International Stock Poll: Emerging vs Developed Ratio
International Stock Poll: Emerging vs Developed Ratio
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.
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.
Re: International Stock Poll: Emerging vs Developed Ratio
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.
Re: International Stock Poll: Emerging vs Developed Ratio
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.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.
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.
Re: International Stock Poll: Emerging vs Developed Ratio
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.
Re: International Stock Poll: Emerging vs Developed Ratio
According to Vanguard we are 87% developed, 13% emerging which is about 9% underweight in emerging.
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Re: International Stock Poll: Emerging vs Developed Ratio
I'm at 8.12% emerging (without Asia developed that typically gets included as "emerging") or 13% if I include them.sharpjm wrote:
I am personally sitting at 50/50 emerging/developed, but am considering leaning more towards Developed.
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.
Re: International Stock Poll: Emerging vs Developed Ratio
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...
Re: International Stock Poll: Emerging vs Developed Ratio
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.in_reality wrote:I'm at 8.12% emerging (without Asia developed that typically gets included as "emerging") or 13% if I include them.sharpjm wrote:
I am personally sitting at 50/50 emerging/developed, but am considering leaning more towards Developed.
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.
[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.
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Re: International Stock Poll: Emerging vs Developed Ratio
50-50 because it is simple.
Re: International Stock Poll: Emerging vs Developed Ratio
It makes a difference if you hold separate emerging market and developed market funds too, among other things.sharpjm wrote: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.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.
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.
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.
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Re: International Stock Poll: Emerging vs Developed Ratio
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.
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.
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Re: International Stock Poll: Emerging vs Developed Ratio
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.
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Re: International Stock Poll: Emerging vs Developed Ratio
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.
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.
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Re: International Stock Poll: Emerging vs Developed Ratio
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.
We do have a small tilt toward EM in our 529s, but not for any good reason. And it's pretty small.
Re: International Stock Poll: Emerging vs Developed Ratio
+1MindBogler wrote:50-50 because it is simple.
Me too.
There are no guarantees, only probabilities.
Re: International Stock Poll: Emerging vs Developed Ratio
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%.
Our ex-US funds are FSGDX, VSS and SCZ. they average out to somewhere in the low teens for EM%.
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Re: International Stock Poll: Emerging vs Developed Ratio
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
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
Re: International Stock Poll: Emerging vs Developed Ratio
27% emerging 73% other international.
10% emerging as % of investment portfolio so I don't get too excited about it.
10% emerging as % of investment portfolio so I don't get too excited about it.
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Re: International Stock Poll: Emerging vs Developed Ratio
Using Vanguard definitions:
Int'l is about 47% of equities for our portfolio.
Int'l is about 47% of equities for our portfolio.
Re: International Stock Poll: Emerging vs Developed Ratio
According to Vanguard: 40.7% Emerging, 59.2% Developed (29.6% Europe, 25.4% Pacific, 4.2% Canada), 0.1% Uncategorized Holdings.
Gordon
Re: International Stock Poll: Emerging vs Developed Ratio
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.
Re: International Stock Poll: Emerging vs Developed Ratio
My only international fund is Vanguard Total International so I am at market weight ... whatever that is ...
Re: International Stock Poll: Emerging vs Developed Ratio
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.
Why that amount? Round numbers are appealing.
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Re: International Stock Poll: Emerging vs Developed Ratio
30/70 emerging/developed.
Re: International Stock Poll: Emerging vs Developed Ratio
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.
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Re: International Stock Poll: Emerging vs Developed Ratio
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.
Re: International Stock Poll: Emerging vs Developed Ratio
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.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.
In any case, I am overweight EM and DM-small at about 30% each, with the remaining 40% DM.
Re: International Stock Poll: Emerging vs Developed Ratio
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.
I do tilt towards small in my int'l using mostly VSS, which also contains about 20% EM.
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Re: International Stock Poll: Emerging vs Developed Ratio
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.
Personally, my emerging market allocation is whatever Total International has, and I honestly don't know how much that is.
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Re: International Stock Poll: Emerging vs Developed Ratio
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.
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Re: International Stock Poll: Emerging vs Developed Ratio
Can you elaborate on what this is referring to?sharpjm wrote: Vanguard moving to 40% international equity
A specific Vanguard fund?
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Re: International Stock Poll: Emerging vs Developed Ratio
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.watchnerd wrote:Can you elaborate on what this is referring to?sharpjm wrote: Vanguard moving to 40% international equity
A specific Vanguard fund?
http://www.bogleheads.org/forum/viewtop ... 0&t=159493
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Re: International Stock Poll: Emerging vs Developed Ratio
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.
Re: International Stock Poll: Emerging vs Developed Ratio
Allocation target of 50% total international index, 25% emerging index, 25% VSS. Seemed like a good level of tilt to me.
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Re: International Stock Poll: Emerging vs Developed Ratio
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
This is one area that I believe can actually benefit from a managed versus index fund.
Ralph
Re: International Stock Poll: Emerging vs Developed Ratio
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
Kevin
If I make a calculation error, #Cruncher probably will let me know.
Re: International Stock Poll: Emerging vs Developed Ratio
I may have misunderstood the poll: is it asking what portion of international is emerging vs developed? Or overall?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.
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Re: International Stock Poll: Emerging vs Developed Ratio
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.watchnerd wrote:I may have misunderstood the poll: is it asking what portion of international is emerging vs developed? Or overall?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.
Last edited by JonnyDVM on Sat Apr 25, 2015 9:48 pm, edited 2 times in total.
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Re: International Stock Poll: Emerging vs Developed Ratio
International stock allocation: 0%,
International developed allocation: 0%,
International emerging allocation: 0%.
Where are those options in the poll?
International developed allocation: 0%,
International emerging allocation: 0%.
Where are those options in the poll?
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Re: International Stock Poll: Emerging vs Developed Ratio
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.
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.
Re: International Stock Poll: Emerging vs Developed Ratio
In that case, I need to change my answer.JonnyDVM wrote:I interpreted it as the portion of international.watchnerd wrote:I may have misunderstood the poll: is it asking what portion of international is emerging vs developed? Or overall?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.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Re: International Stock Poll: Emerging vs Developed Ratio
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 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.
Re: International Stock Poll: Emerging vs Developed Ratio
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.
Re: International Stock Poll: Emerging vs Developed Ratio
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?
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.
Re: International Stock Poll: Emerging vs Developed Ratio
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?
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
Re: International Stock Poll: Emerging vs Developed Ratio
It seems quite clear that you would pick 41-50% Emerging / 50-59% Developed.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?
Kevin
If I make a calculation error, #Cruncher probably will let me know.
Re: International Stock Poll: Emerging vs Developed Ratio
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
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Re: International Stock Poll: Emerging vs Developed Ratio
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.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?
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.
Re: International Stock Poll: Emerging vs Developed Ratio
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.
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.