An amazing thing happened earlier this week: Vanguard -- the arch-conservative, non-profit fund issuer -- made a massive switch in its central recommendation of what investors should hold as a core allocation.

The news was hidden inside a press release trumpeting the launch of the new Vanguard Total International Bond Index Fund. In fact, it was so hidden, no one noticed. I haven’t seen a single news story; a single tweet; nothing.

And yet, the impact is absolutely massive. It’s a clarion call that you, as a financial advisor, should quickly consider shifting your asset allocation policy in a significant way.  Right now.

What’s the news?

Hidden at the bottom of its press release touting the new International bond fund was the following statement: 

Because of the diversification benefits international bonds offer, we've added Vanguard Total International Bond Index Fund to our 12 Vanguard Target Retirement Funds, 4 Vanguard LifeStrategy® Funds, and 2 Vanguard Variable Insurance Funds. The new international bond fund represents 20 percent of the fixed-income allocation for each of the funds listed.

Twenty percent of your fixed-income allocation! Bam!

Welcome to the new era. 

The average U.S. investor has just about 0 percent exposure to international fixed-income, so Vanguard suggesting 20 percent is a big deal.

Should you adjust your asset allocation program today? What ETFs can you use to do the job?  Let’s consider the case.