With what seems to be all the recent posts about what an appropriate international AA should be I checked mine on morningstar via the X-ray option.
I note a few things and want to see if I am missing anything
1. the % international is based on your total portfolio not the % of equities which is a better way to calculate your international AA
2. you have to manually add up the emerging markets % to get your total em AA
3. North America, not the USA is a specific group so one would have to subtract out Canada to get a more accurate understanding of your non US holdings
Morningstar gave me a 14% foreign AA and I have 50% in equities. Upon further digging I have concluded my more accurate AA is
USA= 73%
International = 18%
EM= 9%
of my total equities.
I did not account for Canada being part of international. for example my Vanguard Energy about 30% international of which some would be in Canada.
I am not saying Morningstar is incorrect in what they are presenting but you need to take extra steps to have an total understanding of your actual international AA including emerging markets.
Any comments appreciated.
morningstar X-ray international AA could be better
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Re: morningstar X-ray international AA could be better
(US/F+1)^-1 = Fraction foreign eg: (36/13+1)^-1=0.2653 where 36 is US and 13 is Foreign (I can do that in my head, at least in the morning. )1) the % international is based on your total portfolio not the % of equities which is a better way to calculate your international AA
Alternatively think of Canada as the 51st state and use the world region screen.
On the world regions tab Europe Emerging + Asia Emerging = % emerging2) you have to manually add up the emerging markets % to get your total em AA
On the asset class tab US Stocks are US stocks. On the world region tab Canada and US are combined. Use whichever suits you better. (I prefer Canada to be lumped with US myself.)3. North America, not the USA is a specific group so one would have to subtract out Canada to get a more accurate understanding of your non US holdings
Upon further digging I have concluded my more accurate AA ...
Emerging is part of international. (If you want to know EM in international add E emerging and A emerging and divided by the answer in 1)
Canada is such a small part of the foreign funds that do include Canada that it can usually be ignored.I did not account for Canada being part of international.
Perhaps you are you not using Morningstar Premium?
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