The primary goal of asset location is to increase the tax-efficiency of your portfolio, at least it will be for most people. You want to pay the lowest amount of tax on your chosen asset allocation.
Both account types benefit from tax-free growth. You pay no taxes on dividend payments and owe no taxes on capital gains when you sell assets as long as the proceeds remain in the account.
You see, when you own non-U.S. stock funds as a U.S.-based investor, those funds pay taxes to foreign entities, and as a shareholder, you’re indirectly paying those taxes.
Since I keep most of money with Vanguard, I was able to choose popular index funds in the international and domestic stock categories that I currently have or have previously held in my own accounts.