Comment by bryanlarsen
4 days ago
The OP still has the same basic problem.
- he's overweighted on Canada. Being Canadian themselves, that's a double risk. If Canada does poorly, the chance of his livelihood being affected is high. Investments should be anti-correlated from livelihood risks.
- despite being 30% in Canada, VEQT has 2.5% in NVDA. By itself that's fine, but once you add similar amounts for MSFT, GOOG, META, AAPL, BCOM, etc, it becomes a significant portion of the index.
The point of an index fund is to be diversified. If one sector crashes but other sectors do well you're still fine. The OP will lose significant money if either Canada or AI crashes, even if the rest of the world is doing well.
The Canadian funds like VEQT/XBAL/etc are overly concentrated in Canada on purpose because it reduces volatility:
* https://www.vanguard.ca/content/dam/intl/americas/canada/en/...
* https://benderbenderbortolotti.com/home-bias-in-the-vanguard...
Vanguard/Blackrock could set the allocation to whatever they wanted, but it's a conscious choice. Absolute returns are not necessarily the only consideration (if they are, perhaps buy a NASDAQ fund).