Who has the highest allocation to international stocks?

[KJVanguard]

Portfolio watch tells me that 55% of my equities are international (with an over-sized portion being emerging markets). I believe this is pretty close to cap weighting for the world, isn't it?

Vanguard wants to cap weight everything else, so I guess they can't be upset with a cap weight in foreign stock.

Anybody meet or exceed my 55%? Just curious. Given valuations, I think it's just common sense to favor foreign over US. No, international hasn't done well lately, though it seems you should favor that which has the best valuation at any given time. If US stocks were relatively cheaper, well, then I would favor US stocks.

[livesoft]

Not me. If you are a US investor, then you have a reason to be unhappy with 2018 and looking for companions in commiseration.

[bluquark]

Cap weight is actually 55% US, 45% ex-US. So you're moderately underweighting US.

My IPS is to hold everything at market weight and EM at double weight (actually fixed at 18% of equity to make me automatically double down on EM if it crashes and slowly get out if it increases), effectively the same strategy as yours. It puts me at almost exactly 50/50 at the moment, but I'll let it drift with market cap instead of keeping a pin to 50/50.

[Jefferson]

60/40 US/ex-US

[nisiprius]

...Vanguard wants to cap weight everything else, so I guess they can't be upset with a cap weight in foreign stock...

They cap-weight foreign stock themselves, in the Vanguard Total World Stock Index Fund, VTWSX and VT.

[Geographer]

Until recently we were 60/40 US/Int for our stock portion, but decided to set our target as 55/45 to represent cap weight because we were so close anyways, so why not? Ideally we'll exchange for the convenience of 100% VTWSX if Vanguard makes admiral shares, but until then we'll shoot for world cap weight in VTSAX/VTIAX.

[foosball]

FWIW, I'm at 65/35 US/Ex-US in equities. If international stocks drop significantly relative to US, I'd be tempted to go up to 40%.

[indexfunds]

I am 50/50 total US/total international stock index to keep things simple. No bonds yet.

[grabiner]

I am at 50% international stock, and have been at that weight for years.

Cap weight is actually 55% US, 45% ex-US. So you're moderately underweighting US.

My IPS is to hold everything at market weight and EM at double weight (actually fixed at 18% of equity to make me automatically double down on EM if it crashes and slowly get out if it increases), effectively the same strategy as yours. It puts me at almost exactly 50/50 at the moment, but I'll let it drift with market cap instead of keeping a pin to 50/50.

My logic is similar. EM is 3/8 of my foreign stock, which is 19% of my total stock portfolio. I overweight emerging markets because I expect a better diversification benefit from emerging markets than from developed markets.

EM would be half my international stock if the costs were equal, but they are not. Vanguard's emerging markets index is only 7 basis points more expensive than its developed markets index, but it has a higher tax cost because of fewer qualified dividends, and i hold it in my taxable account because my Roth IRA has things which are even less tax-efficent. And I don't hold a separate emerging small-cap fund at all; the ETFs are very expensive and have been tax-inefficient.

[cap'n crunch]

im gonna bet international turns it around slightly next couple years and bump my stake up to 20%... 75% domestic 20% international 5% physical gold and silver..
its where i feel comfortable at.

[TIAX]

Until recently we were 60/40 US/Int for our stock portion, but decided to set our target as 55/45 to represent cap weight because we were so close anyways, so why not? Ideally we'll exchange for the convenience of 100% VTWSX if Vanguard makes admiral shares, but until then we'll shoot for world cap weight in VTSAX/VTIAX.

The admiral shares should be available this month.

[KJVanguard]

...Vanguard wants to cap weight everything else, so I guess they can't be upset with a cap weight in foreign stock...

They cap-weight foreign stock themselves, in the Vanguard Total World Stock Index Fund, VTWSX and VT.

Thanks for pointing that out. I wasn't aware of that fund.

[KJVanguard]

Now who overweights small caps via VSS as I do? I figure that if small caps win, I will win, and if a small cap premium does not materialize, well, then I'm likely not to do much worse than large caps over the next few decades of my life.

I would go with small cap international value if Vanguard were to offer it. I do go for EM small cap value with DGS, where dividends are used as a proxy for value. Being retired, I actually like dividend income. Dividends also seem an an advantage in EM where accounting is more lax, but you can't fake cash dividends.

[fennewaldaj]

Now who overweights small caps via VSS as I do? I figure that if small caps win, I will win, and if a small cap premium does not materialize, well, then I'm likely not to do much worse than large caps over the next few decades of my life.

I would go with small cap international value if Vanguard were to offer it. I do go for EM small cap value with DGS, where dividends are used as a proxy for value. Being retired, I actually like dividend income. Dividends also seem an an advantage in EM where accounting is more lax, but you can't fake cash dividends.

I am 50:50 US/ex US. Overweight EM by a bit (~33% vs 25% by the method that includes S Korea) as well as small caps (~40%) in ex US, Due to rebalancing in Sept my actual current values are overweight ex US by a bit.

[letsgobobby]

Deleted

[KJVanguard]

And I don't hold a separate emerging small-cap fund at all; the ETFs are very expensive and have been tax-inefficient.

I hold DGS in various inherited IRAs, so I don't have to care about tax efficiency. That would be Wisdom Tree EM Small Cap Dividend. At 63 basis points it is indeed expensive compared to Vanguard standards (which still is cheaper than the typical active fund).

[KJVanguard]

I'm 60% international. My goal is not to better the US markets, but to decrease the odds of asymmetrical risk, ie, a single country black swan event.

So you don't want to be the Japanese investor who put all his money into Japan in December 1989.

Everyone else now is looking at history (last 49 years) and writing off international, though I recognize the risk of being entirely invested in one county regardless what that country may be (even if that country happens to be the US.) As mutual funds ads must say, past performance is not indicative of future results.

[TheNightsToCome]

Portfolio watch tells me that 55% of my equities are international (with an over-sized portion being emerging markets). I believe this is pretty close to cap weighting for the world, isn't it?

Vanguard wants to cap weight everything else, so I guess they can't be upset with a cap weight in foreign stock.

Anybody meet or exceed my 55%? Just curious. Given valuations, I think it's just common sense to favor foreign over US. No, international hasn't done well lately, though it seems you should favor that which has the best valuation at any given time. If US stocks were relatively cheaper, well, then I would favor US stocks.

I am 100% international.

[3504PIR]

I’ve travelled a lot in the Pacific Rim and Europe the past ten years and from a sample size of me, I don’t see growth internationally similar to 8-10 years ago. Being that my perspective is just that, mine and very limited, I’m curious to hear from those with a high exposure where they see growth coming over the next 5-10 years that motivates their high exposure. This isn’t a challenge by me, rather than an honest curiosity on a topic I think about every time I travel.

[grabiner]

I’ve travelled a lot in the Pacific Rim and Europe the past ten years and from a sample size of me, I don’t see growth internationally similar to 8-10 years ago. Being that my perspective is just that, mine and very limited, I’m curious to hear from those with a high exposure where they see growth coming over the next 5-10 years that motivates their high exposure. This isn’t a challenge by me, rather than an honest curiosity on a topic I think about every time I travel.

Economic growth is not the same as stock market growth. A stock is a claim on the corporation's future profits; investors either receive those profits as dividends or receive the benefit when the profits are reinvested in the corporation. Thus, if a corporation (in any country) is likely to grow slowly, investors will not pay much for a dollar of current profits, because the future profits are limited; if the corporation grows slowly as expected, its stock price won't change much. Conversely, if a corporation is expected to grow rapidly, investors will pay much more for the current profits, and if the growth turns out to be slow, the stock price will fall. This is the usual distinction between value stocks (low price-to-earnings) and growth stocks (high price-to-earnings implies high expected growth). Both types of stocks can do well.

[bgf]

I’ve travelled a lot in the Pacific Rim and Europe the past ten years and from a sample size of me, I don’t see growth internationally similar to 8-10 years ago. Being that my perspective is just that, mine and very limited, I’m curious to hear from those with a high exposure where they see growth coming over the next 5-10 years that motivates their high exposure. This isn’t a challenge by me, rather than an honest curiosity on a topic I think about every time I travel.

which major cities have you travelled to that makes you feel this way?

[heyyou]

50/50
I know that I don't know.

[pdavi21]

The person who has taken out the most margin debt to puchase the most bullish call options on international stocks while also taking out more margin debt to finance naked shorts against US stocks.

[3504PIR]

I’ve travelled a lot in the Pacific Rim and Europe the past ten years and from a sample size of me, I don’t see growth internationally similar to 8-10 years ago. Being that my perspective is just that, mine and very limited, I’m curious to hear from those with a high exposure where they see growth coming over the next 5-10 years that motivates their high exposure. This isn’t a challenge by me, rather than an honest curiosity on a topic I think about every time I travel.

which major cities have you travelled to that makes you feel this way?

In Europe, every capital city in NATO minus Istanbul and Riga as well as many other major cities, such as Barcelona, Manchester, Munich and about 20 others. In Asia, about a dozen or so geographically from Seoul to Singapore. Less travel in Asia as I was in Europe from 2007-2016 and only came to Hawaii in 2016. Again, this isn’t a challenge question. I’m interested in in what others see that I’m missing.

[3504PIR]

I’ve travelled a lot in the Pacific Rim and Europe the past ten years and from a sample size of me, I don’t see growth internationally similar to 8-10 years ago. Being that my perspective is just that, mine and very limited, I’m curious to hear from those with a high exposure where they see growth coming over the next 5-10 years that motivates their high exposure. This isn’t a challenge by me, rather than an honest curiosity on a topic I think about every time I travel.

Economic growth is not the same as stock market growth. A stock is a claim on the corporation's future profits; investors either receive those profits as dividends or receive the benefit when the profits are reinvested in the corporation. Thus, if a corporation (in any country) is likely to grow slowly, investors will not pay much for a dollar of current profits, because the future profits are limited; if the corporation grows slowly as expected, its stock price won't change much. Conversely, if a corporation is expected to grow rapidly, investors will pay much more for the current profits, and if the growth turns out to be slow, the stock price will fall. This is the usual distinction between value stocks (low price-to-earnings) and growth stocks (high price-to-earnings implies high expected growth). Both types of stocks can do well.

I am not 100% sure what your meaning is in relationship to my question. Economically, my understanding is growth translates into corporate investment, hiring, profits, etc. Conversely, lack of growth will encourage companies to become defensive and not invest, hire, etc. From a macro level. I am sure there are excellent companies in countries that are not experiencing growth but I view an index in a more macro level rather than looking for specific companies. Is that wrong?

[VAslim16]

I am 50/50 and that allocation seems to be high for most Bogleheads. Most here seem to be 20-30% and some are 0%. I have no plans to change anytime soon. Hope at some point the high allocation will pay off

[JoMoney]

If I'm currently living outside the U.S., can i count my S&P 500 index fund as being 100% international?

[columbia]

I’ve travelled a lot in the Pacific Rim and Europe the past ten years and from a sample size of me, I don’t see growth internationally similar to 8-10 years ago. Being that my perspective is just that, mine and very limited, I’m curious to hear from those with a high exposure where they see growth coming over the next 5-10 years that motivates their high exposure. This isn’t a challenge by me, rather than an honest curiosity on a topic I think about every time I travel.

Economic growth is not the same as stock market growth. A stock is a claim on the corporation's future profits; investors either receive those profits as dividends or receive the benefit when the profits are reinvested in the corporation. Thus, if a corporation (in any country) is likely to grow slowly, investors will not pay much for a dollar of current profits, because the future profits are limited; if the corporation grows slowly as expected, its stock price won't change much. Conversely, if a corporation is expected to grow rapidly, investors will pay much more for the current profits, and if the growth turns out to be slow, the stock price will fall. This is the usual distinction between value stocks (low price-to-earnings) and growth stocks (high price-to-earnings implies high expected growth). Both types of stocks can do well.

For example: ex-China investors hoping to get large returns through equity holdings, based on GDP growth there.

I have no idea if investors in China can actually do so through their market. That has no bearing in my life, but my guess would be “it’s complicated and probably not very effectively.”

[bgf]

I’ve travelled a lot in the Pacific Rim and Europe the past ten years and from a sample size of me, I don’t see growth internationally similar to 8-10 years ago. Being that my perspective is just that, mine and very limited, I’m curious to hear from those with a high exposure where they see growth coming over the next 5-10 years that motivates their high exposure. This isn’t a challenge by me, rather than an honest curiosity on a topic I think about every time I travel.

which major cities have you travelled to that makes you feel this way?

In Europe, every capital city in NATO minus Istanbul and Riga as well as many other major cities, such as Barcelona, Manchester, Munich and about 20 others. In Asia, about a dozen or so geographically from Seoul to Singapore. Less travel in Asia as I was in Europe from 2007-2016 and only came to Hawaii in 2016. Again, this isn’t a challenge question. I’m interested in in what others see that I’m missing.

mine wasn't either i was genuinely curious. you've definitely seen far more than i have!

[hilink73]

Well, as an investor from Switzerland I do have 86% "international" and 14% Swiss equities.

Of that "international" part are 27% US, 28% Europe + AsiaPacific and 45% Emerging Markets.

[qwertyjazz]

If I'm currently living outside the U.S., can i count my S&P 500 index fund as being 100% international?

Yes but single country risk
You might want to consider diversifying risk

[grabiner]

Economic growth is not the same as stock market growth. A stock is a claim on the corporation's future profits; investors either receive those profits as dividends or receive the benefit when the profits are reinvested in the corporation. Thus, if a corporation (in any country) is likely to grow slowly, investors will not pay much for a dollar of current profits, because the future profits are limited; if the corporation grows slowly as expected, its stock price won't change much. Conversely, if a corporation is expected to grow rapidly, investors will pay much more for the current profits, and if the growth turns out to be slow, the stock price will fall. This is the usual distinction between value stocks (low price-to-earnings) and growth stocks (high price-to-earnings implies high expected growth). Both types of stocks can do well.

I am not 100% sure what your meaning is in relationship to my question. Economically, my understanding is growth translates into corporate investment, hiring, profits, etc. Conversely, lack of growth will encourage companies to become defensive and not invest, hire, etc. From a macro level. I am sure there are excellent companies in countries that are not experiencing growth but I view an index in a more macro level rather than looking for specific companies. Is that wrong?

Growth translates into increased profits. However, investments in slow-growing companies can be good also, at the right price.

Suppose, for example, that company A earns $1 per share, and does not grow at all; you expect it to earn $1 per share forever. Meanwhile, company B earns $1 per share, and is expected to grow by 4% per year. If you pay $12.50 per share of company A, and $25.00 per share of company B, you will get an 8% return on both investments; company B will return only $1 in earnings but will grow by 4%, so that its share price will rise to $26 plus any retained earnings. Investors will say that company A trades at a price/earnings ratio of 12.5, which makes it a value stock, and company B trades at a price/earnings ratio of 25, which makes it a growth stock.

[visualguy]

In Europe, every capital city in NATO minus Istanbul and Riga as well as many other major cities, such as Barcelona, Manchester, Munich and about 20 others. In Asia, about a dozen or so geographically from Seoul to Singapore. Less travel in Asia as I was in Europe from 2007-2016 and only came to Hawaii in 2016. Again, this isn’t a challenge question. I’m interested in in what others see that I’m missing.

I don't think you're missing anything... Low growth in the developed countries, and many suffer from demographic challenges. Growth in China and India, but then investing in their public stock markets doesn't really give you much of that action...

[DrGoogle2017]

Right now I have none, but if the opportunity presents, I could go up to 20% max. No more. But what I’ve seen lately, When USA stock market goes down, the international market follows. So I’m not sure it’s be diversified enough. They move almost in lock step, that’s my observation.

[3504PIR]

In Europe, every capital city in NATO minus Istanbul and Riga as well as many other major cities, such as Barcelona, Manchester, Munich and about 20 others. In Asia, about a dozen or so geographically from Seoul to Singapore. Less travel in Asia as I was in Europe from 2007-2016 and only came to Hawaii in 2016. Again, this isn’t a challenge question. I’m interested in in what others see that I’m missing.

I don't think you're missing anything... Low growth in the developed countries, and many suffer from demographic challenges. Growth in China and India, but then investing in their public stock markets doesn't really give you much of that action...

Thanks, and thanks to Grabineir as well and sorry for the hijack. I should start a new thread.

[fennewaldaj]

I’ve travelled a lot in the Pacific Rim and Europe the past ten years and from a sample size of me, I don’t see growth internationally similar to 8-10 years ago. Being that my perspective is just that, mine and very limited, I’m curious to hear from those with a high exposure where they see growth coming over the next 5-10 years that motivates their high exposure. This isn’t a challenge by me, rather than an honest curiosity on a topic I think about every time I travel.

which major cities have you travelled to that makes you feel this way?

In Europe, every capital city in NATO minus Istanbul and Riga as well as many other major cities, such as Barcelona, Manchester, Munich and about 20 others. In Asia, about a dozen or so geographically from Seoul to Singapore. Less travel in Asia as I was in Europe from 2007-2016 and only came to Hawaii in 2016. Again, this isn’t a challenge question. I’m interested in in what others see that I’m missing.

From my reading (particularly expected returns by Antti Ilmanen) it is my understanding that long term GDP growth serves a ceiling for eps growth (emerging markets are typically well below gdp growth due to share dilution and the private economy). Lately gdp growth in the US has been a bit higher than in the rest of the developed world but not a lot. Eps growth on the other hand has been quite a bit higher. History would suggest that eps growth in the US is likely to be closer (or lower than) gdp growth in the future. So I would not so much suggest that international will have great growth but the US may have poor growth relative to what we are used to. ex US stocks have valuations more appropriate for slow growers.

[RF]

Always 50/50 when buying in my taxable for the last 10 years not sure what's my current allocation since US stocks appreciate so much while international lagging

[asif408]

I'm at 92% international with about two thirds of that in emerging markets value.

[SoAnyway]

Anybody meet or exceed my 55%? Just curious.

I am 100% international.

^^^OP, I think you've got your winner.

FWIW, my domestic/intl allocation in the equity portion of the portfolio has been 80/20 for years. No complaints. I only rebalance annually so no idea what it is today (and don't care). I understand the points being made, but I'll stick with 80/20. I have my reasons.

[whodidntante]

If I'm currently living outside the U.S., can i count my S&P 500 index fund as being 100% international?

Yes but single country risk
You might want to consider diversifying risk

No need. Here on Bogleheads.org, we believe in American exceptionalism. Except for cars.

[Spinola]

5% of all holdings compositions for me. A very small part.

[Northern Flicker]

My IPS is to hold everything at market weight and EM at double weight (actually fixed at 18% of equity to make me automatically double down on EM

It is not possible to hold EM at double market-cap weight and everything else at market-cap weight. If you hold EM at double market cap weight, then you must hold US or DM non-US or both at below market-cap weight.

[james22]

David Swensen

46% Vanguard FTSE Emerging Markets
15% iShares MSCI EAFE

https://www.gurufocus.com/guru/david+sw ... tock-picks

[Crisium]

1/3 ex-US here. Probably slightly higher than average for Bogleheads standards. I'm fairly negative on ex-US especially DM, but I'm already exercising a heavy US bias and think it's too risky to go 100% US, or that even the recommended 20% ex-US might not make a significant difference if the US market goes 1990 Japan.

I'm also about the same as 25% US and 75% total world (includes US). I remember reading that recommendation in a thread last year and it intrigued me with its suggestion for a healthy home bias being 25% home nation and 75% total world. But I'm not sure I want to follow that exactly if weights change, and I also have some other tilting so I couldn't do a 2 fund equities portfolio anyway. But it feels good to be there as it really does seem a reasonable home bias.

[bluquark]

But what I’ve seen lately, When USA stock market goes down, the international market follows. So I’m not sure it’s be diversified enough. They move almost in lock step, that’s my observation.

They do, but the total returns still drift apart significantly over a period of many years, and that should be the main concern for long-term investors.

[pascalwager]

Total International Stock 30.1%
International Value 12.4%
International Small Co. 6.1%
Emerging Markets 1.6%
Total 50.2%

[pascalwager]

Portfolio watch tells me that 55% of my equities are international (with an over-sized portion being emerging markets). I believe this is pretty close to cap weighting for the world, isn't it?

Vanguard wants to cap weight everything else, so I guess they can't be upset with a cap weight in foreign stock.

Anybody meet or exceed my 55%? Just curious. Given valuations, I think it's just common sense to favor foreign over US. No, international hasn't done well lately, though it seems you should favor that which has the best valuation at any given time. If US stocks were relatively cheaper, well, then I would favor US stocks.

International cap weight is about 45% right now, so you're doing an international tilt with respect to world market (55/45).

[RetiredInTheWest]

58% domestic, 42% international. Trying to stay near 60/40 for now?

[Socrates]

Now who overweights small caps via VSS as I do?

I do........only 20% international, but 10% small value DLS and 10% international value

[kolea]

I think we should retitle this thread "Who has suffered the most with International stocks?"

Full disclosure, I have ex-US to the tune of about 25% but my primary benefit so far is being able to say, yes, I am well diversified. I am not sure International exposure is worth bragging about unless this is a contest for who has drank the most Koolaid.