What percentage of total invested assets in foreign equities?

[aja8888]

No foreign equities or bonds here.

 

[PatrickA5]

18.2% of total investable assets. I haven't changed anything in a few years, so it probably cost me in the past, but what do I know? This is mainly due to using Target Date funds for most of my retirement accounts.

 

[marinauser]

8% of total assets and 13.5% of equities.

 

[lem1955]

Like Jonathan Clements and William Bernstein I think the default stock allocation should be global. Vanguard's VT gets you there and by automatically rebalancing keeps you from monkeying with things, or to save a few basis points and get the foreign tax credit you can use 65% VTI:35% VXUS.

There are literally hundreds of pages of debate about exact percentages, whether a US investor needs any int'l at all, etc. on the Bogleheads forums. One thing's for sure, 15+ years of US outperformance have blinded many to the long periods when international has outperformed and the cyclical nature of trends.

Personally I have increased my international from 20% to global market weight because I believe that current government policies have greatly accelerated already extant trends of waning US market and currency dominance with other major powers picking up the slack. This neutral, "nobody knows nuthin'" approach isn't exactly radical: Vanguard's own target retirement and LifeStrategy funds have used 40% in international equities and 30% in international bonds for many years.

kevink: Thanks, this is the clearest representation of my thinking that I've seen anywhere. I don't believe it is "market timing" to make small adjustments to portfolios, especially in order to increase diversification.

 

[Flieger]

kevink: Thanks, this is the clearest representation of my thinking that I've seen anywhere. I don't believe it is "market timing" to make small adjustments to portfolios, especially in order to increase diversification.

That would be true, also IMO. You didn't say in your OP how much you were transferring from domestic to international. I guess I took from your "reason" provided, which is recent (3 Current U.S. administration policies, politics.) that it would be a more significant switch.

Flieger

 

[Al18]

You folks that don’t have any international funds are missing out on a huge international rally this year. SP500 is up 2.5% YTD, but the Fidelity International funds FSPSX and FSGGX is up 19.0% and 16.3% YTD

 

[sengsational]

Yeah, everyone needs to pile-on so my next rebalance will be even better Maybe that will make up for 5 of the 15 lackluster years.

 

[lem1955]

That would be true, also IMO. You didn't say in your OP how much you were transferring from domestic to international. I guess I took from your "reason" provided, which is recent (3 Current U.S. administration policies, politics.) that it would be a more significant switch.

Flieger

My allocation went from 14% of my portfolio to 18%. Percentage of equities went from 20.9% to 34.6%.

 

[bloom2708]

~0%, 0%.

 

[Exchme]

Currently 17% foreign equities, 17% bonds, 66% domestic equities. Each year that SS approaches, we are working down the bond holdings. I spent the last several years with more international and have been working my allocation to it down. I have no intention of buying more or even rebalancing into it.

The US has evolved into the place in the world with growth stocks and their valuations dominate the US market. When you buy foreign companies, there's a lot more oil, minerals & manufacturing that are capital intensive, cyclical, low margin businesses. So domestic/foreign has becoming a growth vs. value type of split. Factor in horrible demographics overseas and lots of intrusive governments, the trend could continue or get more pronounced.

 

[GravitySucks]

Went from 20% to 15% right before the run up.

 

[sengsational]

Factor in horrible demographics overseas and lots of intrusive governments, the trend could continue or get more pronounced.

I've been trying to use the "freedom investing" that I first learned about on Marotta on Money decades ago. When I first got into it, it was much more tedious than the simplified version I have now. Getting lazy. I felt better about not optimizing my own return because I was investing in/rewarding places in the world that places a higher value on freedom and the rule of law.

 

[N02L84ER]

6.5% of total portfolio, 11.3% of equities

 

[YellowSubmarine]

I must be getting up there. First time I ever seen this remark from Fido...too much stock? I am at 3% per FIDO.

 

[DrRoy]

Nearly nothing for 30 years. I know they’re doing better recently, but I’m so far ahead it could virtually never catch up.

 

[Midpack]

8.7% of my total AA, 15.2% of my equity holdings. 11 year ago I had a significantly higher allocation to equities, and 30% was international. Don't do either anymore.

 

[Steve P]

I've recently decreased my allocation to domestic equities and increased to developed country foreign equities. What percentage of total invested assets do you have in foreign equities? My allocation now is 51% domestic equities/18% foreign eq/25% domestic bonds/2% cash

I've heard there is often a fatal flaw with the % internationally. My advisor said its calculated on where that company is headquartered out of. So for instance a US tobacco based company would show 100% domestic even though a large % of revenue is global. Has anyone else heard this and believes it distorts the % view?

 

[kevink]

I've heard there is often a fatal flaw with the % internationally. My advisor said its calculated on where that company is headquartered out of. So for instance a US tobacco based company would show 100% domestic even though a large % of revenue is global. Has anyone else heard this and believes it distorts the % view?

The old argument that one doesn't need international because the companies that dominate the US market have global businesses started with Jack Bogle I believe. And it's one of the few things he was wrong about - as shown of course by the company he founded, based on the research of their sizable staff of economists, recommending significant exposure to international in both equities and bonds.

Cullen Roche drew my attention to this excellent paper on this topic by AQR:

Exceptional Expectations: U.S. vs. Non-U.S. Equities

Roche says:

"Here’s a wonderful new paper from AQR’s Antti Ilmanen and Thomas Maloney. They discuss the drivers of US outperformance and conclude that the main driver was rising valuations. Not surprising. And when expectations are high it doesn’t take much to underperform simply because expectations were…too high. As Keynes liked to say, the markets are a beauty contest and if you expect the most beautiful person in the world to walk on stage and you get a Cullen Roche, who, for the record, is quite handsome, but not nearly the most beautiful man in the world, you’ll be disappointed.

But the key finding for me was that their conclusions were true in both hedged and unhedged currency. That’s especially interesting to me because, as you might know, I primarily view foreign diversification as a Dollar hedge. That is, you own foreign stocks knowing that periods like April 2025 happen. And when those periods do happen the Dollar falls a lot, domestic assets become unstable and on a relative basis all that foreign stuff ends up looking much better. It’s just such an easy way to hedge your domestic currency risk that I see it as a no-brainer sort of diversifier. But what it really communicates is that no matter what’s going on with currencies high expectations still make those assets risky because expectations are so high."

So it comes down to valuations and international stocks are value-priced compared to the handful of mega-cap tech stocks that dominate the US market. You're also getting industry and market cap diversification and exposure to the two-edged sword of currency arbitrage.

Vanguard recommends 20-40% in international. It seems to me that those who go with less than their recommended minimum believe that the future will resemble the past 15 years, and that valuations and global economic and political trends don't matter.

 

[SteveTX]

I currently have 10% of equities in international. VYMI, VEA, and VWO.

 

[Al18]

This year Warren Buffet bought significant amount of Japan equities. I believe that’s a first for him.

Yellow submarine, that comment from Fidelity doesn’t make sense to me. I would contact your Fidelity rep.

 

[Stormy Kromer]

I've been on the record on this forum to bash International Funds. I hold about 15% International.

Year to date it is my best performing sector. I'll eat crow when it is performing well.

 

[RetiredHappy]

I was at about 20% and after years of under performance, I went down to 10% last year. No regrets.

 

[big-papa]

I've had around 20% of my equities in international since just about 2010 or so.

Cheers.

 

[imjustawarrior]

I've been on the record on this forum to bash International Funds. I hold about 15% International.

Year to date it is my best performing sector. I'll eat crow when it is performing well.

International has been a dog for quite some time compared to US. I don't blame you. I had almost given up on international until this year.

 

[mrfeh]

20% of all investments.

33% of equities.