Rich,
Using total international you lose the foreign tax credit (it is not allowed to pass through). This is worth in the neighborhood of 0.1% of your holdings each year. For that reason alone, you should own the individual indexes (assuming taxable account here).
But wait, there's more! by owning them individually, you have more opportunities for tax loss selling.
And you can protect yourself against bubble valuations (ala Japan which in 1989 was 2/3 of the EAFE index, now it is around 25%).
Less importantly, but still important, you can buy the individual components as ETFs with expense ratio of only 0.18%.
I have usually held about 35% pacific and 65% Europe, which is actually a slight overweighting of pacific. (I think a year ago EAFE was 30/70, not it is about 31.2, 68.8, I think). Pacific is basically a Japan fund. Some people recommend holding equal developed euro/pac but I have never bought that argument, I tend to only stray a little from market weightings. Unfortunately, only about 56% of pacific dividends are qualified this year (2006), so that could be a bit of a tax issue for you. The Euro fund has about 79% qualified dividends.
One more note, total international also includes emerging markets. For the same reasons as above, you should also own this separately (VEIEX/VEMAX fund or the ETF/Viper is called VWO). VWO has about 65% qualified dividends.
Re: correlation, there has been unusually low correlation since 1989 because of so much country-specific risk showing up in Japan. In the long term, I would expect much higher correlation than the last 17 years (perhaps .8-.9 going forward?). In the Euro zone, there is the EU free trade zone as well as geographic locality to keep those economies tied closer together and less closely to Japan.
Kramer
