Is this a good international fund?

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tjstokes97
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Is this a good international fund?

Post by tjstokes97 »

Hey everyone,

I'm considering shifting to an all equities strategy in my 401k. I'm currently in a target date but looking at my situation, 27 years old and having a pretty solid pension at work as well I think I'm comfortable moving to only equities.

My company offers some really solid funds for the US market. Not a total market but good Vanguard Large/Medium/Small market funds that I have seen mentioned here and trust.

But our international options I could use some help with. One is from American Funds and has a high expense ratio. Knowing American Funds this is a bad choice. But we also have one from State Street and I'm entirely unfamiliar. I can't find any info on here or elsewhere about the fund. I've written out the name and details below and am hoping someone could give me an idea of if this is a good fund from a Boglehead perspective or if I should skip it and weight international higher in my IRA to counter balance.

State Street World ex US Index Non-Lending Series Fund Class A Unitized
Expense ratio is .0268%

I've got the fund info screenshoted from my 401k app I just need to figure out how to properly link that here if anyone wants to see that.

I appreciate any help someone could provide.
muffins14
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Re: Is this a good international fund?

Post by muffins14 »

Does it have a ticker symbol?
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Rocinante Rider
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Re: Is this a good international fund?

Post by Rocinante Rider »

It looks like the State Street offering tracks the MSCI World ex-USA Index, which is a large and mid cap developed market international index comprised of 22 developed market countries, not including the US. Thus, it won't cover emerging market nations, but if it were me, I'd go with the low cost State Street index fund and stay away from a higher cost actively managed fund. A 0.0268% ER is great.

If your 401k doesn't offer an emerging markets index fund and you want to add one, you could consider doing so in an IRA or other tax-deferred account. Vanguard's VWO would fit the bill. If possible, I'd avoid using VWO in a taxable account because VWO has a higher percentage of non-qualified dividends compared to a developed markets or total international stock fund.
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tjstokes97
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Re: Is this a good international fund?

Post by tjstokes97 »

No, no ticker symbol. All our funds say at the top that they are not a mutual fund. They may be CIT's actually?

I'm trying to post the images but unfortunately imgur isn't cooperating and I can't post them directly to the message board it seems
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tjstokes97
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Re: Is this a good international fund?

Post by tjstokes97 »

Rocinante Rider wrote: Mon Jul 08, 2024 9:11 am It looks like the State Street offering tracks the MSCI World ex-USA Index, which is a large and mid cap developed market international index comprised of 22 developed market countries, not including the US. Thus, it won't cover emerging market nations, but if it were me, I'd go with the low cost State Street index fund and stay away from a higher cost actively managed fund. A 0.0268% ER is great.

If your 401k doesn't offer an emerging markets index fund and you want to add one, you could consider doing so in an IRA or other tax-deferred account. Vanguard's VWO would fit the bill. If possible, I'd avoid using VWO in a taxable account because VWO has a higher percentage of non-qualified dividends compared to a developed markets or total international stock fund.
Got ya that all makes sense. My concern was largely because I was unfam with State Street. I know American Funds are scammy, Vanguard is good and Fidelity is also good if you pick the right funds out of the pile. But I hadn't encountered State Street before.

Sounds like it's a legit low cost index fund and I just should add some of that VWO in the IRA to cover the globe better.

I appreciate everyone's input, glad to see it's a solid fund offering.
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retired@50
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Re: Is this a good international fund?

Post by retired@50 »

tjstokes97 wrote: Mon Jul 08, 2024 8:40 am
State Street World ex US Index Non-Lending Series Fund Class A Unitized
Expense ratio is .0268%
I would happily use the State Street fund above for international stock exposure.

Some things to look for in the fund literature and description...
The word "Index" Check, it's in the title.
The list of countries where the fund invests.
The number of holdings, should be in the thousands.
The expense ratio, which is low. Check.

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
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Re: Is this a good international fund?

Post by Rocinante Rider »

tjstokes97 wrote: Mon Jul 08, 2024 9:17 am My concern was largely because I was unfam with State Street.
State Street is a Fortune 500 company in banking and financial services. Among other services, they are one of the world's largest ETF providers, including the SPDR funds that State Street created. I wouldn't worry at all about investing in one of their offerings.
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Re: Is this a good international fund?

Post by Rocinante Rider »

retired@50 wrote: Mon Jul 08, 2024 9:21 am The number of holdings, should be in the thousands.
The MSCI World ex USA Index, which the fund tracks, shows only 829 holdings. I assume that this index has a lot fewer than "thousands" of holdings because it's limited to large and mid cap only and just 22 developed nations. In the absence of a broader international index offering in the 401k, this fund still seems like a good enough alternative to provide some international diversification. And definitely better, in my mind, than a high-fee actively managed alternative.
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ruralavalon
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Re: Is this a good international fund?

Post by ruralavalon »

Both are good choices . I prefer a good index fund over a good actively managed fund.

So I also suggest using "State Street World ex US Index Non-Lending Series Fund Class A Unitized, Expense ratio is .0268%".

The expense ratio is very low. It's a diversified index fund covering developed markets link. State Street is the 4th largest asset manager in the entire world link, and offers many good index funds.
Last edited by ruralavalon on Mon Jul 08, 2024 9:53 am, edited 2 times in total.
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upstatenick
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Re: Is this a good international fund?

Post by upstatenick »

ACWI ex-US tracks both developed and emerging markets. It has about 2,000 holdings and is not limited to just mid and large cap.
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Re: Is this a good international fund?

Post by Rocinante Rider »

upstatenick wrote: Mon Jul 08, 2024 9:47 am ACWI ex-US tracks both developed and emerging markets. It has about 2,000 holdings and is not limited to just mid and large cap.
But apparently not offered in OP's 401k menu.
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retired@50
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Re: Is this a good international fund?

Post by retired@50 »

Rocinante Rider wrote: Mon Jul 08, 2024 9:34 am
retired@50 wrote: Mon Jul 08, 2024 9:21 am The number of holdings, should be in the thousands.
The MSCI World ex USA Index, which the fund tracks, shows only 829 holdings. I assume that this index has a lot fewer than "thousands" of holdings because it's limited to large and mid cap only and just 22 developed nations. In the absence of a broader international index offering in the 401k, this fund still seems like a good enough alternative to provide some international diversification. And definitely better, in my mind, than a high-fee actively managed alternative.
829 is close enough for government work. I'd still use the State Street fund without hesitation.

Regards,
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Re: Is this a good international fund?

Post by muffins14 »

Rocinante Rider wrote: Mon Jul 08, 2024 9:34 am
retired@50 wrote: Mon Jul 08, 2024 9:21 am The number of holdings, should be in the thousands.
The MSCI World ex USA Index, which the fund tracks, shows only 829 holdings.
Where did you check that the fund tracks that index?
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Rocinante Rider
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Re: Is this a good international fund?

Post by Rocinante Rider »

muffins14 wrote: Mon Jul 08, 2024 10:09 am
Rocinante Rider wrote: Mon Jul 08, 2024 9:34 am
retired@50 wrote: Mon Jul 08, 2024 9:21 am The number of holdings, should be in the thousands.
The MSCI World ex USA Index, which the fund tracks, shows only 829 holdings.
Where did you check that the fund tracks that index?
https://markets.businessinsider.com/fun ... 85744l2951
muffins14
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Re: Is this a good international fund?

Post by muffins14 »

Rocinante Rider wrote: Mon Jul 08, 2024 10:18 am
muffins14 wrote: Mon Jul 08, 2024 10:09 am
Rocinante Rider wrote: Mon Jul 08, 2024 9:34 am
retired@50 wrote: Mon Jul 08, 2024 9:21 am The number of holdings, should be in the thousands.
The MSCI World ex USA Index, which the fund tracks, shows only 829 holdings.
Where did you check that the fund tracks that index?
https://markets.businessinsider.com/fun ... 85744l2951
Gotcha. I wasn’t sure if benchmark definitely meant “is intended to track” vs “is something to compare to”
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telemark
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Re: Is this a good international fund?

Post by telemark »

This appears to be a Collective Investment Trust. See the wiki at

https://www.bogleheads.org/wiki/Collect ... ent_Trusts

Given the expense ratio and the index it tracks I wouldn't hesitate to invest in it. There are two things to be aware of: as a CIT, it doesn't have a ticker (since it doesn't trade on the open market), and dividends are automatically reinvested in the trust (since there is no way to distribute them). You won't see dividends reported, but you get the same return anyway.
upstatenick
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Re: Is this a good international fund?

Post by upstatenick »

Rocinante Rider wrote: Mon Jul 08, 2024 10:18 am
muffins14 wrote: Mon Jul 08, 2024 10:09 am
Rocinante Rider wrote: Mon Jul 08, 2024 9:34 am
retired@50 wrote: Mon Jul 08, 2024 9:21 am The number of holdings, should be in the thousands.
The MSCI World ex USA Index, which the fund tracks, shows only 829 holdings.
Where did you check that the fund tracks that index?
https://markets.businessinsider.com/fun ... 85744l2951
That’s not consistent with MSCI’s definition of ACWI ex-US; SSGA’s fact sheet reports a broader universe of stocks. See: https://www.ssga.com/us/en/institutiona ... ss-k-ssglx

It looks like business insider has inaccurate information; they are describing an EAFE index fund.
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Re: Is this a good international fund?

Post by Rocinante Rider »

upstatenick wrote: Mon Jul 08, 2024 11:58 am
Rocinante Rider wrote: Mon Jul 08, 2024 10:18 am
muffins14 wrote: Mon Jul 08, 2024 10:09 am
Rocinante Rider wrote: Mon Jul 08, 2024 9:34 am
retired@50 wrote: Mon Jul 08, 2024 9:21 am The number of holdings, should be in the thousands.
The MSCI World ex USA Index, which the fund tracks, shows only 829 holdings.
Where did you check that the fund tracks that index?
https://markets.businessinsider.com/fun ... 85744l2951
That’s not consistent with MSCI’s definition of ACWI ex-US; SSGA’s fact sheet reports a broader universe of stocks. See: https://www.ssga.com/us/en/institutiona ... ss-k-ssglx

It looks like business insider has inaccurate information; they are describing an EAFE index fund.
MSCI World ex USA Index is different from ACWI ex-US Index. They both include large and mid-cap in 22 developed nations other than the US, but only the latter also includes 24 Emerging Market countries. The fund available to the OP is MSCI World, which does not have emerging markets.
https://www.msci.com/documents/10199/99 ... a3ffe9b1ab
https://www.msci.com/documents/10199/86 ... 29ed5adbbf
the_wiki
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Re: Is this a good international fund?

Post by the_wiki »

The short answer is - Yes it's a good international fund with a very low expense ratio from a good fund manager.

Always leave it to the internet to complicate an easy answer :oops: :mrgreen:
upstatenick
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Re: Is this a good international fund?

Post by upstatenick »

Rocinante Rider wrote: Mon Jul 08, 2024 12:25 pm
upstatenick wrote: Mon Jul 08, 2024 11:58 am
Rocinante Rider wrote: Mon Jul 08, 2024 10:18 am
muffins14 wrote: Mon Jul 08, 2024 10:09 am
Rocinante Rider wrote: Mon Jul 08, 2024 9:34 am

The MSCI World ex USA Index, which the fund tracks, shows only 829 holdings.
Where did you check that the fund tracks that index?
https://markets.businessinsider.com/fun ... 85744l2951
That’s not consistent with MSCI’s definition of ACWI ex-US; SSGA’s fact sheet reports a broader universe of stocks. See: https://www.ssga.com/us/en/institutiona ... ss-k-ssglx

It looks like business insider has inaccurate information; they are describing an EAFE index fund.
MSCI World ex USA Index is different from ACWI ex-US Index. They both include large and mid-cap in 22 developed nations other than the US, but only the latter also includes 24 Emerging Market countries. The fund available to the OP is MSCI World, which does not have emerging markets.
https://www.msci.com/documents/10199/99 ... a3ffe9b1ab
https://www.msci.com/documents/10199/86 ... 29ed5adbbf
Apologies. You're correct. I haven't run across anyone using this index before.
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tjstokes97
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Re: Is this a good international fund?

Post by tjstokes97 »

Rocinante Rider wrote: Mon Jul 08, 2024 12:25 pm
upstatenick wrote: Mon Jul 08, 2024 11:58 am
Rocinante Rider wrote: Mon Jul 08, 2024 10:18 am
muffins14 wrote: Mon Jul 08, 2024 10:09 am
Rocinante Rider wrote: Mon Jul 08, 2024 9:34 am

The MSCI World ex USA Index, which the fund tracks, shows only 829 holdings.
Where did you check that the fund tracks that index?
https://markets.businessinsider.com/fun ... 85744l2951
That’s not consistent with MSCI’s definition of ACWI ex-US; SSGA’s fact sheet reports a broader universe of stocks. See: https://www.ssga.com/us/en/institutiona ... ss-k-ssglx

It looks like business insider has inaccurate information; they are describing an EAFE index fund.
MSCI World ex USA Index is different from ACWI ex-US Index. They both include large and mid-cap in 22 developed nations other than the US, but only the latter also includes 24 Emerging Market countries. The fund available to the OP is MSCI World, which does not have emerging markets.
https://www.msci.com/documents/10199/99 ... a3ffe9b1ab
https://www.msci.com/documents/10199/86 ... 29ed5adbbf
As a note on the emerging market item. I completely missed that this fund has a "sister fund" that is for those markets. It was buried at the bottom of the list so I can combine that with the fund I mentioned above to approximate an international total market fund. My understanding is 10-15% of my international should be in that emerging markets bucket.
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tjstokes97
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Re: Is this a good international fund?

Post by tjstokes97 »

the_wiki wrote: Mon Jul 08, 2024 12:54 pm The short answer is - Yes it's a good international fund with a very low expense ratio from a good fund manager.

Always leave it to the internet to complicate an easy answer :oops: :mrgreen:

Thanks for the simple explanation! I appreciate it. I appreciate everyone's help here, I love visiting Bogleheads. Y'all are always so helpful and polite. Rare for the Internet.
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Re: Is this a good international fund?

Post by Rocinante Rider »

tjstokes97 wrote: Mon Jul 08, 2024 1:04 pm My understanding is 10-15% of my international should be in that emerging markets bucket.
According to Vanguard's Portfolio Watch tool, Emerging Markets constitute 25.38% of stock markets outside the US. In an effort not to add to the internet's tendency to overly complicate what should be easy answers, I'd say that putting anything between 25.37 - 25.39% of your international into Emerging Markets should be fine. :wink:

Seriously though, 10-15%, or whatever you like, is just fine. Some folks completely avoid Emerging Markets because of potentially greater risks and others overweight because of potentially greater rewards. There's no right or wrong answer except through the retrospectoscope. Asset allocation is about "good enough," and then staying the course.
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Re: Is this a good international fund?

Post by the_wiki »

https://www.ssga.com/library-content/pr ... -ssghx.pdf

If this retail fund is close to the CIT version, it definitely covers emerging markets:

https://www.ssga.com/library-content/pr ... -ssghx.pdf

Has 5% in Taiwan and 6.25% in China, just like IXUS.
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Re: Is this a good international fund?

Post by Mr. Potter »

Curious, most international index funds have a 3+ % on dividends. Do the dividends get added to your account or does the fund keep them? My 401k at John Hancock has a S&P 500 with a .02er which is great. My issue is they keep the dividends, this fund has no ticker symbol either.
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Re: Is this a good international fund?

Post by ruralavalon »

Mr. Potter wrote: Tue Jul 09, 2024 6:03 am Curious, most international index funds have a 3+ % on dividends. Do the dividends get added to your account or does the fund keep them? My 401k at John Hancock has a S&P 500 with a .02er which is great. My issue is they keep the dividends, this fund has no ticker symbol either.
In a Collective Investment Trust the dividends are automatically reinvested for you, and not paid out to share holders.

"Dividend reinvestment. A CIT does not make dividend distributions. Dividends are added and accumulate in the net asset value of a CIT share." link

A Collective Investment Trust has no ticker because shares cannot be traded on an exchange, they can only be held in a qualifying plan like a 401k, governmental 403b, governmental 457b, some pension and profit sharing plans.
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