What % of International should be in Emerging Markets?

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% Emerging Markets in International

<25%
46
39%
<25%
46
39%
25%-49%
22
19%
50%
3
3%
>75%
1
1%
 
Total votes: 118

Topic Author
test
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Joined: Tue Feb 27, 2007 7:11 pm

What % of International should be in Emerging Markets?

Post by test »

I remember Bogle saying something about 50%. Is that the general concensus?
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DaveTH
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Post by DaveTH »

I think your poll would be more meaningful if you had used tighter ranges and maxed out at 50% (can't image anyone having more).

Dave
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Kenster1
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Post by Kenster1 »

I agree that the poll would be more meaningful if there were tigher ranges.

I'm willing to bet that 90%+ here have less than 25% of their International portfolio in Emerging Markets.
mikenz
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Post by mikenz »

There is a bit of discussion here

EM is I believe 15% of the cap-weighted Int market. I think most people would have 20, 25 or maybe 33%, but few would have more.

I have a spreadsheet of about 10 popular lazy portfolios. They have an average of 27% EM. Aronson and a few others have 50%, several just have the total market (15%) and others have 33% Europe, 33% Japan/Pacific and 33% EM.
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tdhg566
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Post by tdhg566 »

I use Rick's 4x25 allocation for international developed markets. So it was an easy call to just take another equal slice for EM, meaning EM is 20% of my total international allocation
TheEternalVortex
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Post by TheEternalVortex »

I have the cab weighted (about 15%). Though EM has been doing well as of late, I think historically it hasn't outperformed the rest of international, so I don't see any reason to overweight it.
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JohnYaker
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Location: Fiji

Bogle?

Post by JohnYaker »

.
I'd be really, really, surprised if John C. Bogle recommended 50% of international to be in emerging markets stock. Here's what he wrote in his recent 'Little Book':

"Although foreign stocks account for about one-half of the world's market capitalization, I recommend that they account for no more than 20 percent of your own equity portfolio. By far the soundest way to acquire that participation is to hold (no surprise here!) a low-cost total international index fund that tracks the returns of all non-U.S. corporations. A modest holding in a low-cost emerging market index fund is also a reasonable approach, but be sure you understand the risks."

John
(one-third international in my equities - no over-weighting of emerging markets)
Topic Author
test
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Joined: Tue Feb 27, 2007 7:11 pm

Post by test »

I believe it was here Bogle said to put 50% into emerging markets.

He says investors might allocate up to 20% of their stock-market money to foreign shares, dividing this money equally between developed and emerging markets.

http://online.wsj.com/public/article/SB ... ?mod=blogs
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JohnYaker
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Location: Fiji

Good

Post by JohnYaker »

.
That quote appears to be inconsistent with his book. If accurate, he's certainly seems to be changing course!
:-)

John
norm
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Post by norm »

My international is divided between Total International & International Value putting EM at about 15.5%.
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jjkthunder
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Location: Green Bay, Wisconsin

Post by jjkthunder »

Out of the equity portion of my portfolio I have 50% each in Domestic and International.

Of the International, I have that split 25% each in European Index ETF (VGK), Pacific Rim Index ETF (VPL), Emerging Markets ETF (VWO) and International Value mutual fund (VTRIX).

GLI..................Jack
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fundtalker123
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Post by fundtalker123 »

I read an article that said that in terms of total investible market cap emerging markets are 8% and developed foreign markets 92%. Can anyone confirm those figures?
mptfan
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Post by mptfan »

John and test,

The way I read those two references from Mr. Bogle, they are NOT inconsistent. The first quote from the little book says to hold no more than 20 percent of equity (not of international equity) in foreign stocks. One can hold 20 percent of equity in international, of which 10 percent is in EM, which would make EM 50 percent of your INTERNATIONAL equity. This would make both statements consistent.

I recognize that in the little book quote he recommends a total international index fund as the best way to invest internationally, and I understand that would give EM a cap weighted distribution which is less than 50 percent of international, but he qualifies that by recommending a "modest" holding in an EM index fund, but he doesn't quantify what "modest" means. So, arguably, your "modest" holding of EM could be 10 percent of your TOTAL equity, which would then be 50 percent of your INTERNATIONAL equity.
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TnGuy
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Post by TnGuy »

EM = ~10% of my overall port, which is 50% Intl. - thereby making EM ~20% of my Intl. AA.


David
"Money will not make you happy. And happy will not make you money." - Groucho Marx
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