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Old 08-05-2019, 05:10 PM   #1205
BBCWatcher
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Join Date: Jun 2010
Posts: 9,683
BBC, in your view, what's the optimal allocation of IWDA and EIMI to cover this planet proportionally?

ST suggested 90% IWDA and 10% EIMI, which I think is out of whack? Given the size of China and Asia as a whole?
I was referring to economy rather than population, China is the 2nd biggest economy in the world behind US.
Here's the thing, though: there are a lot of KFC restaurants in China, a lot of Apple iPhones, a lot of Buicks and Volkswagens, a lot of Rolex watches (yes, many genuine ones), a lot of Airbus and Boeing airliners, a lot of Scotch whiskey and Japanese sake and Heineken beer and French wine, a lot of Australian abalone and (unfortunately) coal, a lot of Canadian timber, etc., etc. Where a company's stock happens to be listed/traded is quite independent of where it produces and sells.

Market capitalization seems like a perfectly reasonable way to weight stocks in a stock portfolio. Some stock indices adopt certain tweaks. For example, an index might enforce arbitrary weighting caps on individual stocks and stock markets.

Investing in VWRD means you don't have to decide, because if the "EIMI part" of VWRD becomes a bigger factor over time, it'll become a bigger factor, automatically, right along with the market capitalization of those stock markets. Or vice versa. Thus, if deciding on an IWDA/EIMI ratio worries you, no problem, skip both and just go with VWRD, with dividend reinvestment of course.
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