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A Good Way to Invest Internationally

Updated on October 04, 2008

A Prudent, Well-diversified, International Investment Portfolio

Here's a diversified portfolio for international (outside the U.S.) investments for your consideration:

1. Sector Diversification (% of equity exposure)

9.0 % consumer discretionary

7.6 consumer staples

10.5 energy

25.8 financials

11.3 industrials

6.4 information technology

12.1 materials

6.4 telecommunications services

5.3 utilities

2. MARKET DIVERSIFICATION (% equity exposure)

Europe

17.2% UK

8.7 France

7.3 Germany

5.5 Switzerland

3.5 Spain

3.1 Italy

2.4 Netherlands

1.9 Sweden

1.4 Finland

1.0 Belgium

3.6 Other European Markets

55.6% Subtotal Europe

PACIFIC

15.9% Japan

5.1 Australia

1.7 Hong Kong

1.0 Other Pacific Markets

23.7% Subtotal Pacific

EMERGING MARKETS

3.2 % China

3.2 Brazil

2.8 South Korea

2.4 Taiwan

2.0 Russia

1.5 India

1.4 South Africa

1.0 Mexico

3.2 Other emerging markets

20.7% Subtotal Emerging Markets

Now some may be wondering how could I possibly achieve the above sector and market diversification? And at what cost? The answer is very simple:

Invest in Vanguard's Total International Index Fund.

And what is the cost of buying shares in the fund?

Answer: Zero. This is a no-load (no sales commission) fund.

And what is the expense ratio of the fund (i.e., the operating cost charged each year against my investment in the fund)?

Answer: .54 % per year

What kind of results can I expect?

Answer: Nobody can predict the future. Here are some recent past results:

2001 -24.7%

2002 -11.8

2003 +28.9

2004 +18.8

2005 +19.9

2006 +27.8

2007 +32.5

2008 -10.1 (6 months ending 4-30)

One year +1.34%

Five years + 23.18

Ten Years + 7.04

Source: Vanguard Semi-Annual Report April 30, 2008

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    • mulder profile image

      mulder 8 years ago from Warnbro Western Australia

      Great hub well done .

    • Ralph Deeds profile image
      Author

      Ralph Deeds 8 years ago from Birmingham, Michigan

      TNX for the comment.

    • 02SmithA profile image

      02SmithA 8 years ago from Ohio

      Vanguard funds are very good. Love the low expenses and solid returns. Good hub

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