The allocation is not based on being bullish on int'l stocks, but what they consider to be the best level of diversification. 40% is higher than I prefer, but that is Vanguard's position.Why is Vanguard more aggressive when it comes to international equity / debt exposure in their all-in-one funds (target date, lifestrategy) than most other investment management company's are?
I looked at the equity portfolios of a handful of all-in-one style target date funds to compare the amount of their equity portfolios dedicated to international exposure and Vanguard is definitely one of the outliers. Vanguard's Lifestrategy Funds also push a similarly high level of international exposure. Here's how the TDFs I looked at compared:
FIDELITY FREEDOM 2060 → 55% US / 45% INT
VANGUARD TARGET 2060 → 60% US / 40% INT
TIAA-CREF LIFECYLCE 2060 → 65% US / 35% INT
T. ROWE PRICE 2060 → 68% US / 32% INT
SCHWAB TARGET 2060 → 68% US / 32% INT
AMERICAN FUNDS 2060 → 71% US / 29% INT
I was a bit surprised to see these different TDF funds staking out such different approaches to what an optimal amount of international exposure should be - with international equities ranging anywhere from 29-45% / US:INT equity ratio ranging anywhere from 6:5 to 2.5:1.
The rally in US equities is giving me a bit of regret for going with Vanguard's recommendations. My current FOMO related to reduced US equity exposure will likely be temporary, but I'd like to better understand why Vanguard is going so hard on international exposure.
More info:
https://corporate.vanguard.com/content/ ... Online.pdf
Statistics: Posted by Northern Flicker — Fri Mar 08, 2024 4:22 pm — Replies 19 — Views 987