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Which Emerging Markets fund at Schwab?

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  • #16
    Originally posted by Zaphod View Post

    You prefer politically blind stocks? That would be irrational as I said above, political systems, etc...correlate strongly with returns.

    That we have a fair amount of china exposure through large cap is def a consideration of whether you want to specifically own more of it.
    I just buy VTI or VXUS. More accurate statement is that I don't think about the political or social ramifications of those two ETFs.

    Now if the Vanguard portfolio watch introduces a new ESG/political pie chart and starts nagging I need to put X% to be socially conscious who knows?

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    • #17
      Skip emerging markets and invest in the S&P 500 fund /Etf of your choice. Trust me- really

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      • #18
        If you want to take some risk for reward with non-US equities, you could hold SWISX and SFILX to weight some towards SCV. The International SCV should have lower correlation to US markets IMO.

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        • #19
          Originally posted by ShredtheGnar View Post
          If you want to take some risk for reward with non-US equities, you could hold SWISX and SFILX to weight some towards SCV. The International SCV should have lower correlation to US markets IMO.
          looks like sfilx is intl small cap blend, like vfsax at vanguard. have looked for intl small value at vanguard and couldn’t rind anything.
          “. . . And the LORD spake, saying “First shalt thou take out the Holy 401k. Then shalt thou save to 20%, no more, no less. 20% shall be the number thou shalt save, and the number of the saving shall be 20%. 25% shalt thou not save, neither save thou 15%, excepting that thou then proceed to 20%. 30% is right out . . .””

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          • #20
            Investing in a politically agnostic manner does not equate to ignoring political risks for an investment.

            Logically the steps are assessing risk before considering the appropriate return.

            Know what you own. EM has higher risk, not just in the development , compared to US or INTL, but politically it has greater risk. I doubt anyone has a data driven reason to overweight EM expected returns. You might time it. Good luck.

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            • #21
              Originally posted by Tim View Post
              Investing in a politically agnostic manner does not equate to ignoring political risks for an investment.

              Logically the steps are assessing risk before considering the appropriate return.

              Know what you own. EM has higher risk, not just in the development , compared to US or INTL, but politically it has greater risk.
              China and Russia are both unique in being "emerging market" nations which have authoritarian governments, nuclear weapons and the ability to project military power internationally, and of course China is the second largest economy in the world which gives it a great big economic stick as well. I worry less about the political risks in most emerging markets simply because if the political situation goes south in those places (like the recent coup in Myanmar, or the meltdown in Venezuela under Hugo Chavez) its major harm is limited to the locals and the investors who put their money there. It poses no real threat to the United States or to global peace. China under Xi and Russia under Putin are different in that regard.

              (And I absolutely HATE saying that, because at one time there were realistic hopes that both countries would become more democratic. Alas, those hopes have faded for now.)

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              • #22
                Decision made! I've moved the money that was in Vanguard Total International in my retirement accounts over to Vanguard Institutional Index (not a big change, since I only had about 5% of my funds in my retirement accounts in international stocks, and the other international funds available to me in those accounts all sucked). Next up, I'll transition away from Vanguard Total International into Vanguard Developed Markets International over a period of about 3-5 years by a mixture of charitable giving (donating to my DAF, and endowing a scholarship) and selling my shares of Vanguard Total International and putting the money into Vanguard Developed Markets, S&P 500 Index, and Small Cap Index. I have too much money in international stocks relative to my domestic stocks anyway, so this is a good excuse for making the changes as it will re-balance my asset allocation as well as getting me away from ownership (abet indirect) in Chinese and Russian stocks.

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                • #23
                  Originally posted by Tim View Post
                  Investing in a politically agnostic manner does not equate to ignoring political risks for an investment.

                  Logically the steps are assessing risk before considering the appropriate return.

                  Know what you own. EM has higher risk, not just in the development , compared to US or INTL, but politically it has greater risk. I doubt anyone has a data driven reason to overweight EM expected returns. You might time it. Good luck.
                  Yeah, all the data favors setups in DMs, with structures like ours. Its no great mystery either, would anyone realistically put similar multiples or terminal values on companies in the US if the government were to be deciding their paths and levels of success? No way.

                  It absolutely all makes sense but its just not something you usually think about. I'd link a couple of excellent threads on this matter but theyre locked accounts IIRC.

                  Much of the EM boom in 2000s was simply commodity/dollar exposure, which you can get in a pure way so theres no need for it in this regard.

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                  • #24
                    I'm bumping this old thread to point out two articles posted on HumbleDollar which offers a possible alternative for those who want some emerging market exposure but who wish to avoid investments in unfree countries: the FRDM ETF. It is only composed of 100 stocks, so it's not as diversified as most emerging market funds are, and it's a bit more expensive with an expense ratio of 0.49%, but it holds no stocks in Russian, Chinese, or Saudi Arabian companies (to name just three problematic EM nations). One of the people commenting on the more recent article also suggested looking at XCEM ETF as well, as it avoids China.

                    When I finally move my Vanguard account off of the old mutual fund platform and over to the brokerage platform (which will happen sometime this summer), I'll probably put a small percentage of my international money in FRDM.

                    Here are the two articles:

                    Older one: https://humbledollar.com/2020/07/played-for-fools/

                    Newer one: https://humbledollar.com/2022/03/what-price-evil/

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