Hi, yeah I am totally into index investing, but with a tilt away from from MSCI ACWI.
I have split my equity allocation into 3 equal parts:
1)33% Home country allocation(in my case India)
2)33% Asia pacific ex Japan or Emerging markets
3)33% MSCI ACWI
I was inspired from this Boglehead study, which kind of backtests how non US investors would have fared by investing in different markets, home country vs non home country.
https://www.bogleheads.org/blog/2020/03/02/50-years-of-investing-in-the-world-part-3/
They finally concluded that a 20% tilt away from MSCI ACWI would be kind of middleground, based on the fact that we wont know whether home country will do well or not. 20% tilt means, you take your home country weight in the ACWI and then add 20% to it. In case of US investors it would be like 60+20 so they are supposed to be 80% in US and 20% in non US. In case of SG and India both are like very small weights, so it would basically mean 21-23% in home country.
I have further added another bucket of Asia pacific ex japan or EM, so I am kind of significantly tilted away from the ACWI. Last year was bad for Asia and made me wonder why I did so much tilt towards Asia. But then I like the Ray Dalio way of thinking in terms of uncorrelated assets. We see already this year Asia isnt falling so much, while US is falling. So, it kind of keeps my portfolio stable, hopefully.
