Which international to move into.....

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FOGU
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Which international to move into.....

Post by FOGU »

In March of 2020 I did some tax loss harvesting by selling all my VTIAX (Vanguard Total International Stock Fund) and immediately replacing all that with VFWAX (FTSE All-World ex-US Index). Turned out well and the VFWAX has rebounded nicely. I doubt I will be able to tax loss harvest off of this holding for some time.

Now I am looking to balance up my international asset allocation with an upcoming cash infusion.

Which is more advisable: VTIAX or more VFWAX? Or something else? Does it matter?
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watchnerd
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Re: Which international to move into.....

Post by watchnerd »

FOGU wrote: Sat Mar 20, 2021 9:30 pm In March of 2020 I did some tax loss harvesting by selling all my VTIAX (Vanguard Total International Stock Fund) and immediately replacing all that with VFWAX (FTSE All-World ex-US Index). Turned out well and the VFWAX has rebounded nicely. I doubt I will be able to tax loss harvest off of this holding for some time.

Now I am looking to balance up my international asset allocation with an upcoming cash infusion.

Which is more advisable: VTIAX or more VFWAX? Or something else? Does it matter?
Portfolio Visualizer puts their correlation as 1.00
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Triple digit golfer
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Re: Which international to move into.....

Post by Triple digit golfer »

Might as well keep using VFWAX for simplicity

Look closely. There are two lines.

https://www.portfoliovisualizer.com/bac ... ion2_2=100
yules
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Re: Which international to move into.....

Post by yules »

FOGU wrote: Sat Mar 20, 2021 9:30 pm Turned out well and the VFWAX has rebounded nicely.
True, but both have rebounded nicely, yeah?

Although I did notice the Sam (maybe) thong that you did:VFWAX seem to perform a smidge better than VTIAX. I know they follow slightly different indexes that probably differ in some small way that account for this difference. But in comparing the funds, I just am not sure exactly how they meaningfully differ and what could account for it, e.g., one had a greater allocatiOn in X or a lower exposure to Y.

Yules
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Re: Which international to move into.....

Post by Adfmacro »

FOGU wrote: Sat Mar 20, 2021 9:30 pm In March of 2020 I did some tax loss harvesting by selling all my VTIAX (Vanguard Total International Stock Fund) and immediately replacing all that with VFWAX (FTSE All-World ex-US Index). Turned out well and the VFWAX has rebounded nicely. I doubt I will be able to tax loss harvest off of this holding for some time.

Now I am looking to balance up my international asset allocation with an upcoming cash infusion.

Which is more advisable: VTIAX or more VFWAX? Or something else? Does it matter?
VTIAX has about 4000 more stocks in it but 85% by volume is what is in VFWAX. If you are not selling VFWAX, buying more of the same fund sounds reasonable. I do not see a compelling reason to have both at the same time.
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Re: Which international to move into.....

Post by FOGU »

Thanks for the thoughtful responses.
I think I will stick with VFWAX, for simplicity, and keep VTIAX in the hole for further tax loss harvesting should the opportunity present.
Cheers!
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Re: Which international to move into.....

Post by watchnerd »

Triple digit golfer wrote: Sat Mar 20, 2021 9:41 pm Might as well keep using VFWAX for simplicity

Look closely. There are two lines.

https://www.portfoliovisualizer.com/bac ... ion2_2=100
An OG coupon-clipping, penny pinching BH would be all over that $7 difference in returns.
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Re: Which international to move into.....

Post by Triple digit golfer »

watchnerd wrote: Sat Mar 20, 2021 11:08 pm
Triple digit golfer wrote: Sat Mar 20, 2021 9:41 pm Might as well keep using VFWAX for simplicity

Look closely. There are two lines.

https://www.portfoliovisualizer.com/bac ... ion2_2=100
An OG coupon-clipping, penny pinching BH would be all over that $7 difference in returns.
$17! Do you realize how much that'd be worth at a 10% return for 30 years?!
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Re: Which international to move into.....

Post by livesoft »

maybe add some shares of the small-cap foreign index fund VFSAX/VSS to go with the VFWAX
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Re: Which international to move into.....

Post by watchnerd »

Triple digit golfer wrote: Sun Mar 21, 2021 3:37 am $17! Do you realize how much that'd be worth at a 10% return for 30 years?!
Enough to cover AARP-discounted senior matinee movie tickets!
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Re: Which international to move into.....

Post by beernutz »

watchnerd wrote: Sun Mar 21, 2021 6:31 am
Triple digit golfer wrote: Sun Mar 21, 2021 3:37 am $17! Do you realize how much that'd be worth at a 10% return for 30 years?!
Enough to cover AARP-discounted senior matinee movie tickets!
A showing you drive to in your hybrid Camry.
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Re: Which international to move into.....

Post by Doctor Rhythm »

FOGU wrote: Sat Mar 20, 2021 10:49 pm Thanks for the thoughtful responses.
I think I will stick with VFWAX, for simplicity, and keep VTIAX in the hole for further tax loss harvesting should the opportunity present.
Cheers!
I did the same thing a year ago. If there’s another bear market, I’ll tax loss harvest depreciated VFWAX shares back into VTIAX. I don’t see any reason to hold two international funds in the same account until then.
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Re: Which international to move into.....

Post by drk »

FOGU wrote: Sat Mar 20, 2021 10:49 pm I think I will stick with VFWAX, for simplicity, and keep VTIAX in the hole for further tax loss harvesting should the opportunity present.
If you're buying more, and VTIAX is your preferred fund, there's no reason not to buy that while continuing to hold VFWAX.
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Re: Which international to move into.....

Post by Triple digit golfer »

drk wrote: Sun Mar 21, 2021 4:05 pm
FOGU wrote: Sat Mar 20, 2021 10:49 pm I think I will stick with VFWAX, for simplicity, and keep VTIAX in the hole for further tax loss harvesting should the opportunity present.
If you're buying more, and VTIAX is your preferred fund, there's no reason not to buy that while continuing to hold VFWAX.
This is what I'm doing with VTSAX and VFIAX, respectively.
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Re: Which international to move into.....

Post by ruralavalon »

FOGU wrote: Sat Mar 20, 2021 9:30 pm In March of 2020 I did some tax loss harvesting by selling all my VTIAX (Vanguard Total International Stock Fund) and immediately replacing all that with VFWAX (FTSE All-World ex-US Index). Turned out well and the VFWAX has rebounded nicely. I doubt I will be able to tax loss harvest off of this holding for some time.

Now I am looking to balance up my international asset allocation with an upcoming cash infusion.

Which is more advisable: VTIAX or more VFWAX? Or something else? Does it matter?
I don't believe it matters. Both are good choices for diversified, low expense international stock funds. That's why they are good tax loss harvesting partners.

Vanguard FTSE All-World ex-US Index Fund Admiral Shares (VFWAX) ER 0.11% is a little less diversified, it does not include stocks of international small-cap companies.

The performance of the two funds has been almost identical. Portfolio Visualizer, 2012-2021.

To keep it simple I would just buy more Vanguard FTSE All-World ex-US Index Fund Admiral Shares (VFWAX) to rebalance with the upcoming cash infusion. But that just me.
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Re: Which international to move into.....

Post by FOGU »

livesoft wrote: Sun Mar 21, 2021 5:42 am maybe add some shares of the small-cap foreign index fund VFSAX/VSS to go with the VFWAX
I don't know how many are "some."
Is that to make it more like VTIAX?
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Re: Which international to move into.....

Post by livesoft »

FOGU wrote: Sun Mar 21, 2021 7:12 pm
livesoft wrote: Sun Mar 21, 2021 5:42 am maybe add some shares of the small-cap foreign index fund VFSAX/VSS to go with the VFWAX
I don't know how many are "some."
Is that to make it more like VTIAX?
It doesn't matter what "some" is because it doesn't have to look like VTIAX. For instance, maybe you would like to overweight small caps on the international side of your portfolio.
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Re: Which international to move into.....

Post by FOGU »

livesoft wrote: Sun Mar 21, 2021 7:23 pm
FOGU wrote: Sun Mar 21, 2021 7:12 pm
livesoft wrote: Sun Mar 21, 2021 5:42 am maybe add some shares of the small-cap foreign index fund VFSAX/VSS to go with the VFWAX
I don't know how many are "some."
Is that to make it more like VTIAX?
It doesn't matter what "some" is because it doesn't have to look like VTIAX. For instance, maybe you would like to overweight small caps on the international side of your portfolio.
If I knew there were an advantage to overweighting international small caps, I might possibly do it. But I don't possess that kind of knowledge which is why I use market index funds. At the risk of seeming tedious, why would I want to overweight international small caps?
Thanks.
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Re: Which international to move into.....

Post by livesoft »

FOGU wrote: Sun Mar 21, 2021 9:32 pm If I knew there were an advantage to overweighting international small caps, I might possibly do it. But I don't possess that kind of knowledge which is why I use market index funds. At the risk of seeming tedious, why would I want to overweight international small caps?
Thanks.
Let me ask you back: Why do you want to underweight international small caps by owning VFWAX?
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Re: Which international to move into.....

Post by Triple digit golfer »

livesoft wrote: Sun Mar 21, 2021 9:35 pm
FOGU wrote: Sun Mar 21, 2021 9:32 pm If I knew there were an advantage to overweighting international small caps, I might possibly do it. But I don't possess that kind of knowledge which is why I use market index funds. At the risk of seeming tedious, why would I want to overweight international small caps?
Thanks.
Let me ask you back: Why do you want to underweight international small caps by owning VFWAX?
I don't think he does. Seems he wants to match VTIAX and you suggested adding small caps. I think he's wondering how much to add to VFWAX to match the exposure of VTIAX.
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Re: Which international to move into.....

Post by FOGU »

livesoft wrote: Sun Mar 21, 2021 9:35 pm
FOGU wrote: Sun Mar 21, 2021 9:32 pm If I knew there were an advantage to overweighting international small caps, I might possibly do it. But I don't possess that kind of knowledge which is why I use market index funds. At the risk of seeming tedious, why would I want to overweight international small caps?
Thanks.
Let me ask you back: Why do you want to underweight international small caps by owning VFWAX?
I don't necessarily want to be underweight international small caps. I own VFWAX because it seemed the best option for tax loss harvesting VTIAX without changing my international allocation.

That was the reason for my initial post, to get some feedback on whether to buy VTIAX again or more of VFWAX. From the responses I understand now the difference between the two, though in practical performance terms, historically it seems to make little or no difference which is held.
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Re: Which international to move into.....

Post by Doctor Rhythm »

FOGU wrote: Sun Mar 21, 2021 9:32 pm
livesoft wrote: Sun Mar 21, 2021 7:23 pm
FOGU wrote: Sun Mar 21, 2021 7:12 pm
livesoft wrote: Sun Mar 21, 2021 5:42 am maybe add some shares of the small-cap foreign index fund VFSAX/VSS to go with the VFWAX
I don't know how many are "some."
Is that to make it more like VTIAX?
It doesn't matter what "some" is because it doesn't have to look like VTIAX. For instance, maybe you would like to overweight small caps on the international side of your portfolio.
If I knew there were an advantage to overweighting international small caps, I might possibly do it. But I don't possess that kind of knowledge which is why I use market index funds. At the risk of seeming tedious, why would I want to overweight international small caps?
Thanks.
I believe your chain is being pulled. I don’t think (and most here would agree I suspect) that you need to buy a separate international small cap fund to “complete” your portfolio if you own VFWAX. This forum has plenty of people who completely eschew international stocks or emerging markets, and I doubt that most others have a globally weighted allocation to international equity.

Your plan is solid.
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Re: Which international to move into.....

Post by MishkaWorries »

watchnerd wrote: Sat Mar 20, 2021 11:08 pm
Triple digit golfer wrote: Sat Mar 20, 2021 9:41 pm Might as well keep using VFWAX for simplicity

Look closely. There are two lines.

https://www.portfoliovisualizer.com/bac ... ion2_2=100
An OG coupon-clipping, penny pinching BH would be all over that $7 difference in returns.
You rang? :greedy
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Re: Which international to move into.....

Post by FOGU »

Doctor Rhythm wrote: Sun Mar 21, 2021 9:50 pm
FOGU wrote: Sun Mar 21, 2021 9:32 pm
livesoft wrote: Sun Mar 21, 2021 7:23 pm
FOGU wrote: Sun Mar 21, 2021 7:12 pm
livesoft wrote: Sun Mar 21, 2021 5:42 am maybe add some shares of the small-cap foreign index fund VFSAX/VSS to go with the VFWAX
I don't know how many are "some."
Is that to make it more like VTIAX?
It doesn't matter what "some" is because it doesn't have to look like VTIAX. For instance, maybe you would like to overweight small caps on the international side of your portfolio.
If I knew there were an advantage to overweighting international small caps, I might possibly do it. But I don't possess that kind of knowledge which is why I use market index funds. At the risk of seeming tedious, why would I want to overweight international small caps?
Thanks.
I believe your chain is being pulled. I don’t think (and most here would agree I suspect) that you need to buy a separate international small cap fund to “complete” your portfolio if you own VFWAX. This forum has plenty of people who completely eschew international stocks or emerging markets, and I doubt that most others have a globally weighted allocation to international equity.

Your plan is solid.
:thumbsup
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Re: Which international to move into.....

Post by Triple digit golfer »

Doctor Rhythm wrote: Sun Mar 21, 2021 9:50 pm
FOGU wrote: Sun Mar 21, 2021 9:32 pm
livesoft wrote: Sun Mar 21, 2021 7:23 pm
FOGU wrote: Sun Mar 21, 2021 7:12 pm
livesoft wrote: Sun Mar 21, 2021 5:42 am maybe add some shares of the small-cap foreign index fund VFSAX/VSS to go with the VFWAX
I don't know how many are "some."
Is that to make it more like VTIAX?
It doesn't matter what "some" is because it doesn't have to look like VTIAX. For instance, maybe you would like to overweight small caps on the international side of your portfolio.
If I knew there were an advantage to overweighting international small caps, I might possibly do it. But I don't possess that kind of knowledge which is why I use market index funds. At the risk of seeming tedious, why would I want to overweight international small caps?
Thanks.
I believe your chain is being pulled. I don’t think (and most here would agree I suspect) that you need to buy a separate international small cap fund to “complete” your portfolio if you own VFWAX. This forum has plenty of people who completely eschew international stocks or emerging markets, and I doubt that most others have a globally weighted allocation to international equity.

Your plan is solid.

Agreed. The two funds are virtually identical and either one will be fine as one's only international stock holding.
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Re: Which international to move into.....

Post by Beensabu »

FOGU wrote: Sun Mar 21, 2021 9:42 pm
livesoft wrote: Sun Mar 21, 2021 9:35 pm
FOGU wrote: Sun Mar 21, 2021 9:32 pm If I knew there were an advantage to overweighting international small caps, I might possibly do it. But I don't possess that kind of knowledge which is why I use market index funds. At the risk of seeming tedious, why would I want to overweight international small caps?
Thanks.
Let me ask you back: Why do you want to underweight international small caps by owning VFWAX?
I don't necessarily want to be underweight international small caps. I own VFWAX because it seemed the best option for tax loss harvesting VTIAX without changing my international allocation.

That was the reason for my initial post, to get some feedback on whether to buy VTIAX again or more of VFWAX. From the responses I understand now the difference between the two, though in practical performance terms, historically it seems to make little or no difference which is held.
Having VFWAX as your only international equities holding is like having VFIAX as your only US equities holding. You're pretty much saying large cap is good enough, so whatever.
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