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There is some good discussion and comparison at this Bogleheads thread. One interesting point is that Vanguard's emerging markets fund VEIEX is expected to lose South Korea because FTSE classifies it as a developed market. VEIEX has a 15.5% weight in South Korea so selling off this chunk could mean some tax consequences for VEIEX investors and missing out on a big piece of the Asia market.
Reply to @claimui: Thanks for the link to the Bogleheads discussion, which parses the issues folks are concerned with. Especially at bottom of page 2 of the comments, "ClosetIndexer" ran a comparison of some MSCI and CRSP indices on size and value loadings.
The impact of plugging in the CRSP for VTI (and presumably VTSAX etc) will be minimal since the index has a huge number of constituents. The impact of dumping MSCI from VWO (Emerging Markets) is more substantial; there is much less correlation between the MSCI and ENEI EM indices. See my previous comment at http://www.mutualfundobserver.com/discussions-3/#/discussion/comment/15947. I think eventually it will cost me more in increased volatility than the point-0-something percent in expense savings.
Comments
Yes the regression analysis shows CRSP indices are pretty close drop-ins to MSCI domestic indices.
The international swap will be a bit more significant but probably not enough to make large behavioral differences either.
So, the loss is really for MSCI and stock price took a hit of close to 30%
Previous discussion on same subject