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Rmann@Epi

1Yr

The AllWorld already weights according to market capitalization. Which criterion do you use? GDP? Home bias?

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Maximilian@Maxdepot

1Yr

@Epi I actually only looked at the % weighting by country of the indices, is this not a good criterion?

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Rmann@Epi

1Yr

@Maxdepot Sure, you have to look at the weighting of the countries. Then what do you do with that info? That's what I was asking about.

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Maximilian@Maxdepot

1Yr

@Epi I would like to achieve the greatest possible diversification and cushion the 50% USA share in the All World somewhat with European companies.

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Rmann@Epi

1Yr

@Maxdepot The Allworld already has thousands of stocks. You can hardly get more diversified. And if you increase the European share, then you are overweighted there in terms of market capitalization. Once again: In what way is the USA overweighted by 50% for you?

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Maximilian@Maxdepot

1Yr

@Epi but the market allocation of the USA is 59.1% (according to data sheet: https://fund-docs.vanguard.com/FTSE_All-World_UCITS_ETF_USD_Distributing_9505_EU_GERMAN_GE.pdf). This means that if I buy the ETF, almost 60% will be invested only in American companies and thus one country is much more strongly represented than all the others. My strategy would be in principle already a distribution according to market capitalization. Only I think very much of the European economy, which is too weakly represented to me purely because of the market capitalization. Thus, I try to weight the European economy more strongly through another ETF from Europe.

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Rmann@Epi

1Yr

@Maxdepot You see that correctly. But in what sense is that an overweight? The US also has almost 60% of the market capitalization of the investable market. The ETF does not decide how much USA is in it.

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