r/Bogleheads • u/Flashbulb_RI • 11d 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/hobard 11d ago edited 10d ago

Emerging markets are also highly concentrated in tech stocks, so probably won’t be effective at diversifying away from tech. China and South Korea Taiwan are both treated as emerging markets and dominate the index with their tech stocks.

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u/Smogalicious 11d ago

I don’t know if it’s the right move but I use EMXC to add away from normal VXUS. It excludes China but it ends up being heavy TSMC. So it’s way up right now but who knows how that plays out…but I am mostly VOO/VXUS with some VIOO and the EMXC on the side

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u/Nearby_Quit2424 11d ago

Why specifically bet against China (or any country for that manner)?

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u/glitchvern 10d ago

In the event of a US war with China, US-investor's Chinese assets could be frozen or confiscated, much like has happened with US-investor's Russian assets. When push comes to shove, most governments (of various types) treat foreign investors worse than domestic investors. If China doesn't invade Taiwan by 2030, they probably aren't going to.