VT is not as global as I thought. For exposure that better matches GDP hold 1.37x VWO for every VT

My portfolio exclusively consists of Vanguard Total World Stock ETFs (VT and VWRL). I specifically invest in those because they give exposure to the world, instead of ETFs with a focus on the US, like VTI and VOO.

Or so I thought...

VT has a market allocation of 57.1% to US and only 4.5% to China.

In contrast, US makes up 24.2% of GDP and China 17.8%.

To adjust for this you can buy an ETF with a focus on China, e.g. VWO.

Assuming prices of ETFs are the same, holding 0.71x VWO for every VT would give weights that match GDP distribution closely.

Adjusting for prices, which are not same (VT = $101.83 and VWO = $52.78), gives 1.37x VWO for every VT.

Sources and calculation can be found in this sheet.

Submitted April 17, 2021 at 08:11AM by 9xD4aPHdEeb https://ift.tt/3ee4kru