Looking to diversify International holdings
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Looking to diversify International holdings
A few years ago I made a rookie mistake and decided to purchase Vanguard International Growth (VWIGX) as my core International holding. It's performed well, but I now realize that it was not the proper Boglehead thing to do, and I am now looking to diversify my International stock holdings.
I have very large capital gains on this fund, and am trying to decide the appropriate path forward for diversifying my International stock holdings.
Rather than sell VWIGX and purchase Total International Stock (VXUS), and thus pay large capital gains taxes, I am considering using new money to purchase an international value (or perhaps international small-cap value) fund to complement VWIGX since VWIGX is primarily large-cap growth.
Does this seem like the most prudent path forward? If so, what international value fund would you suggest as a complement to VWIGX?
I have very large capital gains on this fund, and am trying to decide the appropriate path forward for diversifying my International stock holdings.
Rather than sell VWIGX and purchase Total International Stock (VXUS), and thus pay large capital gains taxes, I am considering using new money to purchase an international value (or perhaps international small-cap value) fund to complement VWIGX since VWIGX is primarily large-cap growth.
Does this seem like the most prudent path forward? If so, what international value fund would you suggest as a complement to VWIGX?
40% VT | 20% Global SCV | 20% LTPZ | 10% I-Bonds | 10% Cash
Re: Looking to diversify International holdings
I have that fund in my ROTH IRA and it is doing well. if need a more diversified international holdings, I would invest in vanguard total international fund.
Re: Looking to diversify International holdings
I think the best approach would be to simply adopt VXUS or Vanguard Total International Stock Index Fund Admiral Shares (VTIAX). It's much cheaper than any international value fund and since you seem to be reluctant to rebalance in the taxable account anyway it's probably going to be the smarter move long-term.rockAction wrote: ↑Thu Apr 22, 2021 8:28 am Rather than sell VWIGX and purchase Total International Stock (VXUS), and thus pay large capital gains taxes, I am considering using new money to purchase an international value (or perhaps international small-cap value) fund to complement VWIGX since VWIGX is primarily large-cap growth.
Does this seem like the most prudent path forward? If so, what international value fund would you suggest as a complement to VWIGX?
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
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Re: Looking to diversify International holdings
Perfect, thank you. And just to confirm, you are saying I should just keep the VWIGX I have, and apply all new money for International towards VTIAX, correct?vineviz wrote: ↑Thu Apr 22, 2021 8:47 amI think the best approach would be to simply adopt VXUS or Vanguard Total International Stock Index Fund Admiral Shares (VTIAX). It's much cheaper than any international value fund and since you seem to be reluctant to rebalance in the taxable account anyway it's probably going to be the smarter move long-term.rockAction wrote: ↑Thu Apr 22, 2021 8:28 am Rather than sell VWIGX and purchase Total International Stock (VXUS), and thus pay large capital gains taxes, I am considering using new money to purchase an international value (or perhaps international small-cap value) fund to complement VWIGX since VWIGX is primarily large-cap growth.
Does this seem like the most prudent path forward? If so, what international value fund would you suggest as a complement to VWIGX?
40% VT | 20% Global SCV | 20% LTPZ | 10% I-Bonds | 10% Cash
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Re: Looking to diversify International holdings
Agreed, it has been spectacular, which is great, but also leaves me with the capital gains dilemma since I hold the fund in a taxable account.
40% VT | 20% Global SCV | 20% LTPZ | 10% I-Bonds | 10% Cash
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Re: Looking to diversify International holdings
Just turn off dividend reinvestment and dividends plus new money go to total international. You can also tax loss harvest any losses in growth and buy total.rockAction wrote: ↑Thu Apr 22, 2021 9:21 amAgreed, it has been spectacular, which is great, but also leaves me with the capital gains dilemma since I hold the fund in a taxable account.
We plan. G-d laughs.
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Re: Looking to diversify International holdings
+1MishkaWorries wrote: ↑Thu Apr 22, 2021 9:48 amJust turn off dividend reinvestment and dividends plus new money go to total international. You can also tax loss harvest any losses in growth and buy total.rockAction wrote: ↑Thu Apr 22, 2021 9:21 amAgreed, it has been spectacular, which is great, but also leaves me with the capital gains dilemma since I hold the fund in a taxable account.
40% VT | 20% Global SCV | 20% LTPZ | 10% I-Bonds | 10% Cash
Re: Looking to diversify International holdings
Fidelity FZILX is the total international zero-expense fund. It works well. VXUS and IXUS charge about 10 basis points.
VXUS and IXUS are the Vanguard and Ishares total int'l mkt etfs.
VXUS and IXUS are the Vanguard and Ishares total int'l mkt etfs.
Re: Looking to diversify International holdings
You are right. Fidelity has a few zero cost index funds, such as total stock index fund, extended market index fund, international index fund.
Re: Looking to diversify International holdings
In general I'd recommend selling as much of the VWIGX as you can justify, balancing the risk of keeping a somewhat narrow holding with the known tax implications.rockAction wrote: ↑Thu Apr 22, 2021 9:04 amPerfect, thank you. And just to confirm, you are saying I should just keep the VWIGX I have, and apply all new money for International towards VTIAX, correct?vineviz wrote: ↑Thu Apr 22, 2021 8:47 amI think the best approach would be to simply adopt VXUS or Vanguard Total International Stock Index Fund Admiral Shares (VTIAX). It's much cheaper than any international value fund and since you seem to be reluctant to rebalance in the taxable account anyway it's probably going to be the smarter move long-term.rockAction wrote: ↑Thu Apr 22, 2021 8:28 am Rather than sell VWIGX and purchase Total International Stock (VXUS), and thus pay large capital gains taxes, I am considering using new money to purchase an international value (or perhaps international small-cap value) fund to complement VWIGX since VWIGX is primarily large-cap growth.
Does this seem like the most prudent path forward? If so, what international value fund would you suggest as a complement to VWIGX?
But if you just turn off dividend reinvestment for VWIGX and put new money towards VTIAX, I'd say that's still a very reasonable course of action.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
Re: Looking to diversify International holdings
OP, regarding the Fidelity "zero-expense" or "zero cost" alternatives, they're perfectly good funds but their names really boil down to marketing plays; all mutual funds entail costs to run them.
It's reasonable to expect that Vanguard's large, vanilla index funds will actually exceed the Fidelity Zero funds by a few, and perhaps as few as single digits of basis points of return over perhaps as many as double digits of years. Not a huge issue either way, but nothing is really free.
It's reasonable to expect that Vanguard's large, vanilla index funds will actually exceed the Fidelity Zero funds by a few, and perhaps as few as single digits of basis points of return over perhaps as many as double digits of years. Not a huge issue either way, but nothing is really free.
Re: Looking to diversify International holdings
Fidelity “zero” cost funds should NEVER be held in a taxable account.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
Re: Looking to diversify International holdings
This is off topic but it's worth pointing out that while the Fidelity Zero Total US (FZROX), Total International (FZILX), and Total Large Cap (FNILX) all seem reasonable and have performed equivalent to non-proprietary index funds (Vanguard's VTSAX/VTIAX/VLCAX for example).
Fidelity Zero Extended Market (FZIPX) has had significantly worse performance than other non-proprietary "extended market" index funds such as Vanguard's (VEXAX).