My reasoning behind as European investor is the following : I am of the opinion that global portfolio is the least risky way of investing. There is no accepted economic theory that i am aware of that buying some part of the global portfolio is less risky than buying the global portfolio. You can argue that as an American investor you may want to tilt towards US equity which is fine because in my opinion is the only country in the world where you can have a home country bias yet have a very diversified portfolio in terms of industries as well as individual stock holdings. However as a European investor I believe Holding Total World is the logical end-point of a diversify , less risky equities strategy. Now in theory you can implement this strategy in many different ways :
Is true that the combine ER of VTI + VXUS is lower than VT but Vanguard’s VT expense ratio has been dropping, so the argument that you’re better off with several funds to build the equivalent as time passes it has less importance. Also you can argue that when deciding between two or more funds, it is wise to consider Occam’s Razor: Other things being equal, simpler explanations are generally better than more complex ones. In favor of VTI + VXUS is that you have the possibility to tilt towards US market. In fact
many American investors think than US equities will continue over-perform overseas equities…
You could also split VTI in Vanguard FTSE Developed Markets ETF (VEA) + Vanguard FTSE Emerging Markets ETF (VWO) Compared to VXUS, by holding VEA + VWO you appear to get a larger number of stocks, lower overall expense ratio but VXUS has more “simplicity”, but if that is the goal and you are ok with less stocks and higher ER, wouldn’t you just be using Vanguard Total World Stock ETF (VT)?
The point I trying to make is that there are many roads to dublin .The world cap protect you against the risk of guessing wrong, and I think will return a solid return . In the long term and in practice any of the implementations of this strategy will be ok.
Now regarding US domiciled ETF vs Ireland domiciled etf , is a long-discussed topic in this forum and I agree with the opinion that as a Swiss residents we can benefit from swiss-american tax treaty and US domiciled ETF + non Swiss brokers (in my case IB) is the perfect combo to optimize taxes.
Currently if you want to mimic VT using VTI + VXUS you need to allocate 55% VTI and 45 % VXUS.
Then, when is time to rebalance your portfolio the objective is to maintain a consistent world cap allocation of your equity classes , changing the allocation if the have deviated away from world cap ratio back into line