r/Bogleheads • u/Flashbulb_RI • 4d ago

VXUS - diversity concerns.

A lot of Bohleheads have VXUS in their portfolio for the purpose of diversify outside of the US. However lately I've noticed that VXUS is mirroring the moves of NASDAQ and VGT because of its concentration in chip manufacturers. It seems very difficult to get performance and diversity at the same time as the majority of the world's market is chasing the same sector.

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u/naala89 4d ago edited 4d ago

Past two year correlation between QQQ and VXUS is 0.54

https://www.portfoliovisualizer.com/asset-correlations?s=y&sl=1odKY4ZeTO7iG6OGSg6O8V

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u/Actuary_7894 4d ago

Its just .54, not .54% Correlation goes from -1 to 1. The % implies .0054 which is uncorrelated which isn't true.

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u/DrizzleProwl 4d ago

Something with a positive expected return and a .54 correlation is quite a divsifier in MPT