Comments on: How to create an Ivy League endowment fund using UK ETFs

By: The Investor

The Investor — Wed, 24 Jun 2009 21:48:51 +0000

Very sensible point about the UK market scale versus the US market. There are less global titans, too. I’ve seen it said before by some passive ETF portfolio guru (I think maybe Bogle) that the UK domestic equity portion should be split between a UK tracker and a global tracker. The trouble is of course that introduces extra currency risk – ultimately a sterling investor will usually want sterling assets.

That said, most of the Western markets move in broadly the same direction over the long-term, so perhaps it’s not such a big issue. It’s true I believe the UK market is very ‘international-ized’ – I forget the exact figure, but some huge proportion of earnings (possibly over 50%) of the FTSE 100 is earned outside of the UK (may be lower after the commodity slowdown). Of course there’s currency risk – mainly dollar exposure – to that, too.

By: Niklas Smith

Niklas Smith — Wed, 24 Jun 2009 14:59:20 +0000

The portfolio looks broadly sensible, but I think it may have too much weight on the UK domestic market. For Swensen "domestic equity" means the US equity market, which has about one third of the world's capitalisation. In comparison the UK market is only 6%. This would suggest reducing the domestic equity allocation and increasing the foreign developed allocation. But am I right in remembering that you've previously argued that the UK market has so much exposure to foreign companies that investors don't really need to diversify across equity markets?

By: * Moolanomy Answers and Liz Pulliam Weston Weekly Highlights

* Moolanomy Answers and Liz Pulliam Weston Weekly Highlights — Sun, 31 May 2009 13:10:25 +0000

[...] at Political CalculationsTrack Your Spending: The First Battle In The War On Debt at Man vs. DebtHow to create an Ivy League endowment fund using UK ETFs at MonevatorOn Being Homeless at Brip BlapFrugality Guideline For College Students at [...]