What is the international portion of your portfolio and why?

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fourwedge
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What is the international portion of your portfolio and why?

Post by fourwedge » Sat Jan 10, 2015 2:46 am

Here's mine!

International makes up 30% of my total portfolio.

I hold:
VTIAX Vanguard Total int adm 14%
DFCEX DFA emerging markets core equity 6%
DISVX DFA international small cap value 6%
VFSVX Vanguard all wld ex us small cap 4%

I have access to the top 3 in my 401k without manager fees and contribute max every 2 weeks. What do you think of my portfolio make up? Should I ditch the VFSVX and put it in one of the others as it receives no current contributions? They are all in tax free or tax deferred accts.

Should I contribute to all 4?

What do you use instead and why? Do you just go as cheap as possible?

If you don't have international, please let us know why?
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bargainhuntingking
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Re: What is the international portion of your portfolio and

Post by bargainhuntingking » Sat Jan 10, 2015 4:05 am

I have 30-40% of my equity allocation to international.

I tilt total international equity with 2x market cap of emerging markets and 2x international small cap.

Why? Well, I wanted these tilts and felt that if I'm tilting, I wanted a noticeable tilt, not just a few unnoticeable percentage points. Also, tilting 2x is easy math. Also, I when I back tested (on Portfolio Visualizer) the sectors that I had consider tilting, I liked what I saw. ;)

I also tilt my domestic equity toward REITS (5x market cap) and Small Cap Value (5x market cap).

I guess it's a kind of a modified Swedroe portfolio, as my bonds are tilted toward treasuries (but diversified with Munis, International Bonds, Total Bond, and TIPS).

I do like simplicity too, so if maintaining these tilts becomes a pain, I may just switch to a simple 3-5 fund portfolio. I'm not tempted to sell low during cyclical underperformance, as the 2008-2009 drop was a good test of my mettle.
Last edited by bargainhuntingking on Sat Jan 10, 2015 5:28 am, edited 1 time in total.

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avenger
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Re: What is the international portion of your portfolio and

Post by avenger » Sat Jan 10, 2015 4:30 am

I put 30% of my equities in VTIAX. For simplicity's sake, I don't tilt within international (or within any other market either).
cheers ... -Mark | "Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau | [3 fund portfolio: VTI, VXUS, SV fund (yield 3.01%)]

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stemikger
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Re: What is the international portion of your portfolio and

Post by stemikger » Sat Jan 10, 2015 4:43 am

0% - I am happy with whatever international diversification I get through my two fund portfolio which is 70% Vanguard Institutional Index Fund and 30% Black Rock U.S. Debt Index.
Last edited by stemikger on Sat Jan 10, 2015 7:35 am, edited 1 time in total.
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Re: What is the international portion of your portfolio and

Post by red5 » Sat Jan 10, 2015 4:58 am

Well DISVX is about 60% medium and 40% small and micro according to Morningstar.com.
VFSVX has about 2% large, 58% medium and 40% small/micro according to Morningstar.com.
It looks like DISVX has a bit more of a value tilt. They also differ a bit of the physical locations of the companies included.

So, I say those two funds are similar enough that you need not have both. Just my opinion.

I use the etf version of DISVX and a vanguard etf for emerging markets for my international tilts. I use the Vanguard Total International for my main international fund.

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Re: What is the international portion of your portfolio and

Post by selftalk » Sat Jan 10, 2015 6:09 am

My international allocation consists of SCZ and EWX and some VWO. They have been good long term asset classes. I put my wife in only VXUS for international.

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Re: What is the international portion of your portfolio and

Post by Quickfoot » Sat Jan 10, 2015 6:14 am

30% of equity and fixed income, picked because it gives me sufficient diversification and is an easy number to calculate and explain to my spouse. We hold Total International and do not tilt in our international holdings.

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Re: What is the international portion of your portfolio and

Post by YDNAL » Sat Jan 10, 2015 6:36 am

fourwedge wrote:What is the international portion of your portfolio and why?
2011, 2013 and 2014, especially, were *relatively* unkind to our friends overseas.

Code: Select all

Year	Total Int.	Total U.S.
2010	   11.12%	17.09%
2011	  -14.56%	 0.96%
2012	   18.14%	16.25%
2013	   15.04%	33.35%
2014	   -4.24%	12.43%
Those are Vanguard funds.
My International allocation was 1/3 of stocks. It is now 1/4 of stocks since Domestic stocks have outperformed and I didn't rebalance. As I get older and spend US$ from my portfolio, my International allocation shall remain 1/4 of stocks with the only goal being one of global diversification. There are other points of view and change in portfolio strategy.
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backpacker
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Re: What is the international portion of your portfolio and

Post by backpacker » Sat Jan 10, 2015 7:05 am

1) One year returns are noise. Ignore them. Likewise for five, ten, and fifteen year returns.

2) A bit of perspective. Over the last 50 years, US stocks returned 5.8% a year and international stocks returned 5.6%. European stocks returned 6.2%. These returns are all basically the same (See the 2014 Credit Suisse Yearbook).

3) Which countries had the best returns? Sweden (8.5%) and Finland (7.9%).

4) Some countries had really bad returns. The US was lucky to not be one of them. Japan, Portugal, Spain, Italy, and Austria had returns ranging from .6% to 4.5%. I invest globally because the US could be on the list of dismal performers in the future.

5) My domestic/international split is 50/50. My international is 60/30/10 in PXF/PXH/VSS.

6) The funds you have are great. Does your plan have any international large value funds? You could consider adding those for diversification.

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Re: What is the international portion of your portfolio and

Post by packet » Sat Jan 10, 2015 7:25 am

Vanguard Total International (VTIAX), 25% of equities.

Why?
I know enough to know that I don't know enough to do otherwise.

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Re: What is the international portion of your portfolio and

Post by Bracket » Sat Jan 10, 2015 7:29 am

I hold multiple international funds based on what's available in my multiple accounts, and I'm about to tax loss harvest and thereby add two new international funds, at least temporarily. (VTIAX, VSS, I Fund, VWO, VFWIX, SCZ)

But the result of all this is fairly simple: 30% of equities in international, with 20% of my international in small caps. I hold the market weight in EM.

As to why, 30% seems reasonable based on my reading and that Vanguard paper that is commonly cited. There are of course other opinions. I tilt small, but in a small way, perhaps not enough to make a difference. I have not been convinced that tilting towards EM is something I should do.

If I truly had the option I would just hold a total int'l fund and a small cap int'l fund (VTIAX + VSS) and leave it at that. I am in fact gradually replacing the I Fund (EAFE index) with the total int'l fund (VTIAX) but I still have a ways to go.

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Re: What is the international portion of your portfolio and

Post by HongKonger » Sat Jan 10, 2015 8:20 am

Roughly 20% US equities (VTI, SLYV, MGK), 40% HKG equities (HSI Tracker), REITS (823.hk, 778.hk) fixed income (2819.hk) and cash, 40% RoW equities (VEA, SCZ) and fixed income.

Why - I bank through HKG, live and spend in Europe, and recognise I should have some US.

I don't think in terms of domestic and international, the world is just the world.
Last edited by HongKonger on Sat Jan 10, 2015 8:24 am, edited 1 time in total.

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Re: What is the international portion of your portfolio and

Post by midareff » Sat Jan 10, 2015 8:21 am

Of the 46% of my portfolio which is equities, 35% of those equities are international. VTIAX and VSS make up equal the larger components but I pick up some additional from Health Care Funds which also run about 1/3 of holdings as international.

The first "why" is diversification, although markets do have correlation. The second "why", and maybe the third are because the international markets have more attractive valuations presently and the funds pay a higher dividend (retired and taking the dividends). The fourth would be that much (book) material by some of our experts indicate the efficient frontier mix is in the 30-40% range. A fifth (I guess) is with the Shiller @ 26.85 to 27.00 I don't have much of an urge for a huge home country bias. Need, ability and willingness to take risk thing.

Hope it helps.

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Re: What is the international portion of your portfolio and

Post by livesoft » Sat Jan 10, 2015 8:27 am

The bulk of my international holdings are in 3 funds:

FSGDX - total int'l that is available in my 401(k) plan
VEU - FTSE ex-US large, because 5 years ago it existed when I needed to tax-loss harvest VEA. Plus at time, the Vanguard Total Int'l did not exist in its current form.
VSS - FTSE ex-US small, because 5 years ago it was introduced when I needed to tax-loss harvest my DLS and GWX small-cap foreign ETFs.

In addition to the above, I own DGS and EWX to add some things that never seem to go up. These are small-cap emerging markets ETFs.
Last edited by livesoft on Sun Jan 11, 2015 7:52 am, edited 1 time in total.
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Trev H
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Re: What is the international portion of your portfolio and

Post by Trev H » Sat Jan 10, 2015 8:51 am

50% of Equity is in International

My equity allocation goal is to be half US, Half International, Half Large, Half Small, Half Value, Half Market.

Vanguard Rollover IRA is setup

50% International Value, 50% FTSE X-US Small Cap

My company plan at work...

I am using a 50/50 split between a International Large Market and International Small Market there (no value options available). Just doing the best I can there towards my goals.

Why ? I am looking for Global 3 Factor Diversification and simplicity.

Trev H

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Re: What is the international portion of your portfolio and

Post by Aptenodytes » Sat Jan 10, 2015 8:57 am

I target two funds and tolerate a third. I target vanguard total international ex-us and vanguard small international ex-us. About evenly split. I tolerate vanguard international explorer because I can't get international small in my 403b and treat it as a proxy for that category. I load up on international small outside the 403b but still need more.

Oh I forgot a small bit of iShares total international ex-us (ACWI) in a Fidelity sep IRA. Just because it is commission free there.

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Re: What is the international portion of your portfolio and

Post by ERMD » Sat Jan 10, 2015 11:32 am

40% of equities in Vanguard FTSE All-Wld x-US.
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Re: What is the international portion of your portfolio and

Post by NoRoboGuy » Sat Jan 10, 2015 11:56 am

International is 40% of my equity allocation. Why? It improves equities diversification versus just domestic. Why 40%? It just seems like a good ratio (3/2 domestic/international) and makes sense to me.
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Re: What is the international portion of your portfolio and

Post by Dandy » Sat Jan 10, 2015 1:26 pm

I have about 10% of my portfolio in international equities. Since my overall equity allocation is currently 42% it is slightly less than 25% of my equities. That is a pretty low allocation to international equities.

Being retired I want to have moderate risk and international equities are a bit more risky. Also, with all the US regulations, accounting rules etc we still have some issues on occasion with companies fudging their data or outfight fraud. Who can really say how other countries less experienced with regulating and controlling equity markets are doing. Are they investigating insider trading? etc. So, I use a small allocation for some diversity but I'm not going all in on a global allocation model.

By the way stating international holding as a percentage of your total holdings makes sense to me. It gives a much clearer picture of the equity risk you are taking.

A 50% international allocation of your equities when your total equity allocation is 20% of your portfolio is a lot different than if your total equity allocation was 80% of your portfolio.

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Re: What is the international portion of your portfolio and

Post by stan1 » Sat Jan 10, 2015 1:39 pm

International is 1/3 of equities, which is then further split 2/3 TISM and 1/3 international small (VSS in taxable, VINEX in IRA).

Why 1/3 international and 2/3 U.S.? Global weighting carries more currency risk than I want since I'll always be living in the U.S. A 100% domestic allocation that assumes Ford, Bank of America, Exxon, and Apple will do better than Toyota, HSBC, Royal Dutch Shell, and Samsung seems undiversified and irrationally xenophobic. Therefore I arbitrarily chose something in the middle. I do not overweight Emerging Markets since I think for the most part the large EM multinationals (Brazil, India, and China) have caught up with Developed counterparts. Frontier markets are a curiosity; I may pull the trigger in 2015 if I can find an ETF that covers the right countries at a low enough cost.

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Re: What is the international portion of your portfolio and

Post by Ketawa » Sat Jan 10, 2015 1:46 pm

My portfolio is 80% equities/20% fixed income. I hold market weights in international, so it is about 48% of my equities. My specific holdings within international are approximately:

22% AQR Emerging Core Equity Fund (QEELX)
25% AQR International Core Equity Fund (QICLX)
19% PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio (PDN)
34% TSP I Fund

I have some VSS and VWO hanging around. I am planning to consolidate to QEELX, QICLX, and the I Fund next month.

Why market weights? Lots of threads about it.

Why these holdings? I buy into factor investing and want exposure to value, momentum, and profitability.

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Re: What is the international portion of your portfolio and

Post by icefr » Sat Jan 10, 2015 4:31 pm

International is targeted for 50% of my equities allocation; the other 50% allocated to US. Why? I live in the US and don't necessarily plan to retire in the US and am open to currency risk. All of my international is in the Vanguard Total International Stock Market Index Fund (Admiral or Institutional shares). I don't see much of a reason to tilt to emerging markets or anything. Plus, 50/50 is very simple to rebalance for.

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Re: What is the international portion of your portfolio and

Post by gkaplan » Sat Jan 10, 2015 5:55 pm

My target international (equities, only) is sixty percent of equities, thirty-six percent overall in a 60/40 equity/fixed income portfolio. My specific target international allocation breakdown is one-third large, one-third small, and one-third emerging market. My specific fund breakdown is as follows:

Vanguard European Stock Index Fund Admiral Shares: 6%
Vanguard Pacific Stock Index Fund Admiral Shares: 6%
Vanguard FTSE All-World ex-US Small-Cap Index Fund: 12%
Vanguard Emerging Markets Stock Index Fund Admiral Shares: 12%

I should note that the Vanguard FTSE All-World ex-US Small-Cap Index Fund, itself, consists of about fifteen percent emerging markets, I believe.

My reasons for my allocation are diversification, valuations and belief in reversion to mean, and agreement with what Larry has historically advocated and what now Rick seems to advocate. (I split my international large between Europe and Pacific regions for re-balancing purposes.)

(Edited once to change "belief" to "believe" in the second to last paragraph.)
Last edited by gkaplan on Sat Jan 10, 2015 6:58 pm, edited 1 time in total.
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ERMD
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Re: What is the international portion of your portfolio and

Post by ERMD » Sat Jan 10, 2015 6:15 pm

gkaplan wrote: should note that the Vanguard FTSE All-World ex-US Small-Cap Index Fund, itself, consists of about fifteen percent emerging markets, I belief.
15.08%.
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fortyofforty
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Re: What is the international portion of your portfolio and

Post by fortyofforty » Sat Jan 10, 2015 7:06 pm

30% international is my target. I am about to rebalance, as the weighting has dropped to about 25%, which was my threshold to prompt action on my part. Why 30%? Diversification. I feel like an idiot sometimes, when the U.S. stock market is roaring ahead and international markets are plummeting, but I am staying the course. I am hopeful that, by rebalancing now, I might be "buying low" and "selling high".
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Re: What is the international portion of your portfolio and

Post by pascalwager » Sat Jan 10, 2015 9:00 pm

I have the following int'l AA (% of equities) across five accounts:

VG TISM 19%
DFA ILV 18%
DFA ISC 12%
DFA EM 1%
Total int'l 50%

In your case, assuming you had plenty of US market, I would reduce/eliminate the VG TISM and VG ISC and use only the DFA ISCV and DFA EM. (The ISC risk premium is doubtful and TISM is closely correlated to the US market.)
Overall AA: 51/37/12 | Portfolio 1: total world stock market, short-term TIPS | Portfolio 2: global large value, global small cap, ultra short-term global bonds | Cash: Treasury money market

J295
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Re: What is the international portion of your portfolio and

Post by J295 » Sat Jan 10, 2015 9:03 pm

International is 1/3 of the total equity allocation.

ny_rn
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Re: What is the international portion of your portfolio and

Post by ny_rn » Sat Jan 10, 2015 9:07 pm

0% as of now.

I will soon add Vanguard Total International Stock Index Fund (VGTSX) to my taxable account. The percentage is yet to be determined. I value simplicity.

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Re: What is the international portion of your portfolio and

Post by lack_ey » Sat Jan 10, 2015 9:14 pm

Currently 45-50% of equities, with 80/20 equities/bonds. I'm a believer in the geographical diversification against human capital argument, being under 30, more so than the market cap weighting.

Within that, about 60% developed, 30% emerging, 10% REITs (using the Vanguard index fund ETFs). The REITs probably aren't moving the needle, really, but that does have a mid-high EM tilt. It's pretty much missing Canada and small caps, yeah.

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Re: What is the international portion of your portfolio and

Post by Regal 56 » Sat Jan 10, 2015 9:53 pm

60% domestic
40% international

Probably could go lower on international, since domestic companies do so much business overseas. And there may be some recency bias in my allocation—it wasn’t long ago that foreign stocks were going gangbusters. Of course, last year was bad for foreign stocks. But it is what it is. Seems silly to lower my allocation to international now, as currently that’s where the better valuations apparently are. Then again, Europe once more seems to be circling the drain. Indecision is an awful thing. Or maybe it isn’t.

Oh what the hell. In for a penny, in for a £. I’ll sit tight.

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Re: What is the international portion of your portfolio and

Post by Random Musings » Sat Jan 10, 2015 11:05 pm

40% of my equity holdings as per my ISP. Staying the course.

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Re: What is the international portion of your portfolio and

Post by mickens16 » Sat Jan 10, 2015 11:22 pm

I hold at the moment 45% of my equities in international. Usually I want to be 50/50 US/International but haven't rebalanced yet. I will be using all of my Roth contributions this year for international. The funds/ETF's I hold:

TSP I fund
Vanguard: VSS, PXH, PDN
Schwab: FNDC/FNDE

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Re: What is the international portion of your portfolio and

Post by Tonen » Sun Jan 11, 2015 1:44 am

50%
Naive diversification

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Re: What is the international portion of your portfolio and

Post by oldzey » Sun Jan 11, 2015 2:54 am

stemikger wrote:0% - I am happy with whatever international diversification I get through my two fund portfolio which is 70% Vanguard Institutional Index Fund and 30% Black Rock U.S. Debt Index.
+1

0% - why?

I follow Mr. Bogle's example of "I don't happen to use international":
“I think, I guess, I'd say overall internationally – I don't happen to use international because I think the market is going to be an equalizer. And international and emerging markets will probably do more or less the same as the U.S. in the next 10 years. You don't know that, but if I were to put 20% in international, call half in developed markets and half in emerging markets, maybe I could add a percentage point if I did it for 20% of my portfolio. If they do 5% better, I am getting 1% of an extra return. Well, I think, if you could just get out of your high-cost funds and into low-cost funds, you can pick up that 1 percentage point in a far easier way. So I could easily be wrong on that, but I think there are risks out there, unseen risks, currency risks, sovereign risks, and then the kind of risks that we have in international.” – Jack Bogle
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Re: What is the international portion of your portfolio and

Post by basspond » Sun Jan 11, 2015 6:09 am

Technically less than 5%, actually don't know because invested in so many companies with global operations.

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Re: What is the international portion of your portfolio and

Post by cjking » Sun Jan 11, 2015 7:42 am

Regardless of where I lived in the world, my default equity allocation would be a world tracker, if I had no opinions about the values of different markets. I probably would construct the world-tracker manually from funds that between them cover the world, instead of using a single fund, as that would give a lower expense ratio.

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ERMD
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Re: What is the international portion of your portfolio and

Post by ERMD » Sun Jan 11, 2015 9:54 am

cjking wrote:Regardless of where I lived in the world, my default equity allocation would be a world tracker, if I had no opinions about the values of different markets. I probably would construct the world-tracker manually from funds that between them cover the world, instead of using a single fund, as that would give a lower expense ratio.
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Re: What is the international portion of your portfolio and

Post by texasdiver » Sun Jan 11, 2015 10:10 am

My equity vs fixed ratio is about 70/30
The domestic/international ratio is about 66/33 (or 2:1 ratio) all of which is held in Vanguard Total Int'l (VGTSX) either within target retirement funds or stand-alone.

Why? I don't have a really good scientific reason for why I have a 2:1 domestic vs international ratio. For lack of any better reason I'm basically just splitting the difference between having zero international and having 50% international which is I think closer to the actual world market cap. We are in a global economy and when one looks at the companies that actually make up the top of the international indexes they are the same familiar companies we see and use every day (Samsung, Toyota, BP, Nestle, etc.).

In effect, I see the value of holding international but I also understand the argument for having a domestic-tilt so I just arbitrarily split the difference right down the middle. I haven't really seen any other better arguments for how much international to own. This is similar to the ratio of domestic/international that Vanguard uses in its target date retirement funds so there's that. Presumably they have thought more about it and put more analysis into it than I have.

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fourwedge
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Re: What is the international portion of your portfolio and

Post by fourwedge » Mon Jan 12, 2015 3:34 am

Thanks for the replies so far. It is interesting to see how many people have between 20-40% international and how few who responded have no international equity like Mr Bogle.

any and all, Keep em coming!
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Re: What is the international portion of your portfolio and

Post by Day9 » Mon Jan 12, 2015 3:50 am

My equity is 2:1 Domestic:International.

My international equity is about equal parts Vanguard Total International, DFA Int'l Sm, DFA Int'l Value, DFA Int'l Targeted Val (a sm-mid val fund)
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Re: What is the international portion of your portfolio and

Post by fortyofforty » Mon Jan 12, 2015 6:59 am

fourwedge wrote:Thanks for the replies so far. It is interesting to see how many people have between 20-40% international and how few who responded have no international equity like Mr Bogle.

any and all, Keep em coming!
I am actually surprised that Jack Bogle doesn't have any international. I do realize he's got a lot more investable assets than me, and that he's older than me, but even so, it's puzzling.
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Re: What is the international portion of your portfolio and

Post by Wellfleet » Mon Jan 12, 2015 10:20 am

My IPS states that I will use Vanguard target retirement 2050 to guide AA.

My employer IRA offers Fidelity index funds so AA is 30% to FXIVX versus 26% with my benchmark.

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Re: What is the international portion of your portfolio and

Post by Bacchus01 » Mon Jan 12, 2015 10:43 am

My IPS states that we should have 80% in equities and 20% of equities in International, for a total of 16% of the portfolio. I'm at the bottom end of a 5% band at just 11% and will look to build it up after I get past the TLH timeline.

All of that international is in Vanguard Total International. I can't imagine why I'd hold another fund.

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Re: What is the international portion of your portfolio and

Post by Crow Hunter » Mon Jan 12, 2015 11:55 am

I am at 30% of equities in International all VTIAX right now. I have been TLH back and forth between VTIAX and the FTSE Ex US fund with VTIAX being my preferred fund.

My target is 30% but I am okay with it varying +10/-5%. I wrote my IPS at 30% and then decided that I wanted to be 40% earlier this year but I just couldn't stay the course at that percentage (thought about it WAY too much) and as the market drifted down I just TLH'd but didn't rebalance only added monthly purchases that has kept me right about 30% so that is where I will probably stay. I will buy some fairly significant purchases later in the year though.

Around May is my current plan so for those of you wanting to market time International, wait until then because every time I buy something, it goes down in value. :?

John Z
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Re: What is the international portion of your portfolio and

Post by John Z » Mon Jan 12, 2015 12:30 pm

Did portfolio x-ray for year end so figures are current and accurate:
Int'l is 9% of portfolio and 20% of equities with Total Int'l Index. Having a coffeehouse portfolio, and as others have said, I am happy with whatever international diversification I get through the Index 500 and Large Value Index. Approximately 35-45% of sales are international from these two indices.
John

dave_m_
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Re: What is the international portion of your portfolio and

Post by dave_m_ » Mon Jan 12, 2015 8:28 pm

Asset allocation is 70/30, and of the 70% approximately 35% is in Vanguard Total International Stock Index. That's not a hard 35%, anywhere between 30 and 40 is close enough. I picked 35 as the target because it was in the range suggested by others with more experience than myself and was also something I was comfortable with, and should be able to leave alone for a long time.

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Random Musings
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Re: What is the international portion of your portfolio and

Post by Random Musings » Mon Jan 12, 2015 9:26 pm

fortyofforty wrote:
fourwedge wrote:Thanks for the replies so far. It is interesting to see how many people have between 20-40% international and how few who responded have no international equity like Mr Bogle.

any and all, Keep em coming!
I am actually surprised that Jack Bogle doesn't have any international. I do realize he's got a lot more investable assets than me, and that he's older than me, but even so, it's puzzling.
Jack Bogle owns some active funds (Wellington, for example) that holds some foreign holdings. But, as a % of his equity holdings, I'm sure it is pretty low.

RM
I figure the odds be fifty-fifty I just might have something to say. FZ

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tainted-meat
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Re: What is the international portion of your portfolio and

Post by tainted-meat » Mon Jan 12, 2015 9:30 pm

Probably around 60%. It's been under-performing so I pump all new monies into it.

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Steadfast
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Re: What is the international portion of your portfolio and

Post by Steadfast » Mon Jan 12, 2015 10:36 pm

IPS target for ex-U.S. equity is 50% of equity because that is more or less what the global market reflects. IPS target is a 70/30 allocation of equity to FI.

Currently, across my and my wife's accounts, ex-U.S. equities account for only 18.5% of equity. This is a legacy issue as my wife's father managed her portfolio prior to our marriage, and didn't invest ex-U.S or in bonds. I'm migrating us, ever so slowly, to 50% ex-U.S. equity as tax-friendly opportunities present themselves, which is just about never, and with new money inflows.

As for tilting, I take 20% of market share that rightfully belongs to EAFE and put it to EM instead. That's a 3x tilt to EM because I believe demographics is destiny.

Good luck.
We don't see things as they are, we see things as we are.

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siamond
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Re: What is the international portion of your portfolio and

Post by siamond » Mon Jan 12, 2015 11:59 pm

I am 50/50 between US equities and International equities. Why? Hedging my bets, simple as that. I don't want to get caught by the US plateauing 20 years from now (will happen or not? when? don't know). I don't plan to follow market weights to the letter, even if it currently happens to match pretty well, will just stick to my simple rule.

Then I have:
- 60% for International Developed
- 25% for Emerging Markets
- 15% for International Small

Why? Int'l Developed and Emerging have next to no small-cap exposure, and I tend to believe in the small-cap premium (or at least small value). And I suspect that some emerging countries will truly soar 20+ years from now, and I wanted a solid tilt in this respect. Risk & reward...

PS. I also split my REITs 50/50. But I don't see the point of Int'l bonds and their high fees. And I actively rebalance towards my AA.

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