(PUB) Investing 2015

thirds of the portfolio’s assets are in its ETF shares. Historically, risk was much greater here than at Global Equity. During the 2000–2002 bear market, Global Equity’s maximum loss reached 23.3%. The FTSE All-World index dropped almost twice as much—a stunning 44.7% decline. However, during the 2008–2009 tumult, the tables were turned—another reason to always keep one skeptical eye open. World ex-U.S. Index Sell. Looking for a way to put up a competitive foreign equity exchange- traded fund, Vanguard hit on the idea of starting this fund to track the FTSE All-World ex-U.S. index in 2007. At the time of its launch, an allocation to Canada distinguished this fund from Total International Stock. Now, how- ever, the two funds have very similar country and region allocations, not to mention top 10 holdings. With “only” 2,500 or so holdings, this fund has a more compact portfolio compared to Total International Stock’s 6,000-plus stocks. However, the two funds have performed almost identi- cally since the latter’s 2010 overhaul. >

As mentioned, World ex-U.S. Index is the more expensive option of the two: Operating expenses run 0.29% versus 0.22%. As I predicted, the fund’s cheaper ETF shares (VEU) have garnered a greater share of the assets than the Investor and Institutional shares com- bined. If you want it, use the ETF. World ex-U.S. SmallCap Index Hold. We remarked earlier that this fund has at times provided some strong competition for International Explorer, which hadVanguard’s foreign small-cap arena to itself for years. Tracking the FTSE Global Small-Cap ex-U.S. index, World ex-U.S. SmallCap Index holds more than 3,400 stocks, with nearly half its assets in companies in Canada, the U.K., Japan and Taiwan. As is true in the U.S., smaller companies can be faster growers, and hence are a good component in a growth-oriented port- folio. When International Explorer is in a relative performance funk, this fund or its ETF shares (VSS) could be just the ticket to finding high growth rates beyond our shores. That said, I’ll repeat my preference for active management, both here and overseas. n

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Many of you regularly access our website and its members-only features. For those who haven’t logged in lately, here’s a brief reminder of what you can do online at www. AdviserOnline.com. n STAY ON TOP OF RECENT EVENTS with news articles. n SEARCH THE WEBSITE to find archived articles and answers to your questions. n GET THE LATEST ISSUE the minute it is published online in both HTML and PDF format. n ACCESS YEARS’ WORTH OF ARCHIVES f or issues, Hotlines and news articles. n USE THE ADVISERONLINE FORUM to share and discuss investment ideas with other members of the FFSA community. n CHECK THE CUSTOMER SERVICE PAGE for help with your subscriber account. And that’s just the beginning. These features will make it easier and more enjoyable for you to get all of the advice and information you are looking for. Visit www.AdviserOnline.com now to get the most from your subscription.

DAN’S DO-IT-NOW ACTION RECOMMENDATIONS 4 U.S. stocks may be leading foreign stocks again this year, but don’t give up on investing globally. International Growth remains a great way to own overseas companies. (See page 1) 4 Tech stocks can heat up your portfolio when temperatures drop. But too much heat can burn, so look to a PRIMECAP-run fund if you want to add some tech. (See page 4) 4 Short-Term Inflation-Protected Securities Index and Global ex-U.S. Real Estate celebrated anniversaries, but don’t rush to buy either fund. (See pages 6 and 7)

Daniel P. Wiener is America’s leading expert on the Vanguard family of funds. He is founder of the Fund Family Shareholder Association and chairman and chief executive officer of Adviser Investments, LLC, a Newton, Massachusetts, investment advisory firm (800-492-6868). As

Jeffrey D. DeMaso, Editor/Director of Research, works directly with Dan Wiener researching and writing the multiple-award winning Independent Adviser for Vanguard Investors newsletter. He also leads the analyst team for Adviser Investments, LLC. Jeff gradu-

editor of The Independent Adviser for Vanguard Investors , he is a five-time recipient of the Newsletter Publishers Foundation’s Editorial Excellence Award. He also edits the annual Independent Guide to the Vanguard Funds. Mr. Wiener is often quoted in the nation’s leading financial publications.

ated magna cum laude from Tufts University with a B.A. in economics, holds the Chartered Financial Analyst designation and is a member of the CFA Institute and the Boston Security Analysts Society.

16 • Fund Family Shareholder Association

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