international funds

[Shredder]

I'm setting up a IRA with Vanguard using the coffeehouse  portfolio more or less. I am thinking of going 30-35% international. Any suggestions on funds to pick from V. ? Right now I'm considering 50-50 between international growth and international value keeping it like the coffeehouse method for domestic stocks. Pros, cons, suggestions? This will be  untouched for ten years (hopefully) except for rebalance..........Shredder

 

[brewer12345]

Is there some reason you wouldn't simply index? Cheap, proven, easy to do at VG.

 

[cute fuzzy bunny]

VG has an international growth index and value index. At least I think they're indexes.

Both have good long term records and good country distribution. You could do lots worse than buying 50/50 and balancing every 1-2 years. A little higher ER than buying pacific and europe indexes separately but the growth/value funds significantly outperform those.

 

[ats5g]

Vanguard's Int'l Growth and Int'l Value are not index funds, they're actively managed. Low ER's, but higher turnover [and trading costs].

Personally, I use International Index funds and tilt towards small and value in my US equities. Value is value the world around.

- Alec

 

[Whakamole]

Dodge and Cox International is a FANTASTIC fund, and expenses are very low (almost as low as Vanguard.)

I have Fidelity Diversified Int'l for my growth fund now, expenses are a tad high but it's got a great record, plus it's in my 401k.

 

[wildcat]

I 2nd the Dodge and Cox---large cap value tilted

Vanguard's Int'l Growth and Int'l Value are not index funds, they're actively managed. Low ER's, but higher turnover [and trading costs].

I don't think it is a terrible idea to look at Intl' Value. Tracks the international value index which I think is what Notth (or TH) meant. Value outperforms over the long run.

 

[unclemick]

I don't know about that - BUT the Dodge and Cox funds - top ten holdings are one place I check frequently for dividend stock ideas.

Dodge and Cox has been around since the 1930's - and are an old respected 'value house' with a good track record. If that carries over into international - well one could easily do much worse.

I think that be a left handed compliment.

 

[Whakamole]

An alternative is Oakmark International (OAKIX.) Expenses are a bit higher, but many fund houses have it as NTF.

Oakmark actually is more "value" now - lower PE and a higher yield.

 

[wildcat]

Dodge and Cox is really one of the few actives I respect.  Same value approach applies to the International Fund---DODFX.

As often as we recommend 4 Pillars I do believe Bernstein mentions the Vanguard Intl Value as a decent idea despite it being actively managed for the reason stated above.

 

[Bookm]

Greetings Shredder. If you're considering instituting a variation on the Coffeehouse Port, which recommends a 10% allocation in int'l, there may be another option. Vanguard also has an index fund for emerging markets - VEIEX, couple that with VTRIX, and you'd be using the value and small-cap (relatively so) premium that has been prevalent in historical returns.

Bookm

 

[JPatrick]

I agree that you need emerging market exposure and VEIEX is a decent way to do that.
Fidelity has an excellent fund for foreign small cap. FISMX. (great record) The fidelity index fund is good and importantly it has a 10 BP expense ratio.

 

[wildcat]

I believe the Fidelity small cap intl is now closed.  Investors have been throwing some serious cash into small cap intl funds.

Shredder if you can wait a bit and like the idea of ETFs iShares is coming out with a Value and Growth Intl ETF. Expenses should be as low or lower than Vanguard's Intl Value.

 

[JPatrick]

I believe the Fidelity small cap intl is now closed.  Investors have been throwing some serious cash into small cap intl funds.

Yep it is closed. That one got by me.  Not to worry, another great fund is the Canada Fund  FICDX

 

[cute fuzzy bunny]

Vanguard's Int'l Growth and Int'l Value are not index funds, they're actively managed. Low ER's, but higher turnover [and trading costs].

Personally, I use International Index funds and tilt towards small and value in my US equities. Value is value the world around.

- Alec

You're correct...I thought they tracked a value and growth index but perhaps they dont.

I went with value myself just yesterday, exchanging my europe and pacific for the intl value fund. The growth fund has a better 10 year record, but most of the outperformance was 8-10 years ago when the stock markets were thumping along without underpinnings. More recent (and rational) performance gives intl value a signficant edge over intl growth and total intl. I think for longer term holdings, intl value has the same benefits as domestic value.

 

[preben]

I also picked VTRIX (Vang. for value) for my foreign developed part - BUT my first choice was dodge and cox DODFX - they would however not let evil non-resident aliens like me own their fund - even through a US broker... sniffle.... Ironic; foreign fund not allowed to be owned by foreigners.... :