EDITED : Much less wordy + formating
- How do I find more data on world market capitalization in the categories of emerging, ex-U.S. developed, and U.S. markets?
- When periodically re-aligning my portfolio, should I do so to reflect proportions of the world market, or should I stick to the same allocations I started with?
- Should I factor for the fact that the emerging market fund I want to buy has only 70% holdings in emerging markets by allocating enough in that fund to reflect the world market cap. of emerging markets?
Too short? more details: The question is about is re-aligning the portfolio. Do I keep the same allocations in each market type as when I started the strategy? Or do I change (every five years or so) the allocations of each fund according to proportions of the actual market?
This is what I came up with, with my limited knowledge. After more research and getting answers to this question it probably will change.
I decided to go with fundamentally weighted index funds. It makes more sense to me. I decided to put 115-my age = 85% into stocks and 15% into bonds. Vanguard VGTSX in 2016 allocates 50%, 38%, and 13% to U.S., developed, and emerging markets respectively so I multiplied those percentages to 85 because 85% of my portfolio will be in stocks.
FNDB -42.5% U.S. broad market FNDF - 32.3% Ex-U.S. developed market) FNDE -11.05% ?? (Emerging market fund which has 30% holding in developed markets) BND – 7.5% U.S. bonds 7.5% BNDX – 7.5% Ex-U.S. bonds 7.5%
Another problem arises when I look at the emerging market fund, FNDE, because it only has 70% holdings in emerging markets. For example, if the world market cap. of emerging markets is 10% and I allocate 10% of my stocks portfolio to FNDE, I will only have 7% of the portfolio invested in emerging markets. If I want to reflect the actual proportions of the world economy, would you think this is ‘close enough’ or, should I factor in the holdings and portfolio of the FNDE fund?
Thanks in advance
Submitted January 12, 2017 at 09:41PM by Teacher_Sam_Laoshi http://ift.tt/2iqddTf
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