Where do you tilt your Total Int'l Fund?

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Ijim
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Where do you tilt your Total Int'l Fund?

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

I have read many posts on here about people that move off the 3 fund portfolio and tilt to US equities. There are some who also tilt their fixed income portfolio. But id like to learn from those who tilt their international index fund - where do you tilt and why? :beer

Mureke
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Re: Where do you tilt your Total Int'l Fund?

Post by Mureke » Sun Jan 11, 2015 5:58 am

I'm overweight Japan because of valuations. I established this tilt before I became convinced by the effiency of the world market portfolio, though.

I tilt somewhat to Europe because of low fund expenses, low currency risk, and good old-fashioned home bias (I'm European).

I'm 2X overweight in EM (incl. Korea & Taiwan). In terms of TER, this seems to be the cheapest way to assume more risk in my portfolio. I feel I can use the extra risk in a low-return world.

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Re: Where do you tilt your Total Int'l Fund?

Post by retiredjg » Sun Jan 11, 2015 8:20 am

I have a little extra international small cap - in case the small cap "premium" continues.

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Re: Where do you tilt your Total Int'l Fund?

Post by YDNAL » Sun Jan 11, 2015 8:32 am

Ijim wrote:I have read many posts on here about people that move off the 3 fund portfolio and tilt to US equities. There are some who also tilt their fixed income portfolio. But id like to learn from those who tilt their international index fund - where do you tilt and why? :beer
A couple of things:
  • 1. According to FTSE Global all cap index, current Global weights stand at:
    https://personal.vanguard.com/us/funds/ ... =INT#tab=2

    Code: Select all

       3.60%	Canada
       9.00%	Emerging Markets
      22.00%	Europe
      13.50%	Pacific
       0.20%	Middle East
      51.70%	U.S.
    2. An investor using Total International index fund is allocated per Global Region weights. Once you tilt from one Region -- at the expense of another -- you are saying that you know better than the Market.
"Tilting" is a bet, and nothing more.
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livesoft
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Re: Where do you tilt your Total Int'l Fund?

Post by livesoft » Sun Jan 11, 2015 8:44 am

I am betting that small-caps do better than large-caps, so I place my bets on VSS (small-cap total foreign) and DGS,EWX (small-cap emerging). I have more than half my international assets in small/mid-caps.
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Re: Where do you tilt your Total Int'l Fund?

Post by z3r0c00l » Sun Jan 11, 2015 8:52 am

Apparently I am 1.7% overweight international right now, just to keep it simple I aim for 50/50.

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iceport
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Re: Where do you tilt your Total Int'l Fund?

Post by iceport » Sun Jan 11, 2015 8:55 am

I tilt to foreign small caps and emerging markets, for a combination of the same three general reasons:

— they are less correlated with the US market than developed large caps
— they offer the potential for higher reward (at the cost of higher risk)
— without an overweight, they would comprise an insignificant percentage of the portfolio

Oh, and foreign real estate, for the first and third reasons...
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Re: Where do you tilt your Total Int'l Fund?

Post by dkturner » Sun Jan 11, 2015 9:01 am

About 1/3 of my international equity exposure is through the Vanguard Wellesley Income Fund, so I have a tilt towards large-cap European equities in my portfolio.

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Re: Where do you tilt your Total Int'l Fund?

Post by Bracket » Sun Jan 11, 2015 10:13 am

Another vote for small caps here. 20% of int'l via VSS.

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Re: Where do you tilt your Total Int'l Fund?

Post by ZumZabo » Sun Jan 11, 2015 10:39 am

I am

25% U. S. LC
25% U. S. SC
25% Non-U. S. LC
25 % Non-U. S. SC

This is the allocation based on the category of the funds.
All blend. I am kind of agnostic when it comes to value tilt. I have some value and some growth within the blend. I have a few more funds than I want on the domestic side due to some capital gains. It would be very expensive to make it as clean and simple as I would like. Definitely a small and mid-cap tilt. EM are market weight.

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14 15 14
11 11 12
8 8 7
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Re: Where do you tilt your Total Int'l Fund?

Post by KyleAAA » Sun Jan 11, 2015 10:48 am

I tilt international as follows:

37.5% Total International Index
37.5% FTSE All-World Ex US Small Cap Index
25% Emerging Market Index

Overall asset allocation is 40% domestic equities (50/50 split between total stock market and small-cap value), 40% international equities, 10% REITS, and 10% short-term bond index. You could say I'm a pretty aggressive investor.

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Re: Where do you tilt your Total Int'l Fund?

Post by Wagnerjb » Sun Jan 11, 2015 11:22 am

I hold about 20% of my international in Vanguard's Total International fund. I use a variety of other funds to tilt, giving me around 55% in value vs growth. Around 50% of my international is small caps. And Emerging Markets make up 30% of my international.

I use quite a few funds, mostly because of limited access to funds in certain portfolios. I inherited three DFA international small cap and EM funds (I sold the other DFA funds that did not fit for me). I use a DFA EM fund in one of my deferred compensation plans, and Vanguard EM fund in another deferred compensation plan. In my IRAs where I have greater flexibility, I use VSS, DGS and DLS.

I tilt because I believe these areas have higher risk and higher expected returns, and I am very comfortable with taking on more risk in my equity portfolio allocation.

Best wishes.
Andy

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Re: Where do you tilt your Total Int'l Fund?

Post by midareff » Sun Jan 11, 2015 11:26 am

I tilt to equal weight VSS (Int. Small).

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Re: Where do you tilt your Total Int'l Fund?

Post by ZumZabo » Sun Jan 11, 2015 11:28 am

KyleAAA wrote:I tilt international as follows:

37.5% Total International Index
37.5% FTSE All-World Ex US Small Cap Index
25% Emerging Market Index

Overall asset allocation is 40% domestic equities (50/50 split between total stock market and small-cap value), 40% international equities, 10% REITS, and 10% short-term bond index. You could say I'm a pretty aggressive investor.
Pretty aggressive but if you stay seated and keep your arms inside the roller coaster, I suspected you will be a happy guy 30 years from now. Assuming you have 30 years; I'm sensing you are not an old person.
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Re: Where do you tilt your Total Int'l Fund?

Post by zaboomafoozarg » Sun Jan 11, 2015 11:42 am

My international is 33% of equities, allocated as follows:

70% total Int'l market (VTIAX)
20% Int'l small cap (VSS)
10% Int'l REITs (VNQI)

No international bonds.

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Re: Where do you tilt your Total Int'l Fund?

Post by retiredjg » Sun Jan 11, 2015 11:55 am

KyleAAA wrote:37.5% Total International Index
37.5% FTSE All-World Ex US Small Cap Index
25% Emerging Market Index
Not sure I'd call this a "tilt". :happy

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Re: Where do you tilt your Total Int'l Fund?

Post by mickens16 » Sun Jan 11, 2015 12:12 pm

My International looks like this:

50% of my equities are in international

42% Large Cap (TSP I Fund)
30.5% Small Cap (VSS, PDN, FNDC)
26% Emerging Markets (PXH, FNDE)

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Ijim
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Re: Where do you tilt your Total Int'l Fund?

Post by Ijim » Sun Jan 11, 2015 3:54 pm

retiredjg wrote:I have a little extra international small cap - in case the small cap "premium" continues.
Has this premium shown up in both US and International markets?

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Re: Where do you tilt your Total Int'l Fund?

Post by lmpmd » Sun Jan 11, 2015 4:06 pm

Isn't this forum called the Bogleheads? John Bogle feels investing in international funds isn't needed and isn't worth the currency risk:
http://www.bloomberg.com/news/2014-12-0 ... -u-s-.html
http://www.morningstar.com/cover/videoc ... ?id=355647

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Re: Where do you tilt your Total Int'l Fund?

Post by retiredjg » Sun Jan 11, 2015 4:07 pm

Ijim wrote:
retiredjg wrote:I have a little extra international small cap - in case the small cap "premium" continues.
Has this premium shown up in both US and International markets?
That's a good question. I'm not sure if I just extrapolated the data or if any studies have shown the same for foreign markets. Maybe someone else will know.

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Ijim
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Re: Where do you tilt your Total Int'l Fund?

Post by Ijim » Sun Jan 11, 2015 4:51 pm

lmpmd wrote:Isn't this forum called the Bogleheads? John Bogle feels investing in international funds isn't needed and isn't worth the currency risk:
http://www.bloomberg.com/news/2014-12-0 ... -u-s-.html
http://www.morningstar.com/cover/videoc ... ?id=355647
But don't many bogleheads believe in the 3-fund portfolio?

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Re: Where do you tilt your Total Int'l Fund?

Post by livesoft » Sun Jan 11, 2015 4:56 pm

Ijim wrote:But don't many bogleheads believe in the 3-fund portfolio?
Sure, but one has to remember that one could not have 3-fund portfolio that covered the market weights of the world until relatively recently. After all, the Vanguard Total International Index fund did not exist in its current form until a few years ago.

And polls show that most folks who respond to polls using some kind of tilting and not a 3-fund portfolio. That is, 3-fund portfolio is a minority around here.

Finally, the books are not recommending 3-fund portfolios yet. Model portfolios in books are still dated with separate allocations to Europe, Asia/Pacific, and possibly Emerging countries plus a slug of REITs. Maybe 3-fund will never be in a paper book, but only show up in e-books?
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Re: Where do you tilt your Total Int'l Fund?

Post by grabiner » Sun Jan 11, 2015 6:04 pm

I overweight small-caps in both US and foreign stocks, and emerging markets in foreign stock. I would overweight value in foreign stocks as well, but the existing ETFs are too expensive; the difference between Vanguard Developed Markets and iShares EFV, plus the extra tax cost, is likely more than any risk-adjusted benefit I would get from the value tilt.

If cost were not an issue, I would split my international equally between developed large, emerging large, developed small, and emerging small. Actually, cost is an issue, as the developed and large-cap indexes are less expensive than the emerging and small-cap indexes, and emerging markets have more non-qualified dividends. Therefore, I hold 3/8 developed large, 1/4 developed small, 1/4 emerging large, 1/8 emerging small. (Some of my emerging small-cap is in VSS, Vanguard's international small-cap index; I use the iShares EEMS for the rest.)
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Ijim
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Re: Where do you tilt your Total Int'l Fund?

Post by Ijim » Sun Jan 11, 2015 6:35 pm

grabiner wrote:I overweight small-caps in both US and foreign stocks, and emerging markets in foreign stock. I would overweight value in foreign stocks as well, but the existing ETFs are too expensive; the difference between Vanguard Developed Markets and iShares EFV, plus the extra tax cost, is likely more than any risk-adjusted benefit I would get from the value tilt.

If cost were not an issue, I would split my international equally between developed large, emerging large, developed small, and emerging small. Actually, cost is an issue, as the developed and large-cap indexes are less expensive than the emerging and small-cap indexes, and emerging markets have more non-qualified dividends. Therefore, I hold 3/8 developed large, 1/4 developed small, 1/4 emerging large, 1/8 emerging small. (Some of my emerging small-cap is in VSS, Vanguard's international small-cap index; I use the iShares EEMS for the rest.)
This was a very detailed reply. Thank you.

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Re: Where do you tilt your Total Int'l Fund?

Post by camper » Sun Jan 11, 2015 7:12 pm

Int'l equites:
50% Total International stock index (VTIAX)
50% FTSE All world ex-us small index (VFSVX) also use DFISX-DFA International Small Cap

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Re: Where do you tilt your Total Int'l Fund?

Post by pascalwager » Sun Jan 11, 2015 8:51 pm

Postby livesoft » Sun Jan 11, 2015 4:56 pm
Ijim wrote:
But don't many bogleheads believe in the 3-fund portfolio?
Sure, but one has to remember that one could not have 3-fund portfolio that covered the market weights of the world until relatively recently. After all, the Vanguard Total International Index fund did not exist in its current form until a few years ago.

And polls show that most folks who respond to polls using some kind of tilting and not a 3-fund portfolio. That is, 3-fund portfolio is a minority around here.

Finally, the books are not recommending 3-fund portfolios yet. Model portfolios in books are still dated with separate allocations to Europe, Asia/Pacific, and possibly Emerging countries plus a slug of REITs. Maybe 3-fund will never be in a paper book, but only show up in e-books?
Dan Solin strongly promoted the three-fund portfolio in The Smartest Investment Book You'll Ever Read (2006) using Vanguard, Fidelity, or T. Rowe Price. This was the only portfolio included in the book. W. Bernstein also recommended this portfolio in his later books and so did Charles Ellis and Burton Malkiel in The Elements of Investing.

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Re: Where do you tilt your Total Int'l Fund?

Post by john94549 » Sun Jan 11, 2015 8:57 pm

Your standard 15% of equities in VTIAX with a smidge in emerging (VEMAX). One of these years, oh, well.

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Re: Where do you tilt your Total Int'l Fund?

Post by livesoft » Sun Jan 11, 2015 9:15 pm

pascalwager wrote:Dan Solin strongly promoted the three-fund portfolio in The Smartest Investment Book You'll Ever Read (2006) using Vanguard, Fidelity, or T. Rowe Price. This was the only portfolio included in the book. W. Bernstein also recommended this portfolio in his later books and so did Charles Ellis and Burton Malkiel in The Elements of Investing.
Yes, I see. At the time, VGTSX did not include small-caps. Nor did/does FSIIX from Fidelity. FSIIX does not include emerging markets. The TRowePrice recommended portfolio appears to have used PEXMX (extended market), so was missing US large-caps. I don't know about PIEQX.

But yes, Solin recommended 3-fund portfolios. Were they the 3-fund portfolio that is going around nowadays? Many would say, close enough.
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Re: Where do you tilt your Total Int'l Fund?

Post by dkturner » Mon Jan 12, 2015 11:50 am

Ijim wrote:
lmpmd wrote:Isn't this forum called the Bogleheads? John Bogle feels investing in international funds isn't needed and isn't worth the currency risk:
http://www.bloomberg.com/news/2014-12-0 ... -u-s-.html
http://www.morningstar.com/cover/videoc ... ?id=355647
But don't many bogleheads believe in the 3-fund portfolio?

It's a big church. The Bogleheads say, and do, all kinds of stuff that differs from the recommendations of The Man. In all fairness to the average Boglehead, The Man often does stuff which is the opposite of his on the record recommendations.

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Re: Where do you tilt your Total Int'l Fund?

Post by retiredjg » Mon Jan 12, 2015 12:12 pm

dkturner wrote:It's a big church. The Bogleheads say, and do, all kinds of stuff that differs from the recommendations of The Man. In all fairness to the average Boglehead, The Man often does stuff which is the opposite of his on the record recommendations.
It's so true. :happy

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Re: Where do you tilt your Total Int'l Fund?

Post by powermega » Mon Jan 12, 2015 12:25 pm

I tilt the TISM position with an emerging market ETF.
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Re: Where do you tilt your Total Int'l Fund?

Post by feh » Mon Jan 12, 2015 12:34 pm

I tilt to small cap, for the same reason I tilt US equities.

I'd like to tilt to SCV and not just SC, but there aren't many funds to choose from.

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Re: Where do you tilt your Total Int'l Fund?

Post by cinghiale » Mon Jan 12, 2015 12:43 pm

dkturner wrote:
About 1/3 of my international equity exposure is through the Vanguard Wellesley Income Fund, so I have a tilt towards large-cap European equities in my portfolio.
I don't get this. Wellesley's portfolio is 38% stocks, and of the 60 or so stocks it holds, perhaps 12-14 are foreign companies. None of the top 10 companies-- which constitute 36% of the equity holdings-- are foreign. If anything, holding Wellesley tilts you away from a foreign tilt.

Unless, of course, you are talking about Wellesley's impact solely on the international stock portion of your portfolio. But, even there, it would not be much of a tilt.

Am I missing something? (BTW, 10% of my portfolio is in Wellesley.)
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Re: Where do you tilt your Total Int'l Fund?

Post by ks289 » Mon Jan 12, 2015 1:56 pm

1/4 VFSVX
1/4 VTIAX
1/4 VTRIX
1/4 VEMAX

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Re: Where do you tilt your Total Int'l Fund?

Post by dkturner » Tue Jan 13, 2015 7:28 am

cinghiale wrote:dkturner wrote:
About 1/3 of my international equity exposure is through the Vanguard Wellesley Income Fund, so I have a tilt towards large-cap European equities in my portfolio.
I don't get this. Wellesley's portfolio is 38% stocks, and of the 60 or so stocks it holds, perhaps 12-14 are foreign companies. None of the top 10 companies-- which constitute 36% of the equity holdings-- are foreign. If anything, holding Wellesley tilts you away from a foreign tilt.

Unless, of course, you are talking about Wellesley's impact solely on the international stock portion of your portfolio. But, even there, it would not be much of a tilt.

Am I missing something? (BTW, 10% of my portfolio is in Wellesley.)
100% of 1/3 of my international holdings are in European (some Canadian there too I believe) stocks. 53% of 2/3 of my international holdings are in European/Canadian stocks. I believe my total foreign equity exposure is about 69% European/Canadian. Total International shows 53% European/Canadian, so that represents about a 30% tilt towards European/Canadian stocks among my total international exposure.
Last edited by dkturner on Tue Jan 13, 2015 10:09 am, edited 1 time in total.

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Re: Where do you tilt your Total Int'l Fund?

Post by Ketawa » Tue Jan 13, 2015 9:58 am

I tilt to value, momentum, and profitability through QEELX, QICLX, and PDN. I also have some I Fund.

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Re: Where do you tilt your Total Int'l Fund?

Post by rkhusky » Tue Jan 13, 2015 10:16 am

I shoot for 70/30 Dev/Emerg and 70/30 Large/Small.

According to Morningstar, VG's Total Int'l has about an 85/15 split for Dev/Emerg and an 80/20 split for Large/Small. (Morningstar considers Taiwan developed, VG has it in emerging)

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Re: Where do you tilt your Total Int'l Fund?

Post by Logan T » Tue Jan 13, 2015 12:49 pm

International is 40% of my stock portfolio. That 40% is broken down as follows:

15% VEU (All-World Ex-US)
15% VSS (All-World Ex-US Small-Cap)
10% VWO (Emerging Markets)
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Re: Where do you tilt your Total Int'l Fund?

Post by pascalwager » Wed Jan 14, 2015 2:37 am

I add the following tilts to TISM:

int'l large value: 95% of TISM
int'l small: 63% of TISM
EM: 5% of TISM

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Re: Where do you tilt your Total Int'l Fund?

Post by brad.clarkston » Wed Jan 14, 2015 9:53 am

About 15% of total port tilted small-cap (port is a 80/20 core4 + small cap tilt in both US/non-US)

10% VSS (All-World Ex-US Small-Cap)
5% VXUS (Total International Stock)

I am slowly rebalancing to a 20% international tilt at a 10%/10% margin in the above funds.

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Re: Where do you tilt your Total Int'l Fund?

Post by texasdiver » Wed Jan 14, 2015 11:47 am

First of all, International equities makes up about 22% of our total portfolio. Within that we have a small tilt towards emerging markets along the order of

95% - Vanguard Total International
5% -Vanguard Emerging markets.

I wouldn't have even bothered but my wife is from an emerging market country and it seemed the thing to do when I started her Roth.

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