Key insights
- The post discusses a potential portfolio shift from US equities to international small caps and emerging markets, driven by concerns about US economic instability and a perceived rotation away from US assets. While the specific ETFs mentioned (VSS, FLKR, FLTW, FLJA, FLBR, XEMC) are not direct US equities, the underlying thesis of a 'Sell America' rotation suggests a slightly bearish sentiment towards US markets. However, the impact is limited as it represents a diversification strategy rather than a wholesale exit from US equities.
Hi guys,
With the current geopolitical context — US economic instability, USD weakness, and what looks like a clear "Sell America" rotation — I'm considering shifting 10-15% of my long-term DCA portfolio toward international small caps and emerging markets.
My current thinking:
Small Caps ex-US
- VSS (Vanguard FTSE All-World ex-US Small Cap) — 0.08% MER, 4,500+ holdings, already covers ~19% EM exposure
Emerging Markets (country-specific ETFs)
- FLKR — South Korea (semiconductors + AI infrastructure play) * FLTW — Taiwan (TSMC exposure, with geopolitical risk acknowledged) * FLJA — Japan (corporate governance reform thesis) * FLBR — Brazil (tangible assets, commodities, infrastructure) * XEMC — EM ex-China (India, South Korea, Taiwan)
The thesis behind this: Beyond pure diversification, I see a structural shift happening:
- Institutions rotating from AI hype into tangible assets and infrastructure * LatAm (Brazil, Mexico) relatively insulated from US tariffs with attractive valuations * South Korea/Taiwan as pure-play infrastructure for the global AI buildout * Japan benefiting from corporate governance reforms unlocking shareholder value
I'm long-term with a bi-weekly DCA, high risk tolerance, Munger/Buffet-aligned (MOAT + network effects + Lindy). This EM sleeve would be a satellite position on top of a core TFSA portfolio.
Are you seeing the same rotation toward tangible assets and EM in your own portfolios?
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- Any concerns about FLTW given Taiwan geopolitical risk at a small allocation (~10%)? 2. Would you go country-specific ETFs (FLKR, FLBR) or a single broad EM ETF (like IEMG or VWO)? 3. Any LatAm single stocks worth considering alongside ETFs — PAC, BAM, or any others?
Curious to hear how you are navigating this shift 🤔