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I am still debating between XAW and individual etfs. The advantage I see with XAW is when I have to start selling in retirement, it would be cheaper and easier for rebalancing to sell one fund instead of 2. On the other hand, is it possible the market capitalization of the US may increase and the allocation to the US in XAW would become even higher? I believe it is 55% now. Maybe I am overthinking things. I don't think I would want the allocation to be higher.
 

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Right now the US market is a little overvalued which is a concern w the P/E of the S&P at 25x, ~ 19 is more normal. Tech is ~ 24 % of the S&P 500 now making it more volatile too.

Maybe better to go individual and underweight the US. Another option is Vanguard Global low vol VVO. 50% US but in more defensive areas so you wont get hurt as much w a pullback. More banks, utilities, consumer staples etc
 

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I wanted to share this chart. VT is a highly regarded "world" ETF from Vanguard (US). It turns out that XAW tracks VT perfectly, which is really good news for Canadian investors.

The chart shows XAW (green line) and VT converted to CAD (black line). I'm actually surprised that the iShares XAW tracks VT this well even though they use different indexes.

20319
 

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I think XAW and VXC are great choices for world ex Canada. You can't go wrong with either of them.

Let the market capitalizations determine the weightings. There is not a major difference between 55% US and 45% US.
 

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I think XAW and VXC are great choices for world ex Canada. You can't go wrong with either of them.

Let the market capitalizations determine the weightings. There is not a major difference between 55% US and 45% US.
I agree fully with XAW or VXC. No one knows where relative global market weights will be next year, or 5 years from now, or 10 years from now. Anyone who wants to break it up into multiple components only 'think' they know where markets are headed. They don't. No one does. Chances are they will be less than 50% correct.

Leave the guessing game to 'whatever will be will be'. The market is never wrong longer term. I have a healthy holding of XWD that is the entire world..... which was before either XAW or VXC was in existence. I would switch except for the well over 100% unrealized gains that I'd have to pay tax on prematurely.
 

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I've had separate international ETFs (VUN, XEF, XEC) for years to allocate internationally, but couple years ago when I set up a new trading account (long story) for a portion of my money, I wanted it to be simpler so I looked into moving from 5 ETFs to 3. In this account, I hold canadian, XAW, and bonds.

I decided against VXC because I think they had 60% US whereas XAW was closer to 50%, and I wanted to balance it out with the rest of the world better. This was easier to get to my target allocation. It doesn't give me the slightly more granular control of rebalancing as with my 5 ETFs, but for this purpose I wanted the simplicity.

For most of my funds, I like the idea of 5 ETFs more than XAW. So it might work well if simplicity is your priority, but I think separate ETFs is better in the long run.
 

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For most of my funds, I like the idea of 5 ETFs more than XAW. So it might work well if simplicity is your priority, but I think separate ETFs is better in the long run.
I think that seperate ETFs provide better rebalancing opportunities. This may be especially advantageous if someone is in retirement / withdrawal mode. As you liquidate to withdraw money out of the portfolio, you can sell from whatever is "high" (above target weight) while leaving the other ETFs alone.

If you had everything in an all in one fund like VBAL, then you have to sell everything indiscriminately.
 

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I think that seperate ETFs provide better rebalancing opportunities. This may be especially advantageous if someone is in retirement / withdrawal mode. As you liquidate to withdraw money out of the portfolio, you can sell from whatever is "high" (above target weight) while leaving the other ETFs alone.

If you had everything in an all in one fund like VBAL, then you have to sell everything indiscriminately.
Truth of the matter though is there is nothing 'factual' about one's target weight. It is a figment of one's imagination (belief) of what global distribution and/or asset allocation is right. Callan's Periodic Table tells you that in spades, and only in hindsight. One can pretend if they wish to do so though.
 

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XAW. It's a pain in the butt to balance individual ETFs. Whenever it's time to buy or sell, it's hard to decide which individual ETF to use, and it feels like timing the market. For me at least. I'd rather just have XAW and not worry about it. Simpler, easier. Only downside for me is slightly higher MER but I'm fine with that. YMMV.
 
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