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Any recommendations amongst the following (or others) to act as the core for international portfolio (20% of total) with 20+ years to invest. SCHF VEA GWL PID
tp2006, I wasn't familiar with GWL, but it's pretty odd that they can call it "World Ex-U.S." and have basically zero in EMs (unless that's another M* data error).
VEU and IXUS are actual "world ex-U.S." etf's, if that's what you're after and you want it in an index etf package. They're also both cheaper to own than GWL. The Schwab etf is also inexpensive, but again, it's all developed.
PID has done pretty well, but not as well as the best actively managed, open-end mutual funds, and those divvy-weighted indexes can vary a lot from "the market" in sector and country weights, if that's a concern.
If you're not set on 100% index etf investing, you could look for a mutual fund that fits your needs by using the M* fund screener.
Edit: didn't see in time that you're planning on an EM fund too, in addition to the etf's listed.
I'm assuming this is a follow up to the earlier threads asking for portfolio construction advice and you're using an allocation model like cman showed you?
I do like PID because of its quality tilt, but I don't think you can get it without commission. If you're an accumulator that might make dcaing too cost prohibitive.
If you're set on indexing developed markets, look at IEFA. It's free on Fido and gets you some mid and small cap exposure as well. VEA and SCHF only deal in large caps. And, depending on how you want to approach emerging markets, you could just take your 30% international allocation and use either VXUS or IXUS. That'll get you developed, emerging and small all in one place at a low cost. Vanguard free at TD or Vanguard, iShares through Fido. You won't go wrong with any of these.
A caveat to passive international, just to make sure all the bases are covered. Market cap indices, by definition, own proportionately more of the most purchased equities. In the US that can lead to sector outweighting like the late 90s tech boom. Abroad that can lead to whole regions or countries being outweighted. For instance, in the early 1990s, the EAFE was something like 60% Japan. And in emerging markets that means lots of Russian and Chinese state owned firms. Make sure you're comfortable with that before investing. I think many here might tell you to look hard at active em funds.
Yes. This is a follow up to the allocation model that was discussed a few weeks ago by @cman and others. I was looking at around 30% international with about 10% emerging market.
I did take a look at IEFA and IXUS in the mix. But don't seem to have a whole lof of information about these on M*? I looked at ARTGX and FMIJX - the former seems to have 1.5% fees (although equally high return probably negates the fees) and the latter seems to be relative new to hold a major portion of the core international market for long term.
Reply to @tp2006: IEFA and IXUS are iShares new "core" funds. They brought them out when Fidelity and Blackrock agreed to offer the ETFs commission free last year, and only date to 11/2012.
The differences are in the index provider (MSCI for iShares and FTSE for Vanguard), Vanguard's unique "ownership" structure, and the small difference in fees. The returns will mirror one another pretty closely.
Note that the EAFE indices are higher right now than the total world indices because of the inclusion of emerging markets, which have lagged lately.
Though I can't speak for him, I believe @cman's general advice for accumulators is to use index funds for capital appreciation until such time you need funds to provide downside protection. I've chosen a slightly different route, but I can't disagree with him at all. Funds like ARTGX (now closed), FMIJX, DODFX, TBGVX and ARTIX are all excellent in their own right, but you might want to get started with an index and then decide whether to allocate to active funds at a later point when you're more comfortable. My only specific advice would be to include small cap and emerging markets stocks. If you use VEA/VEU, have a look at VSS as well. IEFA/IXUS/VXUS take care of that for you. Simpler is generally better.
Comments
VEU and IXUS are actual "world ex-U.S." etf's, if that's what you're after and you want it in an index etf package. They're also both cheaper to own than GWL. The Schwab etf is also inexpensive, but again, it's all developed.
PID has done pretty well, but not as well as the best actively managed, open-end mutual funds, and those divvy-weighted indexes can vary a lot from "the market" in sector and country weights, if that's a concern.
If you're not set on 100% index etf investing, you could look for a mutual fund that fits your needs by using the M* fund screener.
Edit: didn't see in time that you're planning on an EM fund too, in addition to the etf's listed.
I do like PID because of its quality tilt, but I don't think you can get it without commission. If you're an accumulator that might make dcaing too cost prohibitive.
If you're set on indexing developed markets, look at IEFA. It's free on Fido and gets you some mid and small cap exposure as well. VEA and SCHF only deal in large caps. And, depending on how you want to approach emerging markets, you could just take your 30% international allocation and use either VXUS or IXUS. That'll get you developed, emerging and small all in one place at a low cost. Vanguard free at TD or Vanguard, iShares through Fido. You won't go wrong with any of these.
A caveat to passive international, just to make sure all the bases are covered. Market cap indices, by definition, own proportionately more of the most purchased equities. In the US that can lead to sector outweighting like the late 90s tech boom. Abroad that can lead to whole regions or countries being outweighted. For instance, in the early 1990s, the EAFE was something like 60% Japan. And in emerging markets that means lots of Russian and Chinese state owned firms. Make sure you're comfortable with that before investing. I think many here might tell you to look hard at active em funds.
Good luck.
Yes. This is a follow up to the allocation model that was discussed a few weeks ago by @cman and others. I was looking at around 30% international with about 10% emerging market.
I did take a look at IEFA and IXUS in the mix. But don't seem to have a whole lof of information about these on M*? I looked at ARTGX and FMIJX - the former seems to have 1.5% fees (although equally high return probably negates the fees) and the latter seems to be relative new to hold a major portion of the core international market for long term.
The differences are in the index provider (MSCI for iShares and FTSE for Vanguard), Vanguard's unique "ownership" structure, and the small difference in fees. The returns will mirror one another pretty closely.
Returns of international etfs
Note that the EAFE indices are higher right now than the total world indices because of the inclusion of emerging markets, which have lagged lately.
Though I can't speak for him, I believe @cman's general advice for accumulators is to use index funds for capital appreciation until such time you need funds to provide downside protection. I've chosen a slightly different route, but I can't disagree with him at all. Funds like ARTGX (now closed), FMIJX, DODFX, TBGVX and ARTIX are all excellent in their own right, but you might want to get started with an index and then decide whether to allocate to active funds at a later point when you're more comfortable. My only specific advice would be to include small cap and emerging markets stocks. If you use VEA/VEU, have a look at VSS as well. IEFA/IXUS/VXUS take care of that for you. Simpler is generally better.
Kevin
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