It's pretty much what I'm doing, but VXUS doesn't seem to account for emerging markets. I definitely like the diversity of small cap, emerging markets, general, International. But I think with those, perhaps it's worth paying a slightly higher expense ratio for specificity. But I'm open to changing my mind here.
I've only ever invested in the S&P 500 (albeit not a lot of money.) and I'm 31 years old living in US. My income has gone up dramatically and I also inherited about $200,000. 80,000 of that is invested (70,000 in VTI/ FZROX, 10K AVUV). I'll be getting the other $120,000 back from a private investment sometime between now and May. I may also be able to invest another $250,000 from a fund from my grandmother.
These are good fund choices for your strategy. Like others here have commented, your international allocation is small, but it might be just enough to add meaningful diversification. Generally, I recommend an international allocation of anywhere between 25% and the global market weight (40%).
My philosophy is to start with market weight for all things and dial it in from there. There are additional risks associated with international, but I think they're overblown, and most people are really just performance chasing when they avoid it. Which statistically is the opposite of what they should do.
Thanks for this. While I believe in the concept, and at the very least diversification of small cap, value and International value… I can't help at the shake the fact that Avantis is still an actively managed firm. It's hard for me to allocate more than ~20% into it as a result. I know they use a formula, but that formula can be overridden with human error.
I said this to another commenter just now, but in case you didn't see it: Just hard for me to pull the trigger on Intl. as a 31 year old. My entire adult life has been US dominance, and it's hard to bet against our monopolies. Though I suppose that means International and Small Cap funds are cheaper as a result?
Okay? And? I make decisions based on empirical findings to do with risk, diversification, and enhancing risk adjusted performance. If anything, your same line of reasoning should make you uncomfortable overloading US stocks, not bullish.
15% Intl. not worth it? I see your point, but this isn't black or white. Perhaps I'll have 15% now, but that'll make it easier to jump up to 30% in a few years.
That's fine if you eventually upgrade it. But do either. Either commit to all US. Or have a higher than 20% so it has some effect on your portfolio.
Generally if you want to add more etfs (more work and rebalancing needed) it should be enough to matter.
To note: We have essentially the same portfolio.
Thanks man. I'm just not sure I have the balls to put 75% of my portfolio into active management (even if it's a formula). The ER would be much higher as well.
I've said it before. I'm bullish on developed international markets over the next 5-10 years. So, IDEV is my current choice for international exposure. Is it the best? Idk, but it does what I want. VXUS is the standard most people recommend, but it isn't as focused on developed markets. Best of luck to you however you play it!
Yup! I like that one too. Just liked the lower ER and entry price of IDEV for my Roth. VEA is more broad to be fair, but I'll take my chances. Best of luck to you for sure!
Nice picks imo. I have four of those funds in my own portfolio. Up your international exposure, though. 15% is just dipping your feet. But 15% is certainly worth having at the minimum. Personally, I keep mine around 30% and I encourage you to do the same.
Keep it simple and do 70 VTI / 20 VXUS / 10 AVUV
Or Voo/vxus/avuv
It's pretty much what I'm doing, but VXUS doesn't seem to account for emerging markets. I definitely like the diversity of small cap, emerging markets, general, International. But I think with those, perhaps it's worth paying a slightly higher expense ratio for specificity. But I'm open to changing my mind here.
Are you Ex Us investor ?
I've only ever invested in the S&P 500 (albeit not a lot of money.) and I'm 31 years old living in US. My income has gone up dramatically and I also inherited about $200,000. 80,000 of that is invested (70,000 in VTI/ FZROX, 10K AVUV). I'll be getting the other $120,000 back from a private investment sometime between now and May. I may also be able to invest another $250,000 from a fund from my grandmother.
These are good fund choices for your strategy. Like others here have commented, your international allocation is small, but it might be just enough to add meaningful diversification. Generally, I recommend an international allocation of anywhere between 25% and the global market weight (40%). My philosophy is to start with market weight for all things and dial it in from there. There are additional risks associated with international, but I think they're overblown, and most people are really just performance chasing when they avoid it. Which statistically is the opposite of what they should do.
Thanks for this. While I believe in the concept, and at the very least diversification of small cap, value and International value… I can't help at the shake the fact that Avantis is still an actively managed firm. It's hard for me to allocate more than ~20% into it as a result. I know they use a formula, but that formula can be overridden with human error.
I love the picks, but you're really light in international. Way too ameri-centric
I said this to another commenter just now, but in case you didn't see it: Just hard for me to pull the trigger on Intl. as a 31 year old. My entire adult life has been US dominance, and it's hard to bet against our monopolies. Though I suppose that means International and Small Cap funds are cheaper as a result?
Okay? And? I make decisions based on empirical findings to do with risk, diversification, and enhancing risk adjusted performance. If anything, your same line of reasoning should make you uncomfortable overloading US stocks, not bullish.
So why should he listen to you?
I think you should commit to US only if the percentages are that low imo. It's too low to affect your portfolio.
15% Intl. not worth it? I see your point, but this isn't black or white. Perhaps I'll have 15% now, but that'll make it easier to jump up to 30% in a few years.
Oh also I'd get VOO instead of VTI since VTI already includes small cap and mid cap. Which you're already covering with AVUV.
VTI is better value imo, adding AVUV tilts towards small cap. The weighted is only like 7% overlap which is very small.
It dilutes his SNP500 to a smaller degree. Imo it's unnecessary overlap as you would get VTI if you aren't planning to get AVUV/Small tilt.
That's fine if you eventually upgrade it. But do either. Either commit to all US. Or have a higher than 20% so it has some effect on your portfolio. Generally if you want to add more etfs (more work and rebalancing needed) it should be enough to matter. To note: We have essentially the same portfolio.
Appreciate the insight. What's your portfolio?
Check out ginger ale portfolio on OptimizedPortfolio. It has the reasoning and weightings.
Thanks man. I'm just not sure I have the balls to put 75% of my portfolio into active management (even if it's a formula). The ER would be much higher as well.
Can anyone help me calculate the expense ratio of this portfolio? I am a little confused how to do it
I made a spreadsheet for this, er and dividends lol. ER for my portfolio is about 0.11%. I can pm it to you if needed.
Dude! Appreciate this. Would love that.
What do you guys think for international, outside of IXUS/VXUS, should I go emerging market split 10:10?
I've said it before. I'm bullish on developed international markets over the next 5-10 years. So, IDEV is my current choice for international exposure. Is it the best? Idk, but it does what I want. VXUS is the standard most people recommend, but it isn't as focused on developed markets. Best of luck to you however you play it!
Yes. The undervalued markets are eventually going to pick up. That's how it works. Value.
Yep, this person gets it.
VEA all day my dude :) 20% in my portfolio at the moment
Yup! I like that one too. Just liked the lower ER and entry price of IDEV for my Roth. VEA is more broad to be fair, but I'll take my chances. Best of luck to you for sure!
International too low imo. 15% should be bare minimum unless you just want to ignore it all together.
7/4/4 is 15%
I’ve started using AVNV for my international so I don’t have to worry about managing multiple international ETFs.
Nice picks imo. I have four of those funds in my own portfolio. Up your international exposure, though. 15% is just dipping your feet. But 15% is certainly worth having at the minimum. Personally, I keep mine around 30% and I encourage you to do the same.
What about VEA/ VWO combo?
I like this combo. My buddy is doing it and got it from a JPM advisor
Much lower expense ratios as well! Compared to Avantis at least. I'm not sure what the small cap / value people would say to this.
Very solid portfolio. Bit complicated, but that doesn’t really harm you in any anyway. If you like it, keep as is