No. of Recommendations: 2
Go to www.bigcharts.com and plot out the returns of the two indexs. The correlation is not 1 but is close.

Here's a chart of the two funds over the past year:

http://finance.yahoo.com/q/bc?t=1y&s=VTSMX&l=on&z=m&q=l&c=vgtsx

They do look closely correlated at a glance, but look at the y axis- the international fund beat the domestic one by 50%! That is a sigificant difference.

Not worth the extra fees, IMHO, no matter how small

You wouldn't have paid an extra .1% in fees to have increased performance by 20% in the past year?

Also, it's a myth that you get plenty of diversification from multinational US firms. Only a small fraction of US earnings come from exports. There are just so many industries where you're going to lose if you refuse to own non-US companies. Look at digital cameras- if you only own US stocks, you get Kodak. Buy abroad and you get Sony, Canon, Nikon, etc. Same with cars- do you want only Ford, or BMW and Toyota as well?

If the US goes into a steady decline over the next few years, you may lose your job, your home value may decline, bonds may yield 1%, and stocks may crash....and your foreign holdings may be the only thing that performs well.

Nick



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