VSS verus SCHC

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CajunDan
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Joined: Wed Jul 13, 2016 11:47 pm

VSS verus SCHC

Post by CajunDan » Mon Aug 22, 2016 12:31 am

Currently hold VSS, but concerned about it's exposure to emerging markets, which I'd rather get with a purer play like VWO. Is Schwab SCHC a good alternative for international small value, or does it have some drawbacks which I'm missing?

TropikThunder
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Re: VSS verus SCHC

Post by TropikThunder » Mon Aug 22, 2016 12:52 am

CajunDan wrote:Currently hold VSS, but concerned about it's exposure to emerging markets, which I'd rather get with a purer play like VWO. Is Schwab SCHC a good alternative for international small value, or does it have some drawbacks which I'm missing?
I think a quality answer depends on how VSS (currently) fits into your overall allocation. True, VSS holds ~19% EM per Vanguard vs ~2% for SCHC. But unless your significantly tilting small cap in your international, it likely won't make that much of a difference. For example, one can approximate total int'l with Vanguard FTSE All-World ex-US ETF (VEU) at 90% and VSS at 10%. If you're at 80/20, with 30% equity in international, then only 2.4% of that is VSS, and the EM portion of VSS is not even 0.5% of your overall portfolio.

Wagnerjb
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Re: VSS verus SCHC

Post by Wagnerjb » Mon Aug 22, 2016 9:01 am

I prefer the WisdomTree ETF DLS to SCHC in the International Small Cap space, despite the fact that SCHC has a significantly lower ER.

Morningstar shows DLS to be smaller than SCHC, with an average company size of 1,131MM vs. 1,645MM. DLS has more value as well. DLS holds 46% of its portfolio in the Small Value and Mid Value style boxes, vs. 32% for SCHC.

Best wishes.
Andy

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in_reality
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Re: VSS verus SCHC

Post by in_reality » Mon Aug 22, 2016 9:08 am

CajunDan wrote:Currently hold VSS, but concerned about it's exposure to emerging markets, which I'd rather get with a purer play like VWO. Is Schwab SCHC a good alternative for international small value, or does it have some drawbacks which I'm missing?
SCHC is market cap weighting. FNDC would be a value play.

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cookymonster
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Re: VSS verus SCHC

Post by cookymonster » Mon Aug 22, 2016 9:20 am

I prefer SCHC because it's more tax-efficient than VSS. But I tax loss harvest between both of them.

If you hold either VXUS or VEU you're going to have the same issue with mixing EM. Also, VWO is approximately 84% EM per Morningstar. The only way you're going to get it precisely right if you have multiple international holdings is by calculating the amount of EM in each of them.

livesoft
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Re: VSS verus SCHC

Post by livesoft » Mon Aug 22, 2016 9:58 am

SCHC is not small value. It does have small volume. In terms of shares it is about the same as VSS. I know that VSS is one of the most difficult ETFs for me to make trades on because it sometimes has no transactions for 10 minutes or more. SCHC has one-third to price, so the dollar volume is one-third that of VSS.

Instead of SCHC, I would recommend SCZ. I own neither. I do own both VSS and DGS. For foreign large-cap I own VEU and VEA right now.
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Topic Author
CajunDan
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Re: VSS verus SCHC

Post by CajunDan » Mon Aug 22, 2016 12:25 pm

Wagnerjb wrote:I prefer the WisdomTree ETF DLS to SCHC in the International Small Cap space, despite the fact that SCHC has a significantly lower ER.

Morningstar shows DLS to be smaller than SCHC, with an average company size of 1,131MM vs. 1,645MM. DLS has more value as well. DLS holds 46% of its portfolio in the Small Value and Mid Value style boxes, vs. 32% for SCHC.

Best wishes.
Looks like WisdomTree ETF DLS is the best of these five for an International Small Cap Value ETF: VSS, SCHC, DLS, FNDC & SCZ. Reasons why:

1. Truly small cap, median market cap is $1.1 billion versus $1.5 billion plus for the other four
2. Lowest PE ratio at 12.1 versus 14.4 plus for the other four, a good indicator of value
3. Lower price/book ration at 1.1 versus 1.2 plus for the other four, another good indicator of value

As much as I hate paying a their expense ration of .58% as compared to .16% for SCHC, I think it's worth it in this case.

lemonPepper
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Re: VSS verus SCHC

Post by lemonPepper » Sat Nov 18, 2017 7:58 am

It looks like DLS is no longer commission free at fidelity :(

is there a website where you can check how to buy commission free ETF?

livesoft
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Re: VSS verus SCHC

Post by livesoft » Sat Nov 18, 2017 3:14 pm

It looks like DLS will still trade commission-free at TDAmeritrade.
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