The MSCI World ex U.S. Index (Net) is a free float - adjusted, market capitalization - weighted index that is designed to measure
international developed market equity performance, excluding the U.S..
The new fund will allow Canadian investors to build their entire foreign equity exposure using Vanguard ETFs: VTI (entire US market with a MER of 0.07 %), the Europe Pacific ETF (
international developed markets with a MER of 0.15 %) and VWO (emerging markets for a MER of 0.30 %).
Not only have we enjoyed back - to - back banner years — the S&P / TSX Composite returned over 35 % in 2009 and 17 % last year — but Canadian stocks have dramatically outperformed both the US and
international developed markets over the last decade.
Rick Ferri, author of All About Asset Allocation, argues that you get even better diversification by
splitting international developed markets into Europe and Pacific components, which can easily be done with the Vanguard Europe and Pacific mutual funds or ETFs.
The new fund will allow Canadian investors to build their entire foreign equity exposure using Vanguard ETFs: VTI (entire US market with a MER of 0.07 %), the Europe Pacific ETF (
international developed markets with a MER of 0.15 %) and VWO (emerging markets for a MER of 0.30 %).
The eighth sure thing was that, with non-U.S. developed market and emerging market economies generally growing at a slower pace than the U.S. economy (and with many emerging markets hurt by weak commodity prices, slower growth in China's economy, the Fed tightening monetary policy and a rising dollar),
international developed market stocks would underperform U.S. stocks in 2017.
Davis said Vanguard's projections for
the international developed markets, such as in the MSCI EAFE Index, are higher than the 4 percent to 6 percent range for U.S. stocks — at least 5 percent to 7 percent.
Not so long ago, investors needed two or three ETFs to get exposure to the US,
international developed markets and emerging countries (unless they were willing to buy US - listed ETFs).
Remember, the long - term expected returns for Canadian, US and
international developed markets are the same.
As for
the international developed market stocks, a basket of different countries will likely do better than a simple US exposure, even if the dollar continues to fall.
To test this idea, I looked at equity index returns for Canada, the US and
international developed markets (in Canadian dollars) since 1970.
Here's a sector breakdown of the Canadian market compared with the US,
international developed markets, and emerging countries.
For example when buying Canadian listed ETFS (etc VUN / XUU — tracking the US Market or VIU / XEF — tracking
the International Developed market) foreign withholding taxes on dividends come into play.
2017 Year in Review Summary: • President Donald Trump gave us a «Goldilocks» economy •
International developed markets • International emerging markets • Countries that outperformed the US • Large vs. small performance • Value vs. growth • Stocks and bonds
The NuShares ESG
International Developed Markets Equity ETF, and NuShares ESG Emerging Markets Equity ETF seek to track the investment performance of the TIAA ESG International Developed Markets Equity Index and the TIAA ESG Emerging Markets Equity Index, respectively.
These funds cover the global equity markets outside Canada: they're both about 55 % United States, 35 %
international developed markets (Europe and the Asia - Pacific region), and 10 % emerging markets.
There is no e-Series fund tracking emerging markets, so it's absent from the TD model portfolios, which therefore have a higher allocation to
international developed markets.
When you are done with my entire performance series you may decide to expand your small cap value to include
some international developed markets and emerging markets small cap value.
I compared the performance of two portfolios: one that held half Canadian stocks (S&P / TSX Composite Index) and half US stocks (S&P 500), and another portfolio split equally between Canada, the US and
international developed markets (MSCI EAFE Index).