How much Vanguard Small Cap Value is in Vanguard Total Stock market

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
phienx3
Posts: 10
Joined: Tue Mar 07, 2017 9:14 am

How much Vanguard Small Cap Value is in Vanguard Total Stock market

Post by phienx3 » Tue Mar 21, 2017 7:01 pm

I was wondering how much % of vanguard small cap value is in the Vanguard Total Stock market.
VISVX vanguard small cap value in the 100% VTSMX total stock market.?
I thought about opening up an IRA ROTH with 60% SMV and 40% REIT for the next 10 years or so.

lack_ey
Posts: 6553
Joined: Wed Nov 19, 2014 11:55 pm

Re: How much Vanguard Small Cap Value is in Vanguard Total Stock market

Post by lack_ey » Tue Mar 21, 2017 7:09 pm

Vanguard Small Cap Value Index Fund holds stocks that are a subset of what's in Vanguard Total Stock Market Index Fund. So 100% is in the total fund.

I think around or slightly above 7% of Vanguard Total Stock Market's holdings by percentage invested are also in Vanguard Small Cap Value, in case that's what you were actually aqsking. The latter tracks a 85-98% breakpoint benchmark by market cap and then splits value and growth halfway, but some of the packeting on style migrations (for example, a stock becoming too large to be still in the small cap index) makes for some overlap.

Hukedonfonix4me
Posts: 111
Joined: Thu Oct 13, 2016 3:00 pm

Re: How much Vanguard Small Cap Value is in Vanguard Total Stock market

Post by Hukedonfonix4me » Tue Mar 21, 2017 8:17 pm

If you look at the Morningstar style box, small value represents a 3% holding in VTSAX (vanguard total stock market - US). link provided below

http://portfolios.morningstar.com/fund/ ... ture=en-US
"While some mutual fund founders chose to make billions, he chose to make a difference." | -The Bogleheads' Guide to Investing

User avatar
Kevin M
Posts: 9612
Joined: Mon Jun 29, 2009 3:24 pm
Contact:

Re: How much Vanguard Small Cap Value is in Vanguard Total Stock market

Post by Kevin M » Tue Mar 21, 2017 8:57 pm

Hukedonfonix4me wrote:If you look at the Morningstar style box, small value represents a 3% holding in VTSAX (vanguard total stock market - US). link provided below

http://portfolios.morningstar.com/fund/ ... ture=en-US
Not quite. M* only shows 30% of Vanguard SCV (VISVX) in the SCV box:

00 00 00
16 15 10
30 24 06

So it's a bit more complicated than that.

Kevin
Wiki ||.......|| Suggested format for Asking Portfolio Questions (edit original post)

2retire
Posts: 367
Joined: Wed Jun 13, 2012 9:00 am

Re: How much Vanguard Small Cap Value is in Vanguard Total Stock market

Post by 2retire » Tue Mar 21, 2017 9:01 pm

Kevin M wrote:
Hukedonfonix4me wrote:If you look at the Morningstar style box, small value represents a 3% holding in VTSAX (vanguard total stock market - US). link provided below

http://portfolios.morningstar.com/fund/ ... ture=en-US
Not quite. M* only shows 30% of Vanguard SCV (VISVX) in the SCV box:

00 00 00
16 15 10
30 24 06

So it's a bit more complicated than that.

Kevin
Please explain. The question was, what percent of VTSAX is small value, not what percent of VISVX is small value.

User avatar
Kevin M
Posts: 9612
Joined: Mon Jun 29, 2009 3:24 pm
Contact:

Re: How much Vanguard Small Cap Value is in Vanguard Total Stock market

Post by Kevin M » Tue Mar 21, 2017 9:07 pm

lack_ey wrote: I think around or slightly above 7% of Vanguard Total Stock Market's holdings by percentage invested are also in Vanguard Small Cap Value, in case that's what you were actually aqsking. The latter tracks a 85-98% breakpoint benchmark by market cap and then splits value and growth halfway, but some of the packeting on style migrations (for example, a stock becoming too large to be still in the small cap index) makes for some overlap.
This makes sense to me--about 7%.

Kevin
Wiki ||.......|| Suggested format for Asking Portfolio Questions (edit original post)

User avatar
Kevin M
Posts: 9612
Joined: Mon Jun 29, 2009 3:24 pm
Contact:

Re: How much Vanguard Small Cap Value is in Vanguard Total Stock market

Post by Kevin M » Tue Mar 21, 2017 9:15 pm

2retire wrote:
Kevin M wrote:
Hukedonfonix4me wrote:If you look at the Morningstar style box, small value represents a 3% holding in VTSAX (vanguard total stock market - US). link provided below

http://portfolios.morningstar.com/fund/ ... ture=en-US
Not quite. M* only shows 30% of Vanguard SCV (VISVX) in the SCV box:

00 00 00
16 15 10
30 24 06

So it's a bit more complicated than that.

Kevin
Please explain. The question was, what percent of VTSAX is small value, not what percent of VISVX is small value.
You can't use the M* style box that puts 3% into the SCV cell for VTSMX/VTSAX to conclude that VISVX comprises 3% of VTSAX unless 100% of VISVX is in the SCV cell, which it is not.

Looking at how the relevant indexes are constructed makes more sense, as explained by lack_ey. Ignoring micro caps, about 15% of the CRSP total US stock index is small cap, and half of that is value, which gives 7.5%. But micro caps are the bottom 2% or so of the bottom 15%, so 13%/2 = 6.5%. So roughly 7% seems like a reasonable approximation.

Kevin
Wiki ||.......|| Suggested format for Asking Portfolio Questions (edit original post)

User avatar
DG99999
Posts: 179
Joined: Fri May 30, 2014 12:30 pm

Re: How much Vanguard Small Cap Value is in Vanguard Total Stock market

Post by DG99999 » Tue Mar 21, 2017 10:47 pm

Just to add a caution - cycles can run long - if now is not the correct entry point to time SCV, then 10 years might be too short a holding period to realize the outperformance that you are anticipating.
I am not a financial professional. My posts are only my opinion on the topic. You need to do your own due diligence and consult with a professional when addressing your financial questions.

MotoTrojan
Posts: 1604
Joined: Wed Feb 01, 2017 8:39 pm

Re: How much Vanguard Small Cap Value is in Vanguard Total Stock market

Post by MotoTrojan » Wed Mar 22, 2017 12:42 am

That is a pretty aggressive tilt in both regards. Few things to note, there is no firm definition for what Small-cap value actually entails. As alluded to above, the Vanguard Small-cap Value fund (VBR ETF, not sure mutual) is actually a mix of Mornignstars Small/Mid. Total Stock Market (VTI ETF) has 3% Morningstar SCV, but a bit more of VBR due to blend/growth holdings, plus the mid-cap representation.

You should be looking at any tilt as a part of your global allocation. 60/40 seems crazy alone, but if you have a ton of Total Market it might not be far off. For Small-cap I have seen recommendations anywhere from a 10% tilt (on top of Total Market) to some that hold 50%. For REITs, I have generally seen 10-20% as the recommended total allocation.

For what it's worth, my overall portfolio (Taxable + Roth) is being built around:
Total Stock Market (VTI): 55%
Total Int. (VXUS): 25%
VIOV (S&P 600 Small-cap Value):20%

If you do want to tilt to SCV, do some research. Most believe the smaller the better, and Vanguards fund, while cheaper, is about 2x the median cap-size when compared to the Russell 2000 and S&P 600. I went S&P due to its quality component, small size, and reasonable cost (0.20% ER).

iamlucky13
Posts: 857
Joined: Sat Mar 04, 2017 5:28 pm
Location: Western Washington

Re: How much Vanguard Small Cap Value is in Vanguard Total Stock market

Post by iamlucky13 » Wed Mar 22, 2017 1:00 am

2retire wrote:Please explain. The question was, what percent of VTSAX is small value, not what percent of VISVX is small value.
That wasn't actually the question either. The question was, "how much VISVX is in VTSAX?"

The question isn't clearly stated. He may have intended to ask the question you are thinking he did, but that's not how he stated it.

If he means, of the stocks in VISVX, how many are also in VTSAX, the answer is 100%.

If he means, of the stocks in VISVX, what percent of VTSAX do they make up, I defer to lack_ey's estimate.

Post Reply