The two funds also differ in their balance between growth and value, as measured by the price-to-book ratio (a lower ratio indicates a stronger value orientation). Developed Markets has a P/B ratio of 1.52; the S&P 500’s is 2.63.
The bottom line for me is that large-cap stocks, U.S. and international, represent two great asset classes that might or might not go up and down together.
They provide currency diversification. And are both quite different from value and small-cap asset classes.
I can’t prove that these asset classes will improve your returns. But my portfolio includes them, and I think yours should do the same.