Moving into Europe

I currently have around 20% of my portfolio invested in an S&P500 fund.  The fund is doing well and I expect it to do well through the end of the year.  However, European and other global indices have lagged the US this year by a large margin: US  stocks are up around 16.7% while Europe, Australia and Far East (EAFE) stocks are up only around 8.6% (see chart).

Image

I think that fears about a Euro-zone meltdown are receding now and we can expect some acceleration in European and other global stock markets.  Accordingly I am moving half of my S&P fund holdings to a EAFE fund to gain exposure to non-US stocks.

  • SELL S&P Fund @ $119.6038
  • BUY EAFE Fund @ $86.5027

The EAFE fund’s top holdings are:

  • Nestle
  • HSBC Holdings PLC
  • Vodafone Ag
  • Novartis AG
  • BP
  • Royal Dutch Shell PLC
  • Roche Holding AG
  • GlaxoSmithKline PLC
  • Toyota Motor Corp
  • Total SA

POSTMORTEM

Writing today, 14th October, this looks like a good call.  The EAFE fund is at $85.9862 (down 0.6%) while the S&P fund is at $117.6261 (down 1.7%).  Moving money from the S&P fund to the EAFE fund has preserved more capital (1.1% more).

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