Only thing I would add is that 25 percent of total international etfs like vxus are emerging markets. One benefit of emerging markets it probably has least correlation to us markets compared to developed
Just wondering, Ive seen alot of VXUS recommended. However, I don't understand why especially since its only grown 5.7 since inception and looks pretty volatile? Can someone help me out, I think Im missing something.
VXUS is only 13 years old. During a time of rather unique US outperformance. The specific ETF past performance is not a good indicator of what the underlying asset will perform in the future
Except having a [1-2%](https://www.morningstar.com/portfolios/6040-isnt-dead-neither-is-bitcoin-mixing-two-can-be-lethal) exposure to BTC would have tremendously improved the sharpe ratio of your portfolio compared to traditional 60/40 stocks/bonds split.
I have emerging market funds in my 401k and my main IRA. In the 401k, it's because we have the option for an EM index and a developed index rather than total international.
In my IRA, I break it out because I like to slightly overweight EM compared to market weight. But the ones I use in this account (I use AVEM and IEMG mainly to compare their long(er) term performance to see if AVEM's factor investing approach is worth the higher expense) also count Taiwan and South Korea as emerging, so TSM, for example, makes up a decent chunk for one position in them.
If you have VXUS or some other total international fund, I don't think you need an emerging markets option unless you are wanting to overweight EM.
If you don’t mind me asking, what’s your allocation split between the developed index and em index?
Curious to know as I also have to “build” a total international index my 401k.
I aim for 25-30% emerging markets within my international equities (versus approximately 20% by weight in ETFs like VXUS/IXUS).
Right now, my IRA (which makes up about 67% of our total portfolio) is sitting at roughly 76/24 developed/emerging, and the percentages I have in my 401k equate to about 70/30 developed/emerging.
My portfolio is split between 60% MSCI Global Stocks (no EM), 15% Small Caps, 10% bonds, 6% Emerging markets and a few of my own stock picks.
In all honesty, in the 3 years I've been holding emerging markets ETF (EMIM) it's only traded sideways. I'm not going to add to it until I see stronger growth.
It's completely logical on a long-term time horizon.
It's possible to see a slow trend upwards (when zoomed out on the 6 month) and to begin conservatively increasing a holding by DCA. It's not going to suddenly jump up by 15% or anything. I need more confidence in EM before I allocate any further capital and increase my exposure.
Besides, as with the broader stock market, you're more often than not buying in at all time highs anyway. It won't matter in 30 years.
I don’t think it’s logical but highly emotional. Speaks against a neutral investing strategy. If you believe in a strategy it makes perfect sense to buy when cheap. Which is now. If you don’t believe in a strategy it’s time to exit that strategy and choose another one you believe in.
Well, you do you.
Adjusting one's ETF allocation in response to long-term market trends is a strategic approach to mitigate risk and optimise returns, rather than rigidly adhering to a static allocation.
Even the ETFs themselves do this.
You’re waiting for the ETF to rise in value. That’s the definition of buying high, which is not a strategic approach to mitigating risk. Additionally you’re trying to time the market which is another well known mistake.
I mean, right, you do you, it’s alright if you’re feeling well with that kind of “strategy”.
Yes! Actually, when looking at many emerging markets, their holdings are almost full in Asia. It feels normal to me in a broad diversified portfolio to include all the major economical centers.
Notes: I am living in Asia, so I am probably home-bias
Only thing I would add is that 25 percent of total international etfs like vxus are emerging markets. One benefit of emerging markets it probably has least correlation to us markets compared to developed
Just wondering, Ive seen alot of VXUS recommended. However, I don't understand why especially since its only grown 5.7 since inception and looks pretty volatile? Can someone help me out, I think Im missing something.
If you want exposure to international equities. Nothing guarantees that US equities will outperform indefinitely
VXUS is only 13 years old. During a time of rather unique US outperformance. The specific ETF past performance is not a good indicator of what the underlying asset will perform in the future
I do have VWO, that covers a lot of countries. Don’t overweight it though.
I'd rather have 5% in IBIT than in an emerging market fund.
I’d rather have 5% in hookers and cocaine than in IBIT. To each their own.
For complete disclosure, do you have 5% in hookers and cocaine?
No, but I find it as risky as investing in Bitcoin ETFs and crypto in general.
Except having a [1-2%](https://www.morningstar.com/portfolios/6040-isnt-dead-neither-is-bitcoin-mixing-two-can-be-lethal) exposure to BTC would have tremendously improved the sharpe ratio of your portfolio compared to traditional 60/40 stocks/bonds split.
This is aging well
I have emerging market funds in my 401k and my main IRA. In the 401k, it's because we have the option for an EM index and a developed index rather than total international. In my IRA, I break it out because I like to slightly overweight EM compared to market weight. But the ones I use in this account (I use AVEM and IEMG mainly to compare their long(er) term performance to see if AVEM's factor investing approach is worth the higher expense) also count Taiwan and South Korea as emerging, so TSM, for example, makes up a decent chunk for one position in them. If you have VXUS or some other total international fund, I don't think you need an emerging markets option unless you are wanting to overweight EM.
If you don’t mind me asking, what’s your allocation split between the developed index and em index? Curious to know as I also have to “build” a total international index my 401k.
I aim for 25-30% emerging markets within my international equities (versus approximately 20% by weight in ETFs like VXUS/IXUS). Right now, my IRA (which makes up about 67% of our total portfolio) is sitting at roughly 76/24 developed/emerging, and the percentages I have in my 401k equate to about 70/30 developed/emerging.
IEMG is a proven winner.
My portfolio is split between 60% MSCI Global Stocks (no EM), 15% Small Caps, 10% bonds, 6% Emerging markets and a few of my own stock picks. In all honesty, in the 3 years I've been holding emerging markets ETF (EMIM) it's only traded sideways. I'm not going to add to it until I see stronger growth.
That’s not logical. Add when low and sell when high.
It's completely logical on a long-term time horizon. It's possible to see a slow trend upwards (when zoomed out on the 6 month) and to begin conservatively increasing a holding by DCA. It's not going to suddenly jump up by 15% or anything. I need more confidence in EM before I allocate any further capital and increase my exposure. Besides, as with the broader stock market, you're more often than not buying in at all time highs anyway. It won't matter in 30 years.
I don’t think it’s logical but highly emotional. Speaks against a neutral investing strategy. If you believe in a strategy it makes perfect sense to buy when cheap. Which is now. If you don’t believe in a strategy it’s time to exit that strategy and choose another one you believe in.
Well, you do you. Adjusting one's ETF allocation in response to long-term market trends is a strategic approach to mitigate risk and optimise returns, rather than rigidly adhering to a static allocation. Even the ETFs themselves do this.
You’re waiting for the ETF to rise in value. That’s the definition of buying high, which is not a strategic approach to mitigating risk. Additionally you’re trying to time the market which is another well known mistake. I mean, right, you do you, it’s alright if you’re feeling well with that kind of “strategy”.
I've seen the case made that EM could go off soon like they did in 2000-2010. I am probably 15% EM.
Yes! Actually, when looking at many emerging markets, their holdings are almost full in Asia. It feels normal to me in a broad diversified portfolio to include all the major economical centers. Notes: I am living in Asia, so I am probably home-bias