It’s that time of year again! Time when I look at our asset allocation and convince myself to take on more international exposure in our portfolio. After making the update, here’s what our target asset allocation looks like.
International Asset Allocation Changes
When we started using a total market approach for our portfolio I began with a 20% international (18% of the total portfolio) allocation, with plans to increase it each year.
As of our last asset allocation, I had 30% (or 27% of the total portfolio) international allocation.
Now I’ve moved it up to 35% (31% of the total portfolio). This may or may not be the final move; next year I may move it to 40%.
Here’s how our portfolio currently looks.
Our international holdings currently include Vanguard Total International Index, the BGI EAFE Index Fund, and the Vanguard Emerging Markets Index.
In addition to the overall asset allocation, I also like to keep the EAFE at 85% and emerging markets at 15% of the total international holding.
Rebalancing our portfolio is always fun. Since our portfolio is split over 10 different retirement accounts (which I cannot combine), in addition to the asset allocation, I try to keep it (relatively) simplified and with the lowest expense ratio possible.
I came up with a plan to shift some of the bond holdings into the EAFE fund in Scott’s 457 plan. That should account for the majority of the change.
There’s still a slight need for some additional emerging markets. I hate to buy more of the Vanguard emerging market fund, since the expense ratio is .40% with purchase and redemption fees.
I recently compared the emerging market ETF shares to the index fund, and the ETF came out on top, so I’m planning to head that route.
However, since it’s a small holding in a small account, I don’t want to pay much for the trades, so I’m going to take a look at some of my other brokerage accounts to make the move.
Written by Madison
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