Thank you for your reply, msf, especially the information on the Africa ETF and the excellent references on PFICs.
I won't be circumventing any restrictions on making a purchase, and will answer all eligibility-to-invest questions honestly. This will limit me to funds set up to be offered to US persons. I have been finding out that that does reduce what is available to me substantially. Many funds have
separate structures set up for selling to US and non-US persons, and some just
don't sell to US persons at all, probably because of the draconian reporting requirements, which the IRS has managed to
push non-US companies into complying with.
The language in the Sturgeon disclaimer is unclear, and I don't think they have that regional restriction, mostly because they know I'm in the US and they're talking with me. The disclaimer seems to say that they won't sell where selling is illegal, and they especially won't sell in the UK or US if selling is illegal there. I doubt that means to say that selling is illegal to US persons, or they wouldn't be talking with me. It's a website disclaimer, and I suspect that what it's getting at is that they can't sell on the basis of anything on the website, meaning that if I'm interested they'll send me a 100+ pages of more legalese to read before investing.
I don't think Sovereign Man (nor I for the purpose of choosing investments) cares about the historian's
distinction between empire and nation state. What matters in this context is whether the US economy is sustainable for another ten to 20 years, and if it isn't, how that will affect my finances before I die. I agree that it is likely that the collapse of our economy will drag down the rest of the world. In that case, we're all cooked. But it's also possible that some other regions may be less affected, and if that happens, then one may benefit from owning something in those other regions.
I'm thinking that my new portfolio may come out looking something like:
- 17% US-based funds of US businesses (mutual/ETF)
- 17% Europe-based funds of Western European businesses (domiciled in Europe, denominated in euros/Swiss francs)
- 17% Asia-based funds of developed-market Asian businesses (domiciled in Asia, denominated in yen/yuan)
- 25% Emerging market funds (domiciled outside the US)
- 25% Frontier market funds (domiciled outside the US)
This is a strategy of diversification by both region and level of economic development. It's interesting that we can talk about the risk of investing in frontier markets because of the potential for political and economic instability and war. But is the US really still a bastion of security? It seems to me that there are some ways in which an investment in Tanzania or Uzbekistan may be safer that one in the United States.
When I look at the above list, I get scared. What if I make the wrong choices in the last two categories and lose half my nest egg? But when I ask that, the converse fear comes to mind. What if I keep my diversification entirely within the US and our system crashes under the weight of debt, disease, or war? Then I lose everything. That's scary too.
I think I may have found some partial answers to my third question, which was asking for websites that profile non-US mutual funds. I'm still reviewing these sites to see how much useful information I can find without paying exorbitant fees. From what I see so far, they mainly focus on "alternative" investments, which means private placements, hedge funds, etc., but also include emerging and frontier market funds.
I'm interested in hearing from more people with information that supports or refutes what I'm saying, or that answers the three questions in my original post. Thanks guys, and thanks David for this great forum.
