Foreign Fund holdings & dollar hedges Redux

[RobLJ]

This is a revision of an earlier post (from June 2025) on foreign fund holdings.

1. I have about 26 funds spread across 5 accounts. 9 are foreign/international. Looking at Quicken today, other than 4 individual stocks, my 7 YTD highest return holdings are foreign/international, and the 10th is EADOX (emerging market debt, up 2.9% YTD).
I'm trying to reduce the number of funds, partly by implementing a 4% minimum and partly by trying to improve holdings.

Any favorite foreign fund holdings?

2. As another thought, I have a large position in PIPAX--which has done well for me over the last 5&1/2 years. It is dollar hedged. As you may have guessed, YTD it has done well, but anywhere from 1/2 to 3/4 below the other foreign funds.

Do you prefer unhedged foreign funds, hedged or (like me) both? Going forward? Funds to consider?
(I am thinking of moving half of PIPAX to unhedged, as a dollar hedge and to avoid going the gold/silver route, whose train has left the station I think).

3. The so-called rotation from Ai/MAG7 to small/mid/value and to foreign has occurred over the last year (My 2025 best performers were foreign).

Will it continue/should active investors diversify into foreign/dollar alternatives? Or continue to Bogle (large American corps are enough foreign diversification--sorry for the over-simplified phrase summary, Bogleheads).

 

[COcheesehead]

Favorites that hold a good portion of international:

THOAX equity fund, up over 40% in the last year. Over 7% YTD
SGENX equity and gold fund, up over 31% in the last year. Also over 7% YTD
EGRAX, bonds, up over 20% in the last year, 4% YTD.

 

[RobLJ]

I'm looking at Quicken, but perhaps of interest to some:

FPBSX (Fidelity Pac Basin Fund), up 10.5% YTD
MISAX (Victory Trivalent International Small Cap), up 9.4% YTD, 51% YOY
FIGRX (Fidelity Intl Discover, a longtime core holding), up 8.6% YTD
SCHF (Schwab International in taxable--Old Shooter will love this), 7.5% YTD, 38% YOY

I have about 70k freed up in the taxable brokerage once my 403b withdrawal clears, so I'm probably putting 20k in SCHF next week.

Edit: MISAX is interesting, since I bought it in 2022 to intentionally increase foreign holdings and..... it did nothing for 3 years. I had FPBSX for many years, sold then rebought in early 2024, again to increase foreign. Lucky (up 49% in two years).

 

[Koolau]

I just use one Vanguard fund for all OUS. VFWAX IIRC.

Why so many funds if I may ask?

 

[Markola]

Psssst…VT.

 

[RobLJ]

I think VT is the equivalent of SCHF, and a great option.
In terms of your question about fund numbers we have 5 big accounts (actually 6), one taxable. While it is irrational, I spread US/foreign across all accounts while were we working and over then the last 10 years after semi/full retirement.
Since two of those are my 403b, I can rationalize those and consolidate, probably over the next 3 years, particularly since I intend to draw those down in advance of RMDs (DW is 5 years younger, so she may bear the brunt of RMDs). Actually, preparing/rationalizing the drawdown of the small optional account is my #2 priority, but I'm thinking it will take 3 years so not a do-now priority.
I will consolidate DW's smaller Etrade into her Fidelity, as I did her Vanguard a couple years ago. (The Vanguard Capital OPP is one of two funds I have kept from her Vanguard fund, but it probably will go this year, as consolidation proceeds).
DW worked for many corporations as an accountant and had many rollover IRAs. My two accounts are the base 403b and the optional (additional non-taxed withdrawals). Closing out my 403b, however, would prevent DW's health coverage under my state employee retirement, but eventually I will reduce it to the main account at a much reduced level, as and if we convert her main IRA to Roths.
It all gets very tricky, to simplify, given the tax code situation. I'm sure I will screw something up.

 

[COcheesehead]

I wonder though with the fall in the dollar if the biggest gains may already be behind us.

 

[RobLJ]

I wonder though with the fall in the dollar if the biggest gains may already be behind us.

Yes, that is the main question. Several have posted the charts of the USX, showing the inexorable rise over the last 10 years, versus the last 18 months.
Myself, I am hedging the dollar through international. I cannot argue against the opposite, because I think dollar/foreign movements, like stock, are unknowable. I "think" the dollar is going to trend down, but I don't "know" that.
I will say that a lot of investors here think the immutable dollar will continue, since it triumphed the last 10 years. I am skeptical but not convinced by myself, but hedging a bit might be prudent.
Edit: I will add a note that market requirements for emerging market debt are a lot more restrictive than requirements on US debt (deficit, etc).

 

[COcheesehead]

Yes, that is the main question. Several have posted the charts of the USX, showing the inexorable rise over the last 10 years, versus the last 18 months.
Myself, I am hedging the dollar through international. I cannot argue against the opposite, because I think dollar/foreign movements, like stock, are unknowable. I "think" the dollar is going to trend down, but I don't "know" that.
I will say that a lot of investors here think the immutable dollar will continue, since it triumphed the last 10 years. I am skeptical but not convinced by myself, but hedging a bit might be prudent.
Edit: I will add a note that market requirements for emerging market debt are a lot more restrictive than requirements on US debt (deficit, etc).

That’s why I like global funds vs just international. If the sails need adjusting the pros behind the funds can do it without my input, which would probably be wrong. LOL.

 

[RobLJ]

That’s why I like global funds vs just international. If the sails need adjusting the pros behind the funds can do it without my input, which would probably be wrong. LOL.

Yea, as I consolidate (over the next 5 years), that's worth considering. right now, internationals complicate the allocations.
Other than the Great Financial Crisis, I have never worried much about currency risk, other than the last 2 years. We probably should have a currency thread, but I wouldn't be qualified to post on it--LOL.

 

[COcheesehead]

Yea, as I consolidate (over the next 5 years), that's worth considering. right now, internationals complicate the allocations.
Other than the Great Financial Crisis, I have never worried much about currency risk, other than the last 2 years. We probably should have a currency thread, but I wouldn't be qualified to post on it--LOL.

I try and stay in my lane and it’s pretty narrow.

 

[indiajust]

I prefer direct indexing accounts on the taxable side, instead of funds/etfs. Tax loss harvest, auto rebal, effortless. One account indexes SCHK, the other EAFE.
That takes care of 1/3. I have 10% in cash, 10% each in METL and PHYS. The only other fund I use is for S Korea, EWY. Since the smaller stuff is missing from EAFE, I own FNDC and SCHC to fill that bucket. Crypto for me is FBTC, no interest in doing it personally.

I put my income into the IRA. So that has JEPI, JEPQ, and CBYYX. Plus more METL and PHYS. I treat metals as inflation insurance.

My brother uses public.com as brokerage. It has over 100 offered indexes to follow as a direct index account. if I find a sector or theme I like that has a respectable index to follow, I might be tempted. They work for autopilot section of the portfolio.

 

[Mr_Pink]

Never heard of CYBYYX before, but that fund's strategy of buying extreme risk seems fascinating. Thanks for mentioning this fund. Owing this means you're getting paid, in a sense, to be slightly correlated to weather + seismic cycles!

 

[indiajust]

Never heard of CYBYYX before, but that fund's strategy of buying extreme risk seems fascinating. Thanks for mentioning this fund. Owing this means you're getting paid, in a sense, to be slightly correlated to weather + seismic cycles!

Someone Noticed! I would modify your statement oh so slightly. Insurance pays well in times of maximum fear. (similar to equity markets, forward returns look best at times of despair and capitulation) Getting paid almost 10% on a completely uncorrelated (relative to financial markets) investment! If you want to hedge your war on weather risk, I am here to take your money. In my tour of alternative assets, Catastrophe Bonds, managed within a large fund, are one of the few Alts that drew my attention and fit my needs. Far too risky to do one, thing of beauty in slices, if well managed.

 

[indiajust]

The fee structure is a bit cruel, but I accept that as price of admission to a new asset class that is opening to retail bums like me.