Hi,Instead of VT+VOO in taxable accounts, I would recommend using VOO+VXUS and sizing appropriately for the percentage you want to track global market cap. The reason is that you will be able to claim the foreign tax credit with VXUS but not VT. Also, with VT you are slightly overpaying for U.S. equities (7bps vs 3bps).
So for example 50/50 VT/VOO translates into 80/20 VOO/VXUS based on 2023 global market capitalization. Every so often you can adjust based on the latest global market weights (which can be looked up from Vanguard’s page for VT).
This is the method that I use as I want to track something like 90% global market cap with a 10% U.S. tilt, but I implement it with VTI+VXUS in taxable for the aforementioned reasons.
Thanks for the reply and helpful info.
My feeling is that US stocks will outperform international over 30 years but obviously I don't really know.
What I am trying to protect against is if the USA stock market has a similar situation to the Japanese stock market.
My thinking was by putting $500k in VT, if the US stock market has flat to negative returns then VT's composition would change automatically to more international stocks. I don't mind paying the extra 4bps on the US equity portion for this to be done automatically.
I did not know about the foreign tax credit, how exactly does this work? Why can you not claim foreign tax credit on VT?
Statistics: Posted by SpringbokNY — Sun Dec 24, 2023 4:29 am