VXUS alternatives?

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rushrocker
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Re: VXUS alternatives?

Post by rushrocker »

In taxable (or tax deferred) accounts here are some funds that might interest you:
VIGI, IGRO, IQLT, DIHP, DEHP

Additional funds I would only consider holding In tax deferred:
SCHY, HDAW, HDEF
BitTooAggressive
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Re: VXUS alternatives?

Post by BitTooAggressive »

adave wrote: Mon Apr 01, 2024 12:40 pm I think I can live without international small caps and still be considered a Boglehead?
Is this a serious question? Would you make investment decisions based on being in some club or something?
BitTooAggressive
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Re: VXUS alternatives?

Post by BitTooAggressive »

TimeIsYourFriend wrote: Mon Apr 01, 2024 2:36 pm
adave wrote: Mon Apr 01, 2024 1:45 pm My perspective is not that I know better than the market. However, having lived in several developing countries in my life, I am not sure I would apply the same level of trust to international markets as I do domestic. I do believe the international markets, especially smaller companies, may be more inefficient relative to US counterparts. I have no evidence for this besides lived experience.

Perhaps there is a role for mild active management in international? I will have a look at the Avantis fund closely.
Small companies make up 4% of VXUS. So if all the small international companies globally all went bankrupt at exactly the same time in some unprecedented event directed by a higher power, VXUS would be down 4% for the day.
Actually an event like that would cause shockwaves through all markets in the world. But I get your point it’s very small in term of the market cap.
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TimeIsYourFriend
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Re: VXUS alternatives?

Post by TimeIsYourFriend »

BitTooAggressive wrote: Tue Apr 02, 2024 5:58 am
TimeIsYourFriend wrote: Mon Apr 01, 2024 2:36 pm
adave wrote: Mon Apr 01, 2024 1:45 pm My perspective is not that I know better than the market. However, having lived in several developing countries in my life, I am not sure I would apply the same level of trust to international markets as I do domestic. I do believe the international markets, especially smaller companies, may be more inefficient relative to US counterparts. I have no evidence for this besides lived experience.

Perhaps there is a role for mild active management in international? I will have a look at the Avantis fund closely.
Small companies make up 4% of VXUS. So if all the small international companies globally all went bankrupt at exactly the same time in some unprecedented event directed by a higher power, VXUS would be down 4% for the day.
Actually an event like that would cause shockwaves through all markets in the world. But I get your point it’s very small in term of the market cap.
And NVDA would go up just cause. :D
"Time is your friend; impulse is your enemy." - John C. Bogle
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beyou
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Re: VXUS alternatives?

Post by beyou »

I switched my core portfolio to Developed Markets for 2 reasons (core being in taxable where I hope to avoid paying tax on cap gain related to sales) :

1) Did not want emerging markets risk held long term if at all. Just do not have confidence in the rule of law, investor/property ownership protections in many countries.

2) emerging markets are also less tax friendly compared to developed markets funds (% qualified dividends much higher in developed market funds).

Note i used VEA and IDEV as tax loss partners and currently hold IDEV. Slightly lower er, slightly better tax-wise, and slightly different definition of what is an emerging market (no Hong Kong in IDEV). These are all positives but my main reason was long ago to take a loss on VEA and swap, IDEV being closest and slightly better alternative.

You can always add emerging markets fund in a roth or other tax advantaged acct, to take those non qual dividends, and make it easy to trade in/out as rebalancing is needed. This assuming you want emg markets at all.
triz
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Re: VXUS alternatives?

Post by triz »

I can understand the appeal to want to have heavier weightings to top companies, but compared to other alternatives, I doubt there would be a significant enough difference in the top weightings because out of the 8000 holdings in VXUS, probably 7500 are weighted *so* little, it's inconsequential and simply window dressing -- that's the reality of any market cap weighted fund.
Florida Orange
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Re: VXUS alternatives?

Post by Florida Orange »

I've been satisfied (not thrilled) with VXUS. I don't believe I know better than the traders and analysts which companies will do well in the future. I think Jack Bogle said something like "just buy the whole haystack". VXUS certainly gives you the whole haystack for the international portion of your portfolio.
Elysium
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Re: VXUS alternatives?

Post by Elysium »

OP,

You may try two Vanguard funds, one index the other one is managed by Wellington mgmt. for Vanguard. They're both (VIAAX, VIDGX) focused on Dividend Growing companies, that means quality, low volatility, large, with a history of growing dividends. One has over 300+ stocks, most are stable well known companies and the other one has about 40 stocks, not a problem IMO since they are large established companies with quality component.
Northern Flicker
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Re: VXUS alternatives?

Post by Northern Flicker »

adave wrote: Mon Apr 01, 2024 12:05 pm VXUS is cheap (0.08 er) with PE ratio of 14 currently. The thing is, the top holdings are very attractive companies such as TSMC, ASML, Novo, LVMH, Toyota etc. These are great companies I would like to hold in my portfolio for the long term. However, there are over 8000+ companies in this ETF, which diluted the high quality international companies imo. I almost feel this is an example for “diworsification” so to speak.

Curious if there are other Boglehead approved options for international exposure? I’d even tolerate a mildly more expensive product. DFAX perhaps?
DFAX has significantly less in the largest stocks you list and large caps in general than VXUS.

If you are rejecting a fund because it lacks exposure to a stock like TSMC, then you should avoid active funds or factor funds. There is no guarantee they will hold the large cap stocks you want in your portfolio for the long term. They have moderate (or higher) turnover. Your best bet to realize that goal is an index fund. My guess is that VEU is your best choice (presently 84% large caps vs 77% large caps for VXUS).
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adave
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Re: VXUS alternatives?

Post by adave »

Just to bookend things, I ultimately decided to stick with VXUS after a lot of research. There is no ideal ETF for me in this space, so will stick it out with VXUS.
BitTooAggressive
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Re: VXUS alternatives?

Post by BitTooAggressive »

adave wrote: Thu Apr 04, 2024 6:57 pm Just to bookend things, I ultimately decided to stick with VXUS after a lot of research. There is no ideal ETF for me in this space, so will stick it out with VXUS.
Good choice.
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