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International Index Funds - get rid of them entirely?
Old 04-02-2016, 07:48 AM   #1
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International Index Funds - get rid of them entirely?

As many of you know, international index funds have massively underperformed the S&P over the past several years. Given that I keep 20% of my holdings in SCHF/OAKIX, it is disappointing to think of "what might have been" had I just plowed this same amount into VTSAX/SCHB.

Granted, the pundits say the future opportunity for the most growth is international, but given the nature of most US corporations (growing global revenues) today are these strictly international funds even a necessity anymore?

Thanks for any comments.
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Old 04-02-2016, 07:54 AM   #2
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Quote:
Originally Posted by coltsfan53 View Post
As many of you know, international index funds have massively underperformed the S&P over the past several years. Given that I keep 20% of my holdings in SCHF/OAKIX, it is disappointing to think of "what might have been" had I just plowed this same amount into VTSAX/SCHB.
If you're a market timer and/or short term investor maybe, though there are plenty of "several year" periods where you would have been $ happier to be in international funds.

Sector rotation, still alive and well...chart below.

It's true that the lines between 'domestic' and 'foreign' have been blurred, many are now global or international. If nothing else, international funds let investors build in a tilt. If no one want international index funds, they will close on their own, without discussion.
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Old 04-02-2016, 08:20 AM   #3
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The goal of international funds is not that you can outperform any other allocation. It is to diversify, so you have asset preservation.

The only way to match the S&P on a consistent basis, is to hold the S&P. You will not be able to trade around to get the highest yielding asset class on a consistent basis.

You can beat the S&P regularly, with continued investments in it, especially when there is a slight dip. This year, should be easier to beat it, assuming no major plunge.
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Old 04-02-2016, 08:33 AM   #4
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There's a discussion on international funds underway, so why don't we move this one there to avoid redundancy and confusion. International has been a real disappointment
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