For the international allocation of your portfolio, we purchase this allocation through exchange traded funds or ETFs. These are baskets of investments that you buy as 1 investment that can track an index or a sector for example. These ETFs are currently iShares Paris-Aligned Climate MSCI World ex USA ETF (PABD) for the developed markets portion of the portfolio which includes countries in Europe, Japan, Australia, and Canada. The Emerging markets portion of our portfolio is currently allocated to Xtrackers MSCI Emerging Markets Climate Selection ETF (EMCS) and this covers investments in Asia and Latin America. Our Bond portfolio is allocated to Short Duration Green Bond ETF (CCSB) that has domestic and international investments.
Purchasing US-traded ETFs for international exposure has several advantages:
They simplify tax reporting under US regulations
Eliminate the need for currency conversion
Avoid foreign withholding taxes in many cases
Provide better liquidity with standardized trading hours
Typically have lower transaction costs and fewer trading restrictions than directly purchasing securities on foreign exchanges
All while still giving you diversified exposure to global markets.
The domestic stock allocation of your portfolio, typically your largest allocation is purchased in individual company stock to activate proxy voting at each company and aligns with the MSCI USA Climate Paris Aligned Benchmark Extended Select Index.