Lost duodecade in international (ASWX, VEU, CWI)

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sfmurph
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Lost duodecade in international (ASWX, VEU, CWI)

Post by sfmurph » Wed Jul 22, 2020 10:52 pm

The international (global ex-US) has now had a lost 12 years: from May 2008 to May 2020, the returns are effectively 0%, worse if you consider inflation and tax-drag. Here's a Portfolio Visualizer of ASWX, CWI and VEU, 3 different ETFs tracking non-US.

I do wonder what the US markets would look like without the big growth stocks.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by RocketShipTech » Wed Jul 22, 2020 11:19 pm

How about 2002-2009?

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by vineviz » Wed Jul 22, 2020 11:50 pm

sfmurph wrote:
Wed Jul 22, 2020 10:52 pm
The international (global ex-US) has now had a lost 12 years: from May 2008 to May 2020, the returns are effectively 0%, worse if you consider inflation and tax-drag. Here's a Portfolio Visualizer of ASWX, CWI and VEU, 3 different ETFs tracking non-US.

I do wonder what the US markets would look like without the big growth stocks.
Considering that your comparison starts at the end of a period I which international stocks had nearly triple the return of US stocks, I suppose it’s not surprising that US stocks might have staged a rebound.

I think anyone who believes that the recent strong relative performance of US stocks can persist indefinitely should take a look back at how these cycles have played out over the past six decades.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by 000 » Thu Jul 23, 2020 12:27 am

Still worth diversifying against single country risk.

Or maybe we can all start investing in an S&P 5 fund.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by IndexCore » Thu Jul 23, 2020 12:59 am

sfmurph wrote:
Wed Jul 22, 2020 10:52 pm
The international (global ex-US) has now had a lost 12 years: from May 2008 to May 2020, the returns are effectively 0%, worse if you consider inflation and tax-drag.
It's interesting you fail to mention the great financial crisis of 2008, and start measuring performance during that crisis.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by sfmurph » Thu Jul 23, 2020 12:26 pm

The start of this period was the start of the ASWX ETF. Of course that period just happened to be 0% growth, but yes, it's still a form of cherry-picking. The decade previous was a lost decade for US stocks. (And I know there's no predicting what the 2020s will bring.)

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by asif408 » Thu Jul 23, 2020 12:41 pm

sfmurph wrote:
Thu Jul 23, 2020 12:26 pm
The start of this period was the start of the ASWX ETF. Of course that period just happened to be 0% growth, but yes, it's still a form of cherry-picking. The decade previous was a lost decade for US stocks. (And I know there's no predicting what the 2020s will bring.)
Since you admit you cherry picked, I went back and also cherry picked a few time periods for comparison, longer than yours. Here's a comparison of emerging markets stocks vs. US stocks from late 1998 to present (http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D), and total international index vs. US stocks from early 2002 to present (http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D).

It appears that emerging markets have beat US stocks for the last 22 years, while total international beat US from 2002-2015, and was about even from 2002-2018. It's really only in the past 2 years that US stocks have overtaken stocks. I interpret these graphs as evidence that emerging markets stocks are far superior to US stocks. I also interpret the other chart as evidence that international stocks are in fact a better investment most of the time than US stocks, since they outperformed for the first 13 of the 18 years, and the last few years appear to be just an anomaly of US stocks have a great brief run.

But whatever you do, please don't go back to 1994 for the start of emerging markets fund or back to 1996 for the start of the international fund, otherwise you'll ruin my thesis.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by sfmurph » Thu Jul 23, 2020 3:06 pm

For me, this points to investing in VT / VTWAX (Vanguard's Total World Stock Index Fund). I have a hard time staying the course when a particular "tilt" falls so far behind. I wasn't comfortable with SCV for the same reason.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by abuss368 » Wed Jul 29, 2020 9:33 pm

sfmurph wrote:
Wed Jul 22, 2020 10:52 pm
The international (global ex-US) has now had a lost 12 years: from May 2008 to May 2020, the returns are effectively 0%, worse if you consider inflation and tax-drag. Here's a Portfolio Visualizer of ASWX, CWI and VEU, 3 different ETFs tracking non-US.

I do wonder what the US markets would look like without the big growth stocks.
I follow the Two Fund Portfolio of Total Stock and Total Bond as recommended by Jack Bogle and Warren Buffett. We have a great thread going about it. The best part about this strategy is it will never be below average.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by lostdog » Wed Jul 29, 2020 9:37 pm

sfmurph wrote:
Thu Jul 23, 2020 3:06 pm
For me, this points to investing in VT / VTWAX (Vanguard's Total World Stock Index Fund). I have a hard time staying the course when a particular "tilt" falls so far behind. I wasn't comfortable with SCV for the same reason.
+1

You nailed it. Glad you didn't drop international and say you did it because Jack and Warren said so.
Last edited by lostdog on Wed Jul 29, 2020 9:39 pm, edited 1 time in total.
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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by abuss368 » Wed Jul 29, 2020 9:39 pm

sfmurph wrote:
Thu Jul 23, 2020 3:06 pm
For me, this points to investing in VT / VTWAX (Vanguard's Total World Stock Index Fund). I have a hard time staying the course when a particular "tilt" falls so far behind. I wasn't comfortable with SCV for the same reason.
Over the long term it probably won’t make much difference!
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by TropikThunder » Wed Jul 29, 2020 9:44 pm

abuss368 wrote:
Wed Jul 29, 2020 9:39 pm
sfmurph wrote:
Thu Jul 23, 2020 3:06 pm
For me, this points to investing in VT / VTWAX (Vanguard's Total World Stock Index Fund). I have a hard time staying the course when a particular "tilt" falls so far behind. I wasn't comfortable with SCV for the same reason.
Over the long term it probably won’t make much difference!
Why are you constantly telling everyone not to invest in Int’l if it “probably won’t make much difference”?

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by Triple digit golfer » Wed Jul 29, 2020 10:02 pm

I have always held 70/30 U S./international and think often about making it 60/40 immediately.

For one, it's closer to global market weight. Two, 60% in one country is still a huge number. Three, Vanguard and others use 60/40.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by 000 » Wed Jul 29, 2020 10:07 pm

Triple digit golfer wrote:
Wed Jul 29, 2020 10:02 pm
I have always held 70/30 U S./international and think often about making it 60/40 immediately.

For one, it's closer to global market weight. Two, 60% in one country is still a huge number. Three, Vanguard and others use 60/40.
I think this is a reasonable choice. My target is 50/50 US/Devel.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by Triple digit golfer » Wed Jul 29, 2020 10:19 pm

000 wrote:
Wed Jul 29, 2020 10:07 pm
Triple digit golfer wrote:
Wed Jul 29, 2020 10:02 pm
I have always held 70/30 U S./international and think often about making it 60/40 immediately.

For one, it's closer to global market weight. Two, 60% in one country is still a huge number. Three, Vanguard and others use 60/40.
I think this is a reasonable choice. My target is 50/50 US/Devel.
I'm just hesitant to change after 13 years. However, I'd be moving into the lower performer so there wouldn't be a hit from a market timing or performance chasing standpoint. Had I invested more internationally all along my portfolio would be smaller.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by 000 » Wed Jul 29, 2020 10:25 pm

Triple digit golfer wrote:
Wed Jul 29, 2020 10:19 pm
000 wrote:
Wed Jul 29, 2020 10:07 pm
Triple digit golfer wrote:
Wed Jul 29, 2020 10:02 pm
I have always held 70/30 U S./international and think often about making it 60/40 immediately.

For one, it's closer to global market weight. Two, 60% in one country is still a huge number. Three, Vanguard and others use 60/40.
I think this is a reasonable choice. My target is 50/50 US/Devel.
I'm just hesitant to change after 13 years. However, I'd be moving into the lower performer so there wouldn't be a hit from a market timing or performance chasing standpoint. Had I invested more internationally all along my portfolio would be smaller.
If you leave it as is and international outperforms, it may creep up to 40% all on its own :twisted:

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by whodidntante » Wed Jul 29, 2020 10:26 pm

vineviz wrote:
Wed Jul 22, 2020 11:50 pm
I think anyone who believes that the recent strong relative performance of US stocks can persist indefinitely should take a look back at how these cycles have played out over the past six decades.
With unbounded American exceptionalism? :twisted:

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by Blue456 » Wed Jul 29, 2020 10:32 pm

sfmurph wrote:
Wed Jul 22, 2020 10:52 pm
The international (global ex-US) has now had a lost 12 years: from May 2008 to May 2020, the returns are effectively 0%, worse if you consider inflation and tax-drag. Here's a Portfolio Visualizer of ASWX, CWI and VEU, 3 different ETFs tracking non-US.

I do wonder what the US markets would look like without the big growth stocks.
That's just recency bias.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by lostdog » Thu Jul 30, 2020 9:58 am

Triple digit golfer wrote:
Wed Jul 29, 2020 10:02 pm
I have always held 70/30 U S./international and think often about making it 60/40 immediately.

For one, it's closer to global market weight. Two, 60% in one country is still a huge number. Three, Vanguard and others use 60/40.
:sharebeer
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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by lostdog » Thu Jul 30, 2020 9:58 am

000 wrote:
Wed Jul 29, 2020 10:25 pm
Triple digit golfer wrote:
Wed Jul 29, 2020 10:19 pm
000 wrote:
Wed Jul 29, 2020 10:07 pm
Triple digit golfer wrote:
Wed Jul 29, 2020 10:02 pm
I have always held 70/30 U S./international and think often about making it 60/40 immediately.

For one, it's closer to global market weight. Two, 60% in one country is still a huge number. Three, Vanguard and others use 60/40.
I think this is a reasonable choice. My target is 50/50 US/Devel.
I'm just hesitant to change after 13 years. However, I'd be moving into the lower performer so there wouldn't be a hit from a market timing or performance chasing standpoint. Had I invested more internationally all along my portfolio would be smaller.
If you leave it as is and international outperforms, it may creep up to 40% all on its own :twisted:
Good point.
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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by lostdog » Thu Jul 30, 2020 10:02 am

TropikThunder wrote:
Wed Jul 29, 2020 9:44 pm
abuss368 wrote:
Wed Jul 29, 2020 9:39 pm
sfmurph wrote:
Thu Jul 23, 2020 3:06 pm
For me, this points to investing in VT / VTWAX (Vanguard's Total World Stock Index Fund). I have a hard time staying the course when a particular "tilt" falls so far behind. I wasn't comfortable with SCV for the same reason.
Over the long term it probably won’t make much difference!
Why are you constantly telling everyone not to invest in Int’l if it “probably won’t make much difference”?
He bailed on international because of bad performance but then used the "simplicity" excuse. A lot of virtual high fives going on the anti-international under diversified two fund thread.
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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by HippoSir » Thu Jul 30, 2020 10:39 am

lostdog wrote:
Thu Jul 30, 2020 10:02 am
He bailed on international because of bad performance but then used the "simplicity" excuse. A lot of virtual high fives going on the anti-international under diversified two fund thread.
I always find it weird that people claim to be passive investors then make active decisions like this. Just hold the total world portfolio IMO.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by visualguy » Thu Jul 30, 2020 5:34 pm

HippoSir wrote:
Thu Jul 30, 2020 10:39 am
lostdog wrote:
Thu Jul 30, 2020 10:02 am
He bailed on international because of bad performance but then used the "simplicity" excuse. A lot of virtual high fives going on the anti-international under diversified two fund thread.
I always find it weird that people claim to be passive investors then make active decisions like this. Just hold the total world portfolio IMO.
You have to realize that the success of passive index investing isn't a universal truth that applies everywhere. It has worked quite well in the long run for the US stock market, but not for many other markets, and not for the ex-US index. I don't think there would be too many Bogleheads around without the US stock market being what it is.

Some experts (e.g. Vanguard) have been expecting this to change based on valuations, but they've been wrong for quite a long time now. Others do not expect this to change:

https://www.marketwatch.com/story/buy-a ... 2020-07-29
https://research-center.amundi.com/page ... Portfolios

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by dmcmahon » Thu Jul 30, 2020 6:32 pm

abuss368 wrote:
Wed Jul 29, 2020 9:33 pm
sfmurph wrote:
Wed Jul 22, 2020 10:52 pm
The international (global ex-US) has now had a lost 12 years: from May 2008 to May 2020, the returns are effectively 0%, worse if you consider inflation and tax-drag. Here's a Portfolio Visualizer of ASWX, CWI and VEU, 3 different ETFs tracking non-US.

I do wonder what the US markets would look like without the big growth stocks.
I follow the Two Fund Portfolio of Total Stock and Total Bond as recommended by Jack Bogle and Warren Buffett. We have a great thread going about it. The best part about this strategy is it will never be below average.
I was bitterly disappointed in the returns losses I accumulated in international index funds over 10 years. Largely on valuation, the sinking dollar, and relative COVID-19 response by governments, I'm hearing more buzz about international investing. This heartens me somewhat because I have hung on to some international positions in trust funds that I'm responsible for, even as I personally and publicly bailed out for my own portfolio. I'm open to a well-constructed international growth index but have yet to find one at low cost (EFG is close). Meanwhile I've no cause to regret having left VEA and VXUS for VUG.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by columbia » Thu Jul 30, 2020 6:56 pm

whodidntante wrote:
Wed Jul 29, 2020 10:26 pm
vineviz wrote:
Wed Jul 22, 2020 11:50 pm
I think anyone who believes that the recent strong relative performance of US stocks can persist indefinitely should take a look back at how these cycles have played out over the past six decades.
With unbounded American exceptionalism? :twisted:
To be very clear, that’s not what the theory of American exceptionalism meant:

https://en.m.wikipedia.org/wiki/American_exceptionalism
If you leave your head in the sand for too long, you might get run over by a Jeep.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by abuss368 » Thu Jul 30, 2020 7:01 pm

dmcmahon wrote:
Thu Jul 30, 2020 6:32 pm
abuss368 wrote:
Wed Jul 29, 2020 9:33 pm
sfmurph wrote:
Wed Jul 22, 2020 10:52 pm
The international (global ex-US) has now had a lost 12 years: from May 2008 to May 2020, the returns are effectively 0%, worse if you consider inflation and tax-drag. Here's a Portfolio Visualizer of ASWX, CWI and VEU, 3 different ETFs tracking non-US.

I do wonder what the US markets would look like without the big growth stocks.
I follow the Two Fund Portfolio of Total Stock and Total Bond as recommended by Jack Bogle and Warren Buffett. We have a great thread going about it. The best part about this strategy is it will never be below average.
I was bitterly disappointed in the returns losses I accumulated in international index funds over 10 years. Largely on valuation, the sinking dollar, and relative COVID-19 response by governments, I'm hearing more buzz about international investing. This heartens me somewhat because I have hung on to some international positions in trust funds that I'm responsible for, even as I personally and publicly bailed out for my own portfolio. I'm open to a well-constructed international growth index but have yet to find one at low cost (EFG is close). Meanwhile I've no cause to regret having left VEA and VXUS for VUG.
It has definitely been a challenging international investment environment. I had invested in intern for even a longer period of time.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by gks » Thu Jul 30, 2020 7:12 pm

For those who may be interested, go to Morningstar and put vtiax into the search window. Then put maximum into the length. Then, put vtsax into the compare. Look at the results for the last 26 years, three months. Past returns do no predict future returns, but I think I am going to go with past returns for the remainder of my life.

Greg

Edit

US 68,704
Int 19,472

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by Ferdinand2014 » Thu Jul 30, 2020 7:31 pm

lostdog wrote:
Wed Jul 29, 2020 9:37 pm
sfmurph wrote:
Thu Jul 23, 2020 3:06 pm
For me, this points to investing in VT / VTWAX (Vanguard's Total World Stock Index Fund). I have a hard time staying the course when a particular "tilt" falls so far behind. I wasn't comfortable with SCV for the same reason.
+1

You nailed it. Glad you didn't drop international and say you did it because Jack and Warren said so.
When I look at portfolio visualizer, using proportions of VTSAX(VTSMX) and VTIAX(VEU) equal to VT, no matter how I slice it, VT underperforms by a lot. Morningstar data (through Fidelity) shows VT underperforms the FTSE global all cap index by almost 2% per annum going back to 2008 inception date. Vanguards website is more favorable, but there is an asterisk saying they use spliced data which seems a bit suspect to me when both portfoliovisualizer and morning* do not. Can someone explain the discrepancy and why you would recommend such a poor performing ETF relative to its benchmark? It seems if I were to include international, I would use separate funds to do so based on the data I see.
Last edited by Ferdinand2014 on Thu Jul 30, 2020 7:32 pm, edited 1 time in total.
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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by 000 » Thu Jul 30, 2020 7:32 pm

Ferdinand2014 wrote:
Thu Jul 30, 2020 7:31 pm
lostdog wrote:
Wed Jul 29, 2020 9:37 pm
sfmurph wrote:
Thu Jul 23, 2020 3:06 pm
For me, this points to investing in VT / VTWAX (Vanguard's Total World Stock Index Fund). I have a hard time staying the course when a particular "tilt" falls so far behind. I wasn't comfortable with SCV for the same reason.
+1

You nailed it. Glad you didn't drop international and say you did it because Jack and Warren said so.
When I look at portfolio visualizer, using proportions of VTSAX(VTSMX) and VTIAX(VEU) equal to VT, no matter how I slice it, VT underperforms by a lot. Morningstar data (through Fidelity) shows VT underperforms the FTSE global all cap index by almost 2% per annum going back to 2008 inception date. Vanguards website is more favorable, but there is an asterisk saying they use spliced data which seems a bit suspect to me when both portfoliovisualizer and morning* do not. Can someone explain the discrepancy and why you would recommend such a poor performing ETF relative to its benchmark?
The proportions change over time. You are comparing a fixed percentage allocation to the two funds to a variable allocation within VT.

Because US has done better since 2008, a higher fixed allocation to US beats a lower one.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by Ferdinand2014 » Thu Jul 30, 2020 7:34 pm

000 wrote:
Thu Jul 30, 2020 7:32 pm
Ferdinand2014 wrote:
Thu Jul 30, 2020 7:31 pm
lostdog wrote:
Wed Jul 29, 2020 9:37 pm
sfmurph wrote:
Thu Jul 23, 2020 3:06 pm
For me, this points to investing in VT / VTWAX (Vanguard's Total World Stock Index Fund). I have a hard time staying the course when a particular "tilt" falls so far behind. I wasn't comfortable with SCV for the same reason.
+1

You nailed it. Glad you didn't drop international and say you did it because Jack and Warren said so.
When I look at portfolio visualizer, using proportions of VTSAX(VTSMX) and VTIAX(VEU) equal to VT, no matter how I slice it, VT underperforms by a lot. Morningstar data (through Fidelity) shows VT underperforms the FTSE global all cap index by almost 2% per annum going back to 2008 inception date. Vanguards website is more favorable, but there is an asterisk saying they use spliced data which seems a bit suspect to me when both portfoliovisualizer and morning* do not. Can someone explain the discrepancy and why you would recommend such a poor performing ETF relative to its benchmark?
The proportions change over time. You are comparing a fixed percentage allocation to the two funds with a variable allocation within VT.
So this is my thought as well, which begs the question, is it inherently better to use a fixed allocation and rebalance with domestic vs international, vs an all in one market cap? If actually true, this would imply there is not a benefit to a global market cap portfolio crossing vs some other proportion such as a random 20% or such. Could it also be the huge number of stocks in the ETF and management/transactional costs to manage this is intrinsically higher?
Last edited by Ferdinand2014 on Thu Jul 30, 2020 7:37 pm, edited 1 time in total.
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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by nisiprius » Thu Jul 30, 2020 7:35 pm

Duodecade, eh? Well, I learned a new word today.
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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by 000 » Thu Jul 30, 2020 7:37 pm

Ferdinand2014 wrote:
Thu Jul 30, 2020 7:34 pm
000 wrote:
Thu Jul 30, 2020 7:32 pm
Ferdinand2014 wrote:
Thu Jul 30, 2020 7:31 pm
lostdog wrote:
Wed Jul 29, 2020 9:37 pm
sfmurph wrote:
Thu Jul 23, 2020 3:06 pm
For me, this points to investing in VT / VTWAX (Vanguard's Total World Stock Index Fund). I have a hard time staying the course when a particular "tilt" falls so far behind. I wasn't comfortable with SCV for the same reason.
+1

You nailed it. Glad you didn't drop international and say you did it because Jack and Warren said so.
When I look at portfolio visualizer, using proportions of VTSAX(VTSMX) and VTIAX(VEU) equal to VT, no matter how I slice it, VT underperforms by a lot. Morningstar data (through Fidelity) shows VT underperforms the FTSE global all cap index by almost 2% per annum going back to 2008 inception date. Vanguards website is more favorable, but there is an asterisk saying they use spliced data which seems a bit suspect to me when both portfoliovisualizer and morning* do not. Can someone explain the discrepancy and why you would recommend such a poor performing ETF relative to its benchmark?
The proportions change over time. You are comparing a fixed percentage allocation to the two funds with a variable allocation within VT.
So this is my though as well, which begs the question, is it inherently better to use a fixed allocation and rebalance with domestic vs international, vs an all in one market cap?
The "buy the haystack" proponents (well, except for the ones who think there is no hay outside the US) will say the world market cap is the theoretically optimal portfolio and there is no reason to tilt from it unless you know more than the market.

Personally, I am targeting 50/50 US/Developed Markets under the theory that I don't want more than 50% in one country's stocks and I don't want more than 50% in foreign stocks (harder to seek recourse if things go bad, geopolitical risk).

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by Ferdinand2014 » Thu Jul 30, 2020 7:40 pm

000 wrote:
Thu Jul 30, 2020 7:37 pm
Ferdinand2014 wrote:
Thu Jul 30, 2020 7:34 pm
000 wrote:
Thu Jul 30, 2020 7:32 pm
Ferdinand2014 wrote:
Thu Jul 30, 2020 7:31 pm
lostdog wrote:
Wed Jul 29, 2020 9:37 pm


+1

You nailed it. Glad you didn't drop international and say you did it because Jack and Warren said so.
When I look at portfolio visualizer, using proportions of VTSAX(VTSMX) and VTIAX(VEU) equal to VT, no matter how I slice it, VT underperforms by a lot. Morningstar data (through Fidelity) shows VT underperforms the FTSE global all cap index by almost 2% per annum going back to 2008 inception date. Vanguards website is more favorable, but there is an asterisk saying they use spliced data which seems a bit suspect to me when both portfoliovisualizer and morning* do not. Can someone explain the discrepancy and why you would recommend such a poor performing ETF relative to its benchmark?
The proportions change over time. You are comparing a fixed percentage allocation to the two funds with a variable allocation within VT.
So this is my though as well, which begs the question, is it inherently better to use a fixed allocation and rebalance with domestic vs international, vs an all in one market cap?
The "buy the haystack" proponents (well, except for the ones who think there is no hay outside the US) will say the world market cap is the theoretically optimal portfolio and there is no reason to tilt from it unless you know more than the market.

Personally, I am targeting 50/50 US/Developed Markets under the theory that I don't want more than 50% in one country's stocks and I don't want more than 50% in foreign stocks (harder to seek recourse if things go bad, geopolitical risk).
Given the very high correlation (definitely not returns though) at almost 1 the last 12 years and about .85 the last 20-25 years between developed US and international, why did you choose this and not add emerging?
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by Triple digit golfer » Thu Jul 30, 2020 7:41 pm

nisiprius wrote:
Thu Jul 30, 2020 7:35 pm
Duodecade, eh? Well, I learned a new word today.
I like "dodecahedron" better myself.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by 000 » Thu Jul 30, 2020 7:44 pm

Ferdinand2014 wrote:
Thu Jul 30, 2020 7:40 pm
Given the very high correlation (definitely not returns though) at almost 1 the last 12 years and about .85 the last 20-25 years between developed US and international, why did you choose this and not add emerging?
1. Adequate diversification from single country risk.
2. Risks of investing in emerging markets equity, especially China (40%+ of VWO), seem like they will not be compensated to me. I am only willing to invest in things I either directly control (small business, land) or public investments with strong shareholder protections.
3. Most emerging markets funds are dominated by multinationals that just happen to be domiciled in certain countries. IMO they are likely to perform similarly to the multinationals that dominate US and Developed Markets funds.
4. The best growth opportunities in emerging markets are not investable to me at a reasonable cost. Land, startups, etc. Small-cap emerging markets funds have ERs of 0.60+.
5. VEA ER is 0.05, compare to 0.08 for VXUS and 0.10 for VWO.
6. More qualified dividends.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by dmcmahon » Thu Jul 30, 2020 8:01 pm

abuss368 wrote:
Thu Jul 30, 2020 7:01 pm
dmcmahon wrote:
Thu Jul 30, 2020 6:32 pm
abuss368 wrote:
Wed Jul 29, 2020 9:33 pm
sfmurph wrote:
Wed Jul 22, 2020 10:52 pm
The international (global ex-US) has now had a lost 12 years: from May 2008 to May 2020, the returns are effectively 0%, worse if you consider inflation and tax-drag. Here's a Portfolio Visualizer of ASWX, CWI and VEU, 3 different ETFs tracking non-US.

I do wonder what the US markets would look like without the big growth stocks.
I follow the Two Fund Portfolio of Total Stock and Total Bond as recommended by Jack Bogle and Warren Buffett. We have a great thread going about it. The best part about this strategy is it will never be below average.
I was bitterly disappointed in the returns losses I accumulated in international index funds over 10 years. Largely on valuation, the sinking dollar, and relative COVID-19 response by governments, I'm hearing more buzz about international investing. This heartens me somewhat because I have hung on to some international positions in trust funds that I'm responsible for, even as I personally and publicly bailed out for my own portfolio. I'm open to a well-constructed international growth index but have yet to find one at low cost (EFG is close). Meanwhile I've no cause to regret having left VEA and VXUS for VUG.
It has definitely been a challenging international investment environment. I had invested in intern for even a longer period of time.
10 years is long enough for me to admit I was wrong while still telling myself I’m not performance-chasing. How long are you supposed to cling to an investment thesis to avoid being accused of recency bias on this site? Need you ride a losing position all the way to the grave?

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by Triple digit golfer » Thu Jul 30, 2020 8:26 pm

dmcmahon wrote:
Thu Jul 30, 2020 8:01 pm
abuss368 wrote:
Thu Jul 30, 2020 7:01 pm
dmcmahon wrote:
Thu Jul 30, 2020 6:32 pm
abuss368 wrote:
Wed Jul 29, 2020 9:33 pm
sfmurph wrote:
Wed Jul 22, 2020 10:52 pm
The international (global ex-US) has now had a lost 12 years: from May 2008 to May 2020, the returns are effectively 0%, worse if you consider inflation and tax-drag. Here's a Portfolio Visualizer of ASWX, CWI and VEU, 3 different ETFs tracking non-US.

I do wonder what the US markets would look like without the big growth stocks.
I follow the Two Fund Portfolio of Total Stock and Total Bond as recommended by Jack Bogle and Warren Buffett. We have a great thread going about it. The best part about this strategy is it will never be below average.
I was bitterly disappointed in the returns losses I accumulated in international index funds over 10 years. Largely on valuation, the sinking dollar, and relative COVID-19 response by governments, I'm hearing more buzz about international investing. This heartens me somewhat because I have hung on to some international positions in trust funds that I'm responsible for, even as I personally and publicly bailed out for my own portfolio. I'm open to a well-constructed international growth index but have yet to find one at low cost (EFG is close). Meanwhile I've no cause to regret having left VEA and VXUS for VUG.
It has definitely been a challenging international investment environment. I had invested in intern for even a longer period of time.
10 years is long enough for me to admit I was wrong while still telling myself I’m not performance-chasing. How long are you supposed to cling to an investment thesis to avoid being accused of recency bias on this site? Need you ride a losing position all the way to the grave?
Ten years is a blink of an eye in equity investing terms.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by abuss368 » Thu Jul 30, 2020 8:37 pm

Ferdinand2014 wrote:
Thu Jul 30, 2020 7:40 pm

Given the very high correlation (definitely not returns though) at almost 1 the last 12 years and about .85 the last 20-25 years between developed US and international, why did you choose this and not add emerging?
I feel as if years back there may have been a diversification benefit. However anymore it feels that when the US declines, international declines even more. Perhaps this is a result of our increasingly global economies.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by abuss368 » Thu Jul 30, 2020 8:38 pm

Triple digit golfer wrote:
Thu Jul 30, 2020 8:26 pm

Ten years is a blink of an eye in equity investing terms.
That depends on where each investor is in their journey.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by abuss368 » Thu Jul 30, 2020 8:40 pm

Ferdinand2014 wrote:
Thu Jul 30, 2020 7:31 pm

When I look at portfolio visualizer, using proportions of VTSAX(VTSMX) and VTIAX(VEU) equal to VT, no matter how I slice it, VT underperforms by a lot. Morningstar data (through Fidelity) shows VT underperforms the FTSE global all cap index by almost 2% per annum going back to 2008 inception date. Vanguards website is more favorable, but there is an asterisk saying they use spliced data which seems a bit suspect to me when both portfoliovisualizer and morning* do not. Can someone explain the discrepancy and why you would recommend such a poor performing ETF relative to its benchmark? It seems if I were to include international, I would use separate funds to do so based on the data I see.
Using separate finds would also allow for rebalancing and tax loss harvesting.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by Blue456 » Thu Jul 30, 2020 8:45 pm

abuss368 wrote:
Thu Jul 30, 2020 8:40 pm
Ferdinand2014 wrote:
Thu Jul 30, 2020 7:31 pm

When I look at portfolio visualizer, using proportions of VTSAX(VTSMX) and VTIAX(VEU) equal to VT, no matter how I slice it, VT underperforms by a lot. Morningstar data (through Fidelity) shows VT underperforms the FTSE global all cap index by almost 2% per annum going back to 2008 inception date. Vanguards website is more favorable, but there is an asterisk saying they use spliced data which seems a bit suspect to me when both portfoliovisualizer and morning* do not. Can someone explain the discrepancy and why you would recommend such a poor performing ETF relative to its benchmark? It seems if I were to include international, I would use separate funds to do so based on the data I see.
Using separate finds would also allow for rebalancing and tax loss harvesting.
VT has emerging markets which underperformed.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by abuss368 » Thu Jul 30, 2020 8:48 pm

Blue456 wrote:
Thu Jul 30, 2020 8:45 pm
abuss368 wrote:
Thu Jul 30, 2020 8:40 pm
Ferdinand2014 wrote:
Thu Jul 30, 2020 7:31 pm

When I look at portfolio visualizer, using proportions of VTSAX(VTSMX) and VTIAX(VEU) equal to VT, no matter how I slice it, VT underperforms by a lot. Morningstar data (through Fidelity) shows VT underperforms the FTSE global all cap index by almost 2% per annum going back to 2008 inception date. Vanguards website is more favorable, but there is an asterisk saying they use spliced data which seems a bit suspect to me when both portfoliovisualizer and morning* do not. Can someone explain the discrepancy and why you would recommend such a poor performing ETF relative to its benchmark? It seems if I were to include international, I would use separate funds to do so based on the data I see.
Using separate finds would also allow for rebalancing and tax loss harvesting.
VT has emerging markets which underperformed.
Indeed as it is an all world cap index fund correct?
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by Blue456 » Thu Jul 30, 2020 8:52 pm

abuss368 wrote:
Thu Jul 30, 2020 8:48 pm
Blue456 wrote:
Thu Jul 30, 2020 8:45 pm
abuss368 wrote:
Thu Jul 30, 2020 8:40 pm
Ferdinand2014 wrote:
Thu Jul 30, 2020 7:31 pm

When I look at portfolio visualizer, using proportions of VTSAX(VTSMX) and VTIAX(VEU) equal to VT, no matter how I slice it, VT underperforms by a lot. Morningstar data (through Fidelity) shows VT underperforms the FTSE global all cap index by almost 2% per annum going back to 2008 inception date. Vanguards website is more favorable, but there is an asterisk saying they use spliced data which seems a bit suspect to me when both portfoliovisualizer and morning* do not. Can someone explain the discrepancy and why you would recommend such a poor performing ETF relative to its benchmark? It seems if I were to include international, I would use separate funds to do so based on the data I see.
Using separate finds would also allow for rebalancing and tax loss harvesting.
VT has emerging markets which underperformed.
Indeed as it is an all world cap index fund correct?
Yup.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by 000 » Thu Jul 30, 2020 8:52 pm

abuss368 wrote:
Thu Jul 30, 2020 8:48 pm
Blue456 wrote:
Thu Jul 30, 2020 8:45 pm
abuss368 wrote:
Thu Jul 30, 2020 8:40 pm
Ferdinand2014 wrote:
Thu Jul 30, 2020 7:31 pm

When I look at portfolio visualizer, using proportions of VTSAX(VTSMX) and VTIAX(VEU) equal to VT, no matter how I slice it, VT underperforms by a lot. Morningstar data (through Fidelity) shows VT underperforms the FTSE global all cap index by almost 2% per annum going back to 2008 inception date. Vanguards website is more favorable, but there is an asterisk saying they use spliced data which seems a bit suspect to me when both portfoliovisualizer and morning* do not. Can someone explain the discrepancy and why you would recommend such a poor performing ETF relative to its benchmark? It seems if I were to include international, I would use separate funds to do so based on the data I see.
Using separate finds would also allow for rebalancing and tax loss harvesting.
VT has emerging markets which underperformed.
Indeed as it is an all world cap index fund correct?
Excludes some small caps and China A-Shares.

VT has 8682 stocks. VTI + VEA + VWO has 3531 + 3938 + 5225 = 12694 shares.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by Triple digit golfer » Thu Jul 30, 2020 9:05 pm

abuss368 wrote:
Thu Jul 30, 2020 8:38 pm
Triple digit golfer wrote:
Thu Jul 30, 2020 8:26 pm

Ten years is a blink of an eye in equity investing terms.
That depends on where each investor is in their journey.
Point being, one should expect and prepare for periods of underperformance or poor performance for longer than ten years without bailing on it.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by abuss368 » Thu Jul 30, 2020 9:08 pm

Triple digit golfer wrote:
Thu Jul 30, 2020 9:05 pm
abuss368 wrote:
Thu Jul 30, 2020 8:38 pm
Triple digit golfer wrote:
Thu Jul 30, 2020 8:26 pm

Ten years is a blink of an eye in equity investing terms.
That depends on where each investor is in their journey.
Point being, one should expect and prepare for periods of underperformance or poor performance for longer than ten years without bailing on it.
Depends. An alternative, provided up stream, is that it is different for every investor. There is no hard and fast "rule" as no two investors are alike.

The philosophy is the same but each individual investors strategy is different.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by Cycle » Thu Jul 30, 2020 9:22 pm

I view it the same way I view real estate, I need it for shelter in case of a major storm but I don't expect it to appreciate more than inflation in my lifetime. Well not quite... with international I'd certainly expect above inflation appreciation at some point, but I may be pushing up daisies before that happens.
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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by abuss368 » Thu Jul 30, 2020 9:32 pm

Cycle wrote:
Thu Jul 30, 2020 9:22 pm
I view it the same way I view real estate, I need it for shelter in case of a major storm but I don't expect it to appreciate more than inflation in my lifetime. Well not quite... with international I'd certainly expect above inflation appreciation at some point, but I may be pushing up daisies before that happens.
I have no interest in international returning the same as US. For the additional and higher risks, international should have consistent returns in excess of US.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by 000 » Thu Jul 30, 2020 9:34 pm

abuss368 wrote:
Thu Jul 30, 2020 9:32 pm
Cycle wrote:
Thu Jul 30, 2020 9:22 pm
I view it the same way I view real estate, I need it for shelter in case of a major storm but I don't expect it to appreciate more than inflation in my lifetime. Well not quite... with international I'd certainly expect above inflation appreciation at some point, but I may be pushing up daisies before that happens.
I have no interest in international returning the same as US. For the additional and higher risks, international should have consistent returns in excess of US.
Why does international (ex-Emerging) have higher risk than the US? Thanks.

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Re: Lost duodecade in international (ASWX, VEU, CWI)

Post by abuss368 » Thu Jul 30, 2020 9:37 pm

dmcmahon wrote:
Thu Jul 30, 2020 8:01 pm

10 years is long enough for me to admit I was wrong while still telling myself I’m not performance-chasing. How long are you supposed to cling to an investment thesis to avoid being accused of recency bias on this site? Need you ride a losing position all the way to the grave?
Well said. I think Jack Bogle provided an excellent perspective in his many books on all the risks of international investing and often said it was not needed.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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