All-World Stocks portfolio 2024

Hi all

What are current portfolio implementations that resemble an all-world stocks portfolio?
What are possible ETF combinations?

For example

1-Fund Portfolio:

2-Fund Portfolio

I found more examples at Bogleheads for US and international markets, but they arealready a bit outdated.

Background:
After running well with my original portfolio from 2017, i thought after 6 years i should update it. Markets have moved in the mean time, so have economies and so forth.

  • What is a current combination of ETFs that create an all-world portfolio?
  • What is the methodology, and where comes the data from?
    for example, Visual Capitalist has a nice chart (however it being static and not updated) with data from sifma :

Your turn :slight_smile:

This sounds low.
VTI is probably 60+%.

3-Fund portfolio (my weights; as I want to underweight US a bit, overweight EM a bit):

  • VTI (55%)
  • VEA (30%)
  • VWO (15%)
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My allocation right now (overall including retirement account investments):

67% US
15% CH
10% Developed Markets exCH/US
8% Emerging Markets

thanks all for sharing your allocations.
However I am looking more for a methodology to come up with it for examle

why 60-30-10 and not 58-31-11 ?

well the answer should be “because this allocation comes closest to representing while respecting the constraints of <whatever limits you, for example portfolio complexity>”

I remember thinking along the lines of
“FTSE All-World has 55% US, 10% EU, 15% APAC and 20% EM, and this can be recreated with varying levels of sophistication by combining the following ETFs: … while paying attention to ETF X has exposure to the developed ex-US World and thus overlaps with ETF Y…”

What are the Vanguard equivalent of these?

SPDW == VEA? TER 0.05%
SPEM == VWO? TER 0.08%

State Street has lower TER, but I’d be tempted to go for Vanguard due to the much higher assets under management.

Why wouldn’t one keep it simple → 1 Fund portfolio ?

Could you please explain what you mean by the size tilt? Is one large cap and another not. Sometimes I struggle to see the difference between some of the different Vangaurd ETFs.

For example, is the only difference bewteen VXUS and VEU that VEU is sampled (vs index replication)? It also seems strange that this results in a higher expense ratio whereas I’d expect the opposite.

Maybe for more control. e.g. if you already have single stock holdings in the US and want to maintain a certain ratio of US to non-US could you decrease the VTI vs VXUS holding.

This chart from MSCI might help as well.

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Interesting. In the description at the top it says for VEU and VXUS: “Category: Foreign Large Blend” so I assumed it was the same and thought the median market cap might have been due to the indexing vs sampling difference.

Easiest way is always to check Morningstar.

VEU:

VXUS:

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For more (unnecessary) fiddling.

The no direct exposure to the IRS, free US weighting 6 funds porftolio:
US - 61%: SPYL
Canada - 3%: CSCA
Dev Europe - 16%: IMEA
Dev Pacific ex Japan - 4%: CPXJ
Japan - 6%: XMJP
EM - 10%: EIMI

Israel is ignored because a rounded 0.20% makes 0%.

The no US, no EM 4 funds version:
Canada - 10%: CSCA
Dev Europe - 54%: IMEA
Dev Pacific ex Japan - 14%: CPXJ
Japan - 22%: XMJP

The choice of funds can be optimized, broad discretion has been used to select accumulating variants with some kind of attempt at balance between TER and AUM. I don’t guarantee that all are investable by individual investors.

Weightings from VT, funds selected for their non-us domicile, capitalization structure, tax pseudo-efficiency, pseudo low TER and pseudo decent AUM. The main goal is to avoid direct exposure with the US tax system and tax authorities, along with allowing a more free weighting of the US components of the portfolio (for less or no exposure to them). As you can see, that comes at the cost of complexity and fees.

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I decided to dip my toe in the water and went for VWO.

I did also try to buy AVES, but was put off by the lack of liquidity and higher spreads.

DFAC 50% Dimensional US core 2 etf

DFAX 50% Dimensional World ex-US core 2 etf

The all world balanced mildly factor (focusing on small, value and profitability/quality) tilted forever portfolio.

What do you mean no direct exposure to the IRS? VT would have exposure being an American fund, but VWRL based in Ireland is not?

Well, it’s not 100% IRS neutral since US companies are exposed to US taxation and WHT are witheld on the dividends the fund receives but I would consider VWRL as a suitable no direct IRS investment fund (as is SPYL which I used in my first suggestion).

My first idea was to avoid the US altogether (so no US companies) but I’ve grown more tolerant with time and would now just underweight the US, while still not wanting any direct involvment with their tax authorities so that gave rise to my suggestions above.

Btw, some very interesting links about 100% Stock portfolios in this weekly investing press review:

  • AQR why 100% Stocks is not optimal
  • ERN about retirement simulations related to 100% Stocks portfolios
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I don’t know anyone who thinks a portfolio of stocks and bonds (60%/40% to keep things simple, though that ubiquitous choice is pretty arbitrary) has a higher unconditional expected return than 100% stocks. We (academics, practitioners, anyone who’s taken a cursory look at modern finance) prefer a diversified portfolio because we believe it has a higher return for the risk taken, not a higher expected return.

I guess most people on this forum are in accumulation phase where the goal is maximum return and not optimal risk/return rate that’s why you read 100% stocks here all the time. Also when taking pillar 2 and cash into account the real stock percentage is propably between 60%-85% for most people (or even less for those owning real estate).

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