That’s the Vanguard Emerging Markets Stock Index Fund and indeed I own some of that. However it’s a relatively small part of my portfolio. The risk and variance are much higher, and the risk and variance of a single country index fund would be higher still. This fund dropped more than 75% during the 2008 crash and still hasn’t recovered. The expense ratio ranges from about 0.2% to 0.33%, higher though not hugely so than domestic and total international index funds.
Most investors, especially those with smaller portfolios or who have a shorter time horizon, are probably better off with something like the Vanguard Total International Stock Index Fund which includes a developing markets component, but also includes Asia and Europe, or the Vanguard Total World Stock Index which adds the United States to the mix.
At least in the US, generally expense ratios on foreign index funds are higher than on domestic index funds. They’re still a better deal than actively managed mutual funds.
How about index funds in countries that have an obviously larger growth potential instead of one’s own country.
I don’t mean to brag, but I’ll bet none of you rich country folk have seen rates we’ve seen in Brazil in the last many years.
That’s the Vanguard Emerging Markets Stock Index Fund and indeed I own some of that. However it’s a relatively small part of my portfolio. The risk and variance are much higher, and the risk and variance of a single country index fund would be higher still. This fund dropped more than 75% during the 2008 crash and still hasn’t recovered. The expense ratio ranges from about 0.2% to 0.33%, higher though not hugely so than domestic and total international index funds.
Most investors, especially those with smaller portfolios or who have a shorter time horizon, are probably better off with something like the Vanguard Total International Stock Index Fund which includes a developing markets component, but also includes Asia and Europe, or the Vanguard Total World Stock Index which adds the United States to the mix.
At least in the US, generally expense ratios on foreign index funds are higher than on domestic index funds. They’re still a better deal than actively managed mutual funds.