Split International Index into High/Low Dividend Components

[zero_coupon]

Regarding US investing, it's easy to replicate VTI with VTV/VUG/VB, such that most dividends are confined to VTV.

Considering international, what's the best/cheapest/simplest way to replicate VXUS by combining two or more "component" funds/ETFs, such that most of the dividends are confined to a single one of those "component" funds/ETFs?

[alluringreality]

Historically Developed usually has more qualified dividends than Emerging or Total International. Turnover also still looks rather low for Developed compared to what's reported for other Vanguard International funds. With mutual funds the expense ratio is slightly lower for a Developed and Emerging split. I worked through some of the forum discussion around estimating taxes, and mainly Developed in taxable with Emerging in tax-advantaged was just a simple split that fit my considerations. I wanted my taxable account to hold only one International mutual fund, yet I'm sure there are more options for International ETFs beyond what I've looked through.
https://advisors.vanguard.com/tax-cente ... end-income
https://investor.vanguard.com/investor- ... ncome-2021

[zero_coupon]

Thanks alluringreality.

How about using EFV/EFG to split MSCI EAFE?

29% EFV
29% EFG
27% IEMG
10% VSS
5% EWC

Not concerned about qualified dividend percentages, just want to segregate dividends as much as possible.

Other options?

[grabiner]

Thanks alluringreality.

How about using EFV/EFG to split MSCI EAFE?

29% EFV
29% EFG
27% IEMG
10% VSS
5% EWC

Not concerned about qualified dividend percentages, just want to segregate dividends as much as possible.

I wouldn't recommend this because you are paying too much in extra expenses in order to avoid dividends. EFV and EFG have 0.34% expenses, and EWC (MSCI Canada) has 0.50%. You can get developed markets with several ETFs for 0.04%-0.06%.

The cost of splitting US stock into growth and value is much lower.

[zero_coupon]

I wouldn't recommend [using EFV/EFG to split MSCI EAFE] because you are paying too much in extra expenses in order to avoid dividends. EFV and EFG have 0.34% expenses, and EWC (MSCI Canada) has 0.50%. You can get developed markets with several ETFs for 0.04%-0.06%.

The cost of splitting US stock into growth and value is much lower.

Yes, EFG/EFV are too costly, I agree. I guess that's why this value/growth split strategy isn't too popular in international equities. Nevertheless, it seems EFV does capture most of the MSCI EAFE dividends as desired. Its dividend yield is 2.92 percentage points higher than its counterpart, EFG.

Here are some current yields, as per Yahoo Finance:

VXUS 3.09%
EFG 1.26%
EFV 4.18%
VEA 2.91%
VWO 4.11%
IEMG 2.70%

Interestingly, note how much higher VWO's yield is than IEMG's. They're both emerging market indexes. The former is FTSE and requires a 25% allocation to approximate total world; the latter is MSCI and requires a 30% allocation.

[grabiner]

Here are some current yields, as per Yahoo Finance:

VXUS 3.09%
EFG 1.26%
EFV 4.18%
VEA 2.91%
VWO 4.11%
IEMG 2.70%

Interestingly, note how much higher VWO's yield is than IEMG's. They're both emerging market indexes. The former is FTSE and requires a 25% allocation to approximate total world; the latter is MSCI and requires a 30% allocation.

This may be a one-time anomaly, based on when some large dividend got assigned to income. The six-month dividend of IEMG and the two three-month dividends of VWO are usually about the same, but the December 2022 dividend of IEMG is much less than the combined September and December dividends of VWO,

The most important difference between the two is that VWO includes China A shares.

[alluringreality]

Other options?

I can't say that any of Vanguard's international growth options fit my personal interests. I'm under the impression that indexed international growth as a category seems fairly limited. EFG basically has an individual category on ETF.com, and I haven't had much personal luck tracking down alternates. Essentially the growth, value, Canada setup is probably as close as I could reasonably expect to come to a VXUS comparison from what I remember looking around at various options a few years ago.

[zero_coupon]

Rather than EFG/EFV, perhaps one could hold one's entire international allocation in AVDV. The expense ratio would be the same, but presumably one could hold less of the fund (than with EFG/EFV) and still have sufficient international exposure. Maybe add some AVES too.