
User avatar
siamond
Posts: 6008
Joined: Mon May 28, 2012 5:50 am

Re: International Stock Poll: Emerging vs Developed Ratio

Post by siamond »

I chose to tilt a tad in favor of emerging countries (25%), but not that much compared to market weights. Your poll actually made me realize I have a little more, as I also have 15% in VSS (Int'l Small), which includes 20% of emerging. The rest is developed countries, large or small caps. So 28% total, I guess...
Topic Author
sharpjm
Posts: 657
Joined: Fri Feb 20, 2015 1:41 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by sharpjm »

in_reality wrote:
sharpjm wrote:
I am personally sitting at 50/50 emerging/developed, but am considering leaning more towards Developed.
I'm at 8.12% emerging (without Asia developed that typically gets included as "emerging") or 13% if I include them.

Market weight on Vanguard's Total World Stock ETF VT for emerging is 6.55% (according to Morningstar). Vanguard's emerging ETF VEMAX actually has about 17% in developed so I'll estimate you are closer to 40% emerging unless you took Asia developed, Israel and the UAE out.
My holdings are actually in TIAA funds. But thank you for pointing this out, I will check the specifics on TIAAs Emerging fund to see if there is any developed mixed in.

[edit] It looks like TEQLX is 28% developed which moves me to 66% developed overall. I've updated my response to the poll.
Last edited by sharpjm on Fri Apr 24, 2015 10:58 am, edited 1 time in total.
MindBogler
Posts: 1446
Joined: Wed Apr 17, 2013 12:05 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by MindBogler »

50-50 because it is simple.
lack_ey
Posts: 6701
Joined: Wed Nov 19, 2014 10:55 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by lack_ey »

sharpjm wrote:
lack_ey wrote:Interesting point. Could you perhaps clarify which countries you count as developed and emerging? Never mind the index providers, but fund companies and Morningstar sometimes disagree frequently about South Korea and Taiwan.
I assume that most people only participate in international via mutual funds and/or ETFs that would be explicitly labeled as Emerging or Developed, or a combination that would explicitly state a ratio.

If someone is holding significant individual stocks from a country in question, I would default to the morningstar viewpoint for the purposes of the poll.
It makes a difference if you hold separate emerging market and developed market funds too, among other things.

Morningstar seems to count Taiwan and South Korea as developed. Vanguard counts South Korea but not Taiwan as developed. My current allocation is apparently 66% developed, 34% emerging using two of Vanguard's funds based on FTSE indexes (66% VEA, 34% VWO). That turns into 72% developed, 28% emerging by Morningstar's definition.
User avatar
nisiprius
Advisory Board
Posts: 52211
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: International Stock Poll: Emerging vs Developed Ratio

Post by nisiprius »

Do you mean as a percentage of international holdings, or do you mean as a percentage of total holdings, counting the United States as a developed market? I'm guessing you mean ex-US and that's how I answered.

So-called "emerging markets" aren't a very clean asset class. They are a miscellaneous collection of markets with nothing particular in common except what they aren't, and no two authorities even agree on what countries count. Nor is there any particular reason to view them as "emerging" except for that being a better marketing term than "less developed" or "third world."

My international stock allocation is either 18% emerging markets or 13% emerging markets depending on whether I use Vanguard's or Morningstar's definition. That is to say, I use Vanguard Total International Stock Index and hold emerging markets according to their global cap weighting within international stocks.

Overall, given that the United States is a developed market, then either 4% or 3% depending on whose definition I use.
Last edited by nisiprius on Fri Apr 24, 2015 11:06 am, edited 1 time in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
IlliniDave
Posts: 2388
Joined: Fri May 17, 2013 7:09 am

Re: International Stock Poll: Emerging vs Developed Ratio

Post by IlliniDave »

My international is somewhere between 20-30% of my stock allocation, within that 20-30% it's split pretty equally, maybe 60/40 developed international/emerging market. I've got a total international index fund that has some of both, plus a smaller amount in an EM fund. So 60/40 is just a ballpark.
Don't do something. Just stand there!
User avatar
nisiprius
Advisory Board
Posts: 52211
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: International Stock Poll: Emerging vs Developed Ratio

Post by nisiprius »

By the way, if one holds Vanguard Total International Stock Index Fund--each country according to its cap weight--then it actually doesn't matter whether a country's market is classified developed or emerging. A country be could reclassified and nothing about the fund would need to change.

It occurs to me that if you are holding separate developed and emerging markets funds, then a reclassification raises the spectre of reconstitution glitches, possible front-running or at least anticipating the reclassification, possible issues if the two different funds are using indexes from different providers whose opinions on classification aren't synchronized.

In reality I don't think this amounts to anything important but it does point out the simplicity of cap-weighting a whole market.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
letsgobobby
Posts: 12073
Joined: Fri Sep 18, 2009 1:10 am

Re: International Stock Poll: Emerging vs Developed Ratio

Post by letsgobobby »

I have no idea! We own almost exclusively VEU/VXUS or their mutual fund equivalents. So whatever the market weight is, that's what we have.

We do have a small tilt toward EM in our 529s, but not for any good reason. And it's pretty small.
User avatar
grap0013
Posts: 1892
Joined: Thu Mar 18, 2010 1:24 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by grap0013 »

MindBogler wrote:50-50 because it is simple.
+1

Me too.
There are no guarantees, only probabilities.
feh
Posts: 2011
Joined: Sat Dec 15, 2012 10:39 am

Re: International Stock Poll: Emerging vs Developed Ratio

Post by feh »

I don't set out to own EM; whatever we do own is just part of the index.

Our ex-US funds are FSGDX, VSS and SCZ. they average out to somewhere in the low teens for EM%.
User avatar
Maynard F. Speer
Posts: 2139
Joined: Wed Mar 18, 2015 10:31 am

Re: International Stock Poll: Emerging vs Developed Ratio

Post by Maynard F. Speer »

3 parts Domestic
2 parts Developed
2 parts Emerging
2 parts Opportunistic (mostly Emerging)

I'd always intended to invest mainly in the rise of Asia - great demographics, great education, rapid shift towards consumer-driven economies, should benefit now from low commodity prices ... EM's a loose term, of course .. EM as a whole has been stagnating (with oil and politics hurting giants like Brazil and Russia), while Emerging Asia's been about the best place to be invested

I like smart beta for this reason - Low Vol seems like it could be a very shrewd way to regionally rotate towards stability
"Economics is a method rather than a doctrine, an apparatus of the mind, a technique of thinking, which helps its possessor to draw correct conclusions." - John Maynard Keynes
MnD
Posts: 5194
Joined: Mon Jan 14, 2008 11:41 am

Re: International Stock Poll: Emerging vs Developed Ratio

Post by MnD »

27% emerging 73% other international.
10% emerging as % of investment portfolio so I don't get too excited about it.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
livesoft
Posts: 86075
Joined: Thu Mar 01, 2007 7:00 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by livesoft »

Using Vanguard definitions:

Image

Int'l is about 47% of equities for our portfolio.
Wiki This signature message sponsored by sscritic: Learn to fish.
gkaplan
Posts: 7034
Joined: Sat Mar 03, 2007 7:34 pm
Location: Portland, Oregon

Re: International Stock Poll: Emerging vs Developed Ratio

Post by gkaplan »

According to Vanguard: 40.7% Emerging, 59.2% Developed (29.6% Europe, 25.4% Pacific, 4.2% Canada), 0.1% Uncategorized Holdings.
Gordon
dc81584
Posts: 581
Joined: Sat Apr 04, 2015 7:47 am

Re: International Stock Poll: Emerging vs Developed Ratio

Post by dc81584 »

5-10% emerging markets; I'm fine with this.
Last edited by dc81584 on Fri Apr 24, 2015 5:56 pm, edited 1 time in total.
patrick
Posts: 2594
Joined: Fri Sep 04, 2009 3:39 am
Location: Mega-City One

Re: International Stock Poll: Emerging vs Developed Ratio

Post by patrick »

My only international fund is Vanguard Total International so I am at market weight ... whatever that is ...
User avatar
jhfenton
Posts: 4754
Joined: Sat Feb 07, 2015 10:17 am
Location: Ohio

Re: International Stock Poll: Emerging vs Developed Ratio

Post by jhfenton »

We're at 55% U.S., 45% international. The 45% international consists of 15% VEA (Vanguard FTSE Developed Markets), 15% VSS (Vanguard FTSE ex-US Small Cap), and 15% VWO (Vanguard FTSE Emerging Markets). VSS has a small amount of emerging markets, so we're at something north of 1/3 of our international in EM, but less than 40%.

Why that amount? Round numbers are appealing.
jginseattle
Posts: 1125
Joined: Fri Jul 01, 2011 7:33 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by jginseattle »

30/70 emerging/developed.
MrVargas
Posts: 72
Joined: Sat Sep 11, 2010 4:35 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by MrVargas »

I'm 50/50.
User avatar
grabiner
Advisory Board
Posts: 35307
Joined: Tue Feb 20, 2007 10:58 pm
Location: Columbia, MD

Re: International Stock Poll: Emerging vs Developed Ratio

Post by grabiner »

I would have half my international in emerging markets and half in small-cap if the prices were the same. But Emerging Markets Index and FTSE All-World Ex-US Small-Cap ETF are both somewhat more expensive than Developed Markets Index, with fewer qualified dividends (important in a taxable account). And for emerging small-cap, iShares Emerging Markets Small-Cap (EEMS) is even more expensive; I need to use this to overweight emerging markets. Therefore, I have 3/8 developed large, 1/4 emerging large, 1/4 developed small, 1/8 emerging small.
Wiki David Grabiner
User avatar
Hawaiishrimp
Posts: 501
Joined: Tue Apr 14, 2015 4:13 am

Re: International Stock Poll: Emerging vs Developed Ratio

Post by Hawaiishrimp »

I'm 50/50 also
I save and invest my money, so money can make money for me, so I don't have to make money eventually.
User avatar
oneleaf
Posts: 2562
Joined: Mon Feb 19, 2007 4:48 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by oneleaf »

grabiner wrote:I would have half my international in emerging markets and half in small-cap if the prices were the same. But Emerging Markets Index and FTSE All-World Ex-US Small-Cap ETF are both somewhat more expensive than Developed Markets Index, with fewer qualified dividends (important in a taxable account). And for emerging small-cap, iShares Emerging Markets Small-Cap (EEMS) is even more expensive; I need to use this to overweight emerging markets. Therefore, I have 3/8 developed large, 1/4 emerging large, 1/4 developed small, 1/8 emerging small.
What metric are you using to compare the asset classes? Looking at P/E, as well as CAPE, it seems EM is cheaper than DM. Comparing P/B, EM is slightly more expensive.

In any case, I am overweight EM and DM-small at about 30% each, with the remaining 40% DM.
Bracket
Posts: 417
Joined: Sun Mar 10, 2013 7:50 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by Bracket »

My EM target is 20% of my international equity (I'm just trying to maintain the market weight, no tilt) so 20/80 EM/Dev. And I follow Vanguard in that I consider S. Korea to be developed, just because.

I do tilt towards small in my int'l using mostly VSS, which also contains about 20% EM.
User avatar
Sunny Sarkar
Posts: 2443
Joined: Fri Mar 02, 2007 12:02 am
Location: Flower Mound, TX
Contact:

Re: International Stock Poll: Emerging vs Developed Ratio

Post by Sunny Sarkar »

I heard Jack say this in the context of his 20% max international allocation that he gets asked about in every Bogleheads reunion (paraphrased)... If you want to bet on international, bet on emerging markets. Half (of international allocation) in emerging markets and half in developed markets is reasonable.

Personally, my emerging market allocation is whatever Total International has, and I honestly don't know how much that is.
"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-bottom cost, are the surest of all routes to the accumulation of wealth" - John C. Bogle
User avatar
asset_chaos
Posts: 2629
Joined: Tue Feb 27, 2007 5:13 pm
Location: Melbourne

Re: International Stock Poll: Emerging vs Developed Ratio

Post by asset_chaos »

A number of years ago (2009 to be precise) I moved to total world as my core stock investment. I don't know, though I could easily look it up, what the current split between emerging and developed is. I actually find it quite nice not needing to know that and other bits of information about how people divide up the global stock market or having to decide if I should act on that information.
Regards, | | Guy
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: International Stock Poll: Emerging vs Developed Ratio

Post by watchnerd »

sharpjm wrote: Vanguard moving to 40% international equity
Can you elaborate on what this is referring to?

A specific Vanguard fund?
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
lack_ey
Posts: 6701
Joined: Wed Nov 19, 2014 10:55 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by lack_ey »

watchnerd wrote:
sharpjm wrote: Vanguard moving to 40% international equity
Can you elaborate on what this is referring to?

A specific Vanguard fund?
Good question. It's about their advisory service and also their fund-of-fund allocations in the target retirement and lifestrategy series. Currently the funds have ex-US as 30% of equities.
http://www.bogleheads.org/forum/viewtop ... 0&t=159493
User avatar
Aptenodytes
Posts: 3786
Joined: Tue Feb 08, 2011 7:39 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by Aptenodytes »

I would have anchored a point in the poll around 17-20%, which captures what Vanguard considers the emerging percentage (18-19%) of the total market. That's the untilted percentage. I had to answer 11-20% which veers very far into the developed tilt and hardly at all into the emerging tilt.
User avatar
JonnyDVM
Posts: 2999
Joined: Wed Feb 12, 2014 5:51 pm
Location: Atlanta, GA

Re: International Stock Poll: Emerging vs Developed Ratio

Post by JonnyDVM »

Allocation target of 50% total international index, 25% emerging index, 25% VSS. Seemed like a good level of tilt to me.
I’d trade it all for a little more | -C Montgomery Burns
ralph124cf
Posts: 2985
Joined: Tue Apr 01, 2014 11:41 am

Re: International Stock Poll: Emerging vs Developed Ratio

Post by ralph124cf »

I have a slight overweight in emerging markets, and I would like to have more, but I am always concerned about the accounting standards in some less developed countries. What are you actually buying?

This is one area that I believe can actually benefit from a managed versus index fund.

Ralph
User avatar
Kevin M
Posts: 15787
Joined: Mon Jun 29, 2009 3:24 pm
Contact:

Re: International Stock Poll: Emerging vs Developed Ratio

Post by Kevin M »

I anchored on a target of 25% of international in emerging markets back when that was about cap weight in Vanguard Total International. Mostly because of tax-loss harvesting, I ended up with some developed market and emerging market funds in a 75/25 ratio, which I maintain (currently EM is 26%). But I also own some Vanguard Total International and have about 5% in international small (VSS), and I don't add additional EM to compensate (Vanguard shows current EM as 18.6% of Total International and 19% of VFSVX/VSS). So my net EM comes out to 24% of international. My target for international overall is 40% of stocks.


Kevin
If I make a calculation error, #Cruncher probably will let me know.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: International Stock Poll: Emerging vs Developed Ratio

Post by watchnerd »

sharpjm wrote:I have read lots of opinions and standpoints on the international/domestic ratio but I haven't read many forum posts discussing how the international stocks are allocated. I would like to see where everyone is sitting for comparison.
I may have misunderstood the poll: is it asking what portion of international is emerging vs developed? Or overall?
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
User avatar
JonnyDVM
Posts: 2999
Joined: Wed Feb 12, 2014 5:51 pm
Location: Atlanta, GA

Re: International Stock Poll: Emerging vs Developed Ratio

Post by JonnyDVM »

watchnerd wrote:
sharpjm wrote:I have read lots of opinions and standpoints on the international/domestic ratio but I haven't read many forum posts discussing how the international stocks are allocated. I would like to see where everyone is sitting for comparison.
I may have misunderstood the poll: is it asking what portion of international is emerging vs developed? Or overall?
I interpreted it as the portion of international. Also there's a little confusion in that total international contains a chunk of emerging markets already. One would have to add that portion in to figure out the actual ratio if they have a seperate emerging markets fund as well.
Last edited by JonnyDVM on Sat Apr 25, 2015 9:48 pm, edited 2 times in total.
I’d trade it all for a little more | -C Montgomery Burns
TradingPlaces
Posts: 1245
Joined: Sun Nov 09, 2014 12:19 pm
Location: 30.286029, -97.530011

Re: International Stock Poll: Emerging vs Developed Ratio

Post by TradingPlaces »

International stock allocation: 0%,
International developed allocation: 0%,
International emerging allocation: 0%.

Where are those options in the poll?
TradingPlaces
Posts: 1245
Joined: Sun Nov 09, 2014 12:19 pm
Location: 30.286029, -97.530011

Re: International Stock Poll: Emerging vs Developed Ratio

Post by TradingPlaces »

Considering the amount of confusion on this boards, this is a very poorly formulated poll.

I think the entire community of boggleheads would benefit a lot, if JUST ONE PERSON could come up with a reliable well to separate this two concepts:

- allocation as a % of TOTAL porfolio,
- allocation as a % of SUBSET of portfolio, where SUBSET is: (a) ALL STOCK, (b) ALL INTERNATIONAL.

E.g., this is my portfolio, adding up to 100%:

(a) US Govt Treasuries: 20%,
(b) US total stock market: 50%,
(c) non-US Govt Treasuries: 5%,
(d) non-US stock market, DEVELOPED: 15%,
(e) non-US stock market, EMERGING: 10%.

Now, is my emerging this: 10% / (10+15)% = 40%,
or is my emerging this: 10% / (10+15+50) = 13.333333%,
or is my emerging this: 10% / 100% = 10%?

So which is it?


But for those of us who are in 100% US Stocks, these are rather meaningless exercises.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: International Stock Poll: Emerging vs Developed Ratio

Post by watchnerd »

JonnyDVM wrote:
watchnerd wrote:
sharpjm wrote:I have read lots of opinions and standpoints on the international/domestic ratio but I haven't read many forum posts discussing how the international stocks are allocated. I would like to see where everyone is sitting for comparison.
I may have misunderstood the poll: is it asking what portion of international is emerging vs developed? Or overall?
I interpreted it as the portion of international.
In that case, I need to change my answer.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
User avatar
Kevin M
Posts: 15787
Joined: Mon Jun 29, 2009 3:24 pm
Contact:

Re: International Stock Poll: Emerging vs Developed Ratio

Post by Kevin M »

The poll seems clear to me, especially if you read the OP that explains it.

If you own only Vanguard Total International, then your ratio of EM/Dev is 18.6/81.4 using Vanguard definitions. If you also own separate DM and EM funds, you must do some arithmetic to determine your overall ratio.

As some posters have mentioned, there are different definitions of developed and emerging markets, so if you hold funds that track different DM/EM indexes, that could complicate things. If you hold only Vanguard index funds (EDIT: and use Vanguard's definitions of EM and DM), it should be straightforward. They have a Developed Markets fund and an Emerging Markets fund, each of which is 100% DM or EM. They provide the EM portion of their other international funds.

I own Vanguard Total International (18.6% EM), Developed Markets (100% DM), Emerging Markets (100% EM), and FTSE All-World ex-US Small-Cap Index Fund (19.00% EM). I also own Fidelity Spartan International, which I count as 100% DM (EAFE index); although Fidelity and Vanguard use different indexes for developed markets, I don't think it makes much difference for purposes of answering this poll.

So the denominator in my calculation of EM % is the dollar value sum of all of the above international funds. The numerator is 18.6% of the dollar value of VG Total International, 19% of VSS, and 100% of Vanguard Emerging, and I come up with 24% in EM, so 24/76 EM/DM using OP's way of describing the ratio.

EDIT: I also understand the point that if you use definitions other than the ones Vanguard uses, you will get a different answer.

Kevin
If I make a calculation error, #Cruncher probably will let me know.
Topic Author
sharpjm
Posts: 657
Joined: Fri Feb 20, 2015 1:41 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by sharpjm »

I had thought that between the thread title (emerging vs developed ratio), poll options (all options add to 100%), and my explanation in the original post that the poll was quite clear. If you're still confused I am not sure how else to explain it, sorry.
User avatar
Doc
Posts: 10607
Joined: Sat Feb 24, 2007 12:10 pm
Location: Two left turns from Larry

Re: International Stock Poll: Emerging vs Developed Ratio

Post by Doc »

AA 60/40
Domestic/International 80/20
Developed/EM 80/20
EM benefit +10% (Ten percent - yeh really? Would you like to buy a bridge over the East River?)

.60*.20*.20*10%=24 bps

Does it make any difference at all?

If you have enough EM to make a difference in your total portfolio return you probably won't get much sleep worrying about that Emerging Market's government or market system. How many Venezuela's are there in the world? How many will there be in five years? Do you really need/want any EM at all?
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: International Stock Poll: Emerging vs Developed Ratio

Post by watchnerd »

EM is 15% of my total portfolio.
EM is 27% of my equities
EM is 50% of my international equities

Based on this, which poll answer should I pick?
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
User avatar
Kevin M
Posts: 15787
Joined: Mon Jun 29, 2009 3:24 pm
Contact:

Re: International Stock Poll: Emerging vs Developed Ratio

Post by Kevin M »

watchnerd wrote:EM is 15% of my total portfolio.
EM is 27% of my equities
EM is 50% of my international equities

Based on this, which poll answer should I pick?
It seems quite clear that you would pick 41-50% Emerging / 50-59% Developed.

Kevin
If I make a calculation error, #Cruncher probably will let me know.
gkaplan
Posts: 7034
Joined: Sat Mar 03, 2007 7:34 pm
Location: Portland, Oregon

Re: International Stock Poll: Emerging vs Developed Ratio

Post by gkaplan »

ralph124cf wrote:I have a slight overweight in emerging markets, and I would like to have more, but I am always concerned about the accounting standards in some less developed countries. What are you actually buying?

This is one area that I believe can actually benefit from a managed versus index fund.

Ralph

Urban legend.
Gordon
User avatar
Aptenodytes
Posts: 3786
Joined: Tue Feb 08, 2011 7:39 pm

Re: International Stock Poll: Emerging vs Developed Ratio

Post by Aptenodytes »

TradingPlaces wrote: E.g., this is my portfolio, adding up to 100%:

(a) US Govt Treasuries: 20%,
(b) US total stock market: 50%,
(c) non-US Govt Treasuries: 5%,
(d) non-US stock market, DEVELOPED: 15%,
(e) non-US stock market, EMERGING: 10%.

Now, is my emerging this: 10% / (10+15)% = 40%,
or is my emerging this: 10% / (10+15+50) = 13.333333%,
or is my emerging this: 10% / 100% = 10%?

So which is it?
Sometimes it is not clear what people mean, but in this case it is very clear. The last choice is clearly ruled out -- it makes no sense whatsoever (the question is about stocks). The second choice is also ruled out, because the question is about international stocks. The first choice is the only one that makes sense.

Unless the OP went back and edited the posts to make formerly unclear language clear. One is expected to note that edits were made in such a case.
MnD
Posts: 5194
Joined: Mon Jan 14, 2008 11:41 am

Re: International Stock Poll: Emerging vs Developed Ratio

Post by MnD »

I've stopped using fixed percentages both for EM:developed and even US:International.
I have no idea what percentage of the overall pie EM or international is going to constitute going forward.
I want to be exposed to the growth of various equity asset classes at market cap.
Fixing percentages and forcing your portfolio into that seems contrary to that. Plus it's a lot of work and transactions.
Maybe EM will end up being 50% of global market cap. Are you going to spend years and decades rebalancing away from that?
On what basis would you be doing so?

Where fixing percentages and re-balancing does seem useful is in equity:fixed income. I'll continue that on the basis of risk/reward control.
Otherwise I'll look at the Vanguard World Stock pie once a year and verify that my portfolio is roughly the same as far as US, International, EM etc.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
Post Reply