EFA and EEM vs. VTIAX

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Investor1319
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EFA and EEM vs. VTIAX

Post by Investor1319 »

How do EFA and EEM compare to VTIAX other than the fact that they're ETFs?
TropikThunder
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Re: EFA and EEM vs. VTIAX

Post by TropikThunder »

Investor1319 wrote: Tue Jan 12, 2021 5:54 pm How do EFA and EEM compare to VTIAX other than the fact that they're ETFs?
EFA is ex-US Developed Markets (except for Canada).
EEM is ex-US Emerging Markets

VTIAX is both.
todaysBob
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Re: EFA and EEM vs. VTIAX

Post by todaysBob »

VTIAX(VXUS) have much lower expense ratio compared to the other two you mentioned. I do own VWO(equivalent to EEM but much lower ER) along with VXUS to get more emerging markets exposure.
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vineviz
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Re: EFA and EEM vs. VTIAX

Post by vineviz »

TropikThunder wrote: Tue Jan 12, 2021 6:51 pm
Investor1319 wrote: Tue Jan 12, 2021 5:54 pm How do EFA and EEM compare to VTIAX other than the fact that they're ETFs?
EFA is ex-US Developed Markets (except for Canada).
EEM is ex-US Emerging Markets

VTIAX is both.
Also neither EFA nor EEM is designed for retail investors. IDEV and IEMG are the droids you’re looking for.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
JoeNJ28
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Re: EFA and EEM vs. VTIAX

Post by JoeNJ28 »

vineviz wrote: Tue Jan 12, 2021 7:00 pm
TropikThunder wrote: Tue Jan 12, 2021 6:51 pm
Investor1319 wrote: Tue Jan 12, 2021 5:54 pm How do EFA and EEM compare to VTIAX other than the fact that they're ETFs?
EFA is ex-US Developed Markets (except for Canada).
EEM is ex-US Emerging Markets

VTIAX is both.
Also neither EFA nor EEM is designed for retail investors. IDEV and IEMG are the droids you’re looking for.
Why aren’t efa and eem for retail?
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grabiner
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Re: EFA and EEM vs. VTIAX

Post by grabiner »

JoeNJ28 wrote: Tue Jan 12, 2021 7:38 pm
vineviz wrote: Tue Jan 12, 2021 7:00 pm
TropikThunder wrote: Tue Jan 12, 2021 6:51 pm
Investor1319 wrote: Tue Jan 12, 2021 5:54 pm How do EFA and EEM compare to VTIAX other than the fact that they're ETFs?
EFA is ex-US Developed Markets (except for Canada).
EEM is ex-US Emerging Markets

VTIAX is both.
Also neither EFA nor EEM is designed for retail investors. IDEV and IEMG are the droids you’re looking for.
Why aren’t efa and eem for retail?
Much higher expenses. They are ideal for short-term trading, as they have high volume, but they will underperform lower-cost ETFs for long-term investors.
Wiki David Grabiner
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vineviz
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Re: EFA and EEM vs. VTIAX

Post by vineviz »

JoeNJ28 wrote: Tue Jan 12, 2021 7:38 pm Why aren’t efa and eem for retail?
These funds are specifically designed as short-term holdings for institutional investors, for whom liquidity is more important than cost.

So IEMG and EEM both track the MSCI Emerging Markets index, for example, but slightly different versions. IEMG holds 2,498 names but EEM holds only 1,196. EEM invests in only the most "investable" (i.e. liquid names) while IEMG invests in a more complete cross-section of emerging markets stocks. For reference, the average daily trading volume of EEM equals nearly 20% of the entire market cap of the index it tracks.

IEMG has an expense ratio of 0.14% while EEM has an expense ratio of 0.68%. That high expense ratio isn't A big a deal if you're an institution only holding it for a few days (average holding period of EEM is less than three weeks vs. over five months for IEMG) but it's a big deal for buy-and-hold individual investors.

Morningstar did an article on this a few years ago: https://www.morningstar.com/articles/83 ... rkets-etfs

For similar reasons, individual investors should probably avoid (and largely do) SPDR S&P 500 ETF Trust (SPY) in favor of other S&P 500 funds like IVV, VOO, and even SPDR Portfolio S&P 500 ETF (SPLG).
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
BabaWawa
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Re: EFA and EEM vs. VTIAX

Post by BabaWawa »

grabiner wrote: Tue Jan 12, 2021 8:47 pm
JoeNJ28 wrote: Tue Jan 12, 2021 7:38 pm
vineviz wrote: Tue Jan 12, 2021 7:00 pm
TropikThunder wrote: Tue Jan 12, 2021 6:51 pm
Investor1319 wrote: Tue Jan 12, 2021 5:54 pm How do EFA and EEM compare to VTIAX other than the fact that they're ETFs?
EFA is ex-US Developed Markets (except for Canada).
EEM is ex-US Emerging Markets

VTIAX is both.
Also neither EFA nor EEM is designed for retail investors. IDEV and IEMG are the droids you’re looking for.
Why aren’t efa and eem for retail?
Much higher expenses. They are ideal for short-term trading, as they have high volume, but they will underperform lower-cost ETFs for long-term investors.
VEA/VWO are a very good choice for international dev and emerging markets ETFs.
ldd4774
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Re: EFA and EEM vs. VTIAX

Post by ldd4774 »

BabaWawa wrote: Wed Jan 13, 2021 8:40 pm
grabiner wrote: Tue Jan 12, 2021 8:47 pm
JoeNJ28 wrote: Tue Jan 12, 2021 7:38 pm
vineviz wrote: Tue Jan 12, 2021 7:00 pm
TropikThunder wrote: Tue Jan 12, 2021 6:51 pm

EFA is ex-US Developed Markets (except for Canada).
EEM is ex-US Emerging Markets

VTIAX is both.
Also neither EFA nor EEM is designed for retail investors. IDEV and IEMG are the droids you’re looking for.
Why aren’t efa and eem for retail?
Much higher expenses. They are ideal for short-term trading, as they have high volume, but they will underperform lower-cost ETFs for long-term investors.
VEA/VWO are a very good choice for international dev and emerging markets ETFs.
Would you do VXUS and VWO or VEA/VWO if I want to add some emerging market exposure? Currently only about 10% invested in VXUS. Want to increase my international exposure to 15-20% of my portfolio. Thanks
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grabiner
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Re: EFA and EEM vs. VTIAX

Post by grabiner »

ldd4774 wrote: Thu Jan 14, 2021 3:51 pm
BabaWawa wrote: Wed Jan 13, 2021 8:40 pm VEA/VWO are a very good choice for international dev and emerging markets ETFs.
Would you do VXUS and VWO or VEA/VWO if I want to add some emerging market exposure? Currently only about 10% invested in VXUS. Want to increase my international exposure to 15-20% of my portfolio. Thanks
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If you aren't trying to overweight emerging markets, just use VXUS; it is simpler.

If you are trying to overweight emerging markets, you will need some VWO, and it doesn't make much difference whether you use VEA/VWO or VXUS/VWO as long as you get your desired weight. If you are in a high tax bracket, developed markets are likely to be more tax-efficient than emerging markets because of more qualified dividends, so VEA in taxable and VWO in tax-deferred might be a good choice. (I hold both in my taxable account, because my Roth IRA is filled with things that are less tax-efficient.)
Wiki David Grabiner
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