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The term bogleheadian is a bit ambiguous term but its simplification means low-cost, diversified, tax-efficient -- solutions. The slant is ETFs or index funds.

William Bernstein wrote in some of his articles that during the past century the world stock market returned 4% return p.a., only US returned awesome 4.7% in real terms. So I am becoming lazy and I want to get a world portfolio.

I want to bogleheadilize my portfolio to become better diversified, low-cost and passive. So my plan is to buy World Stock Market ETFs to achieve better risk/return ratio. Things that affect my choices are tax-efficiency (taxable and infant non-taxable account), asset location and asset allocation. Sorry very broad question.

My current portfolio

  • bonds 20%
  • 20% cash
  • 25% C065 food ETF
  • 15% C067 construction
  • 20% RSG com.stock (waste)

My aimed more diversified portfolio to the taxable

It contains just low-cost funds, ACC but small-cap with low div. yield. I haven't found a way to get proper allocation with just global funds so I had to add some specific funds such as Vanguard's small cap. Better ideas?

  • 10% TIPS bonds
  • 20% cash
  • 10% C065 food ETF
  • 10% DFA Emerging
  • 10% Small-Cap VB
  • 40% World Large-cap Developed ETF
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    Isn't filtering by name of the fund a bit like judging a book by its cover? – mbhunter Nov 23 '10 at 19:17
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    Also, why isn't "Vanguard FTSE All-World ex-US ETF (VEU)" on the list? Is your source complete? – Chris W. Rea Nov 23 '10 at 19:59
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    Is this even a question? The questioner has posted several answers, each of which seems to cover a different topic that is somewhat related to the question... – duffbeer703 Feb 17 '11 at 2:26
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    @duffbeer703: yes it is a question, all terms well-defined in a sentence. You was right about the mess, cleaned up the messy answers, now it should work. The reason for the mess was that I have been working for the thread to find a satisfying and more timeless answer. The tips about specific funds are stupid, they devalue over time and the site will become useless if everyone tried to suggest just funds. I hope my generic answer is more accessible to random walkers over a longer time horizon. – user1770 Feb 17 '11 at 3:17
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    Here's what Vanguard thinks makes a "world stock portfolio" - personal.vanguard.com/us/funds/… - 45.8% North America, 25.7% Europe, 13.4% Pacific, 15.1% emerging markets. (Equities only, no bonds.) – fennec Feb 17 '11 at 4:45
9

Half VTI (Vanguard Total Stock Market ETF) and half VEU (Vanguard FTSE All-World ex-US ETF), and stop futzing. The US is roughly half the world market cap so this is like a total world equity index. Very low costs. VTI Expense ratio is 0.04% as of 04/27/2017.

I don't know what you mean by RSG, but it could be either a waste processor or a gold miner. Either way it seems kind of speculative to hold even 10% of your wealth.

  • I edited your post because I'm pretty sure the Vanguard Total Stock Market ETF has the symbol VTI. It's VTSMX and VTSAX as a fund, though. – fennec Feb 17 '11 at 4:48
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    Oh, and the Motley Fool is rather big on recommending RSG the waste disposer. ("Provider of non-hazardous solid waste collection and disposal services in the United States.") At a guess, that's what he's talking about. caps.fool.com/Ticker/RSG.aspx – fennec Feb 17 '11 at 4:52
  • Thanks, Fennec, you're quite right. (It's VTS.AX in Australia, so that's stuck in my fingers.) – poolie Mar 2 '11 at 6:57
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A proper world porfolio is a non-trivial task. No one answer exists which is the best one and how one should construct it.

World?

The problem with world portfolio is that it is not well-defined. Providers use it as they wish and people use it as they wish, read the history for further ado (messy stuff). You can build yourself world portfolio but warning it is getting harder. You can use this tool by selecting global equity to search through global funds -- it is very useful and allows you to find the low-cost funds with PE/PB/Div.yield. Also, investigate topic more with this tool, less spam.

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You weren't really clear about where you are in the world, what currency you are using and what you want your eventual asset allocation to be.

If you're in the US, I'd recommend splitting your international investment between a Global ex-US fund like VEU (as Chris suggested in his comment) and an emerging markets ETF like VWO. If you're not in the US, you need to think about how much you would like to invest in US equities and what approach you would like to take to do so.

Also, with international funds, particularly emerging markets, low expense ratios aren't necessarily the best value. Active management may help you to avoid some of the risks associated with investing in foreign companies, particularly in emerging markets. If you still want low expenses at all cost, understand the underlying index that the ETF is pegged to.

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    Note: I hear that emerging market funds can be heavily weighted towards the energy sector (oil companies). NYSE:ECON is supposed to avoid that bias (that's the Emerging Global Shares Dow Jones Emerging Markets Consumer Titans ETF). Consider a little research here. – fennec Nov 24 '10 at 0:31
  • @fennec: That is often the downside of ETFs... whomever runs the thing basically ticks a few countries or regions, sorts by market cap, and allocates the money on that basis. – duffbeer703 Nov 24 '10 at 5:46

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