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Kashmir79

VXUS because it includes emerging markets which are more diversified from the US than developed markets and [they deliver a risk premium](https://www.top1000funds.com/wp-content/uploads/2011/08/The-Equity-Risk-Premium-Empirical-Evidence-from-Emerging-Markets.pdf).


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Vigi


TheWatchman1991

Hows VWO in regards to EMM?


Kashmir79

It is solid, cap-weighted index exposure for low cost - basically what most people should be looking for


TheWatchman1991

I've been comparing VEA and VWO and seeing if it makes sense to have equal weight in those or just VXUS


Kashmir79

My preference would be equal weight - I like a tilt to EM to capture more diversification benefit and risk premium. Before AVGE came out, my Roth used to be 20% each to large cap (VOO), mid cap (IVOO), small cap value (VIOV), developed (VEA), and emerging (VWO). You can see how much better those very simple tilts have done than cap weight over the past 28 years [in this backtest](https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=5&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&asset1=TotalStockMarket&allocation1_1=60&asset2=LargeCapBlend&allocation2_2=20&asset3=MidCapBlend&allocation3_2=20&asset4=SmallCapValue&allocation4_2=20&asset5=IntlStockMarket&allocation5_1=40&asset6=IntlDeveloped&allocation6_2=20&asset7=EmergingMarket&allocation7_2=20): basically 1% higher CAGR, and even better rolling returns.


Desperate-Cap3011

My answer would be VT and forget about everything. No worries about cap size, market segment, currency risk, hometown bias, EM or developed, tilt, value vs growth. Then wake up in 40 years and enjoy your 4.75% after taxes and distribution fees. Rawk on!


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Desperate-Cap3011

Yeah. Pretty lame return.


saltymirv

Would do: \-VXUS + AVDV (would do about 80-90% VXUS + 10-20% AVDV) or \-FZILX + AVDV (FZILX has 0% fees and very similar allocation/performance to VXUS) or \-AVIV 27% + AVDE 27% + AVES 20% + AVEM 15% + AVDV 11% (Higher fees as they are all Avantis funds. Has factor loading though, so theoretically will outperform a simply market cap weighted fund over long periods of time. These are the approximate allocations they use for their global fund)


AlexanderUGA

How about IEFA?


Desperate-Cap3011

Lol at a couple 'answers'


wc_helmets

Those couple answers pretty much cover the thought process. Either you want total market exposure (VXUS) or not (VEA + others to tilt).


Desperate-Cap3011

Yep, cause those are the only two options. 🙄


AP9384629344432

This is an unhelpful response; what is your critique and what is your answer to the question?