International investing

[lucas]

I currently invest mostly in VFWAX (total non-US) for my international exposure, however am considering breaking it down into Pacific, European, and Emerging Market funds to benefit more from rebalancing instead of the floating exposure that the single fund seems to operate on.

Just wondering what others with more experience and knowledge think about this approach as this will obviously result in a bit more work on my end.  And I'm all about keeping it simple especially if the potential reward from the realignment is minimal.  Thanks.

[jfoxcpacfp]

I agree that an emerging market component can be beneficial for long-term international diversification. Don't know that I would recommend 4 different funds, though.

[lucas]

Not 4 funds, 3.  Reason I want to break it into 3 separate funds is to ensure I'm obtaining the rebalancing gains from their variable correlations.  Just not sure what significant gain I will get from this.

[jfoxcpacfp]

Sorry, thought you were keeping the original, too. I think there will be no significant gain over the long term in exchange for the added complication. Would add the emerging markets and keep the current fund.

[PhysicianOnFIRE]

There should be some rebalancing going on with VFWAX. You just don't see it.

I have held separate funds, but not for rebalancing.

I own emerging markets separately to tilt with a heavier than market cap exposure within international.

I have tax loss harvested out of total international to separate developed and emerging market funds.

I further TLH'd from developed markets to European and Pacific Funds.

I later had the opportunity to reconsolidate back into a total international fund, and continue to hold an additional emerging market fund.

[Zaphod]

Agree. I think the only thing you will gain is an increase in expenses. No need to over think these kinds of things, especially when you will likely just end up with a group of funds that mimics the one you left. If the point is international diversification, then one is all you need.

[G]

I use a modified Gone Fishin Portfolio in my taxable and have all 3.  I rebalance by adding new money every quarter.  There are minor variations in the pricing (I might add $600 to Europe to get to the same level as Pacific).  Whether or not it makes a money difference, I think it is fun.  If you're "all about keeping it simple" then stick with VFWAX.