Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

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oslocal
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Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by oslocal » Wed Jan 24, 2018 5:13 pm

Are there any particular mutual funds that are available on Schwab OneSource NTF that have a specific value or small tilt that I can use in combination with a slice and dice portfolio or that have lower ER than corresponding Vanguard options.

I'm looking for ETFs and at least one Mutual fund to use in the Schwab account, to replace a couple of my vanguard funds.

I'm not very familiar with Schwab but I'm sure someone else here is

I'm currently using:
VIIIX for S&P 500 0.02%
VVIAX for LCV 0.06%
VSIAX for SCV 0.07%
VSMAX for Small Cap 0.06% (Swap for SWSSX Russell 2000 Index 0.05%)
VGSNX for US REIT 0.10%

VTPSX for Total International 0.07% (I can also access VTSNX in Schwab 401k 0.09% to reduce allocate more to Vanguard)
VPADX for Pacific 0.10% (Geographical tilt)
VGRLX for Fgn REIT 0.15%
VEMAX for Emerging Markets 0.14%
VSS for Intl Smallcap 0.13%

VFIUX for Intermediate Treasury 0.10%
VSCSX for Short Term Corporate 0.07%
VIPIX for TIPS 0.07% (Possibly use SWRSX at 0.05%)
CDs and Stable Value Fund for Short Term


I'm also thinking of using RZV/SLYV to replace VSIAX, and any other options for all the tilt heavy folks out there.

WhiteMaxima
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Re: Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by WhiteMaxima » Wed Jan 24, 2018 5:19 pm

Why do you think SCV tilt will give batter return. base on history? Due the globalization, I think global mega company will outperform or at least match small cap. Recent history shows this.

airborne
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Re: Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by airborne » Wed Jan 24, 2018 5:56 pm

I use SLYV for my SCV tilt, and I've been happy with it. It trades with higher volume than RZV, and it also has a bit better dividend yield.

stlutz
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Re: Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by stlutz » Wed Jan 24, 2018 8:50 pm

SLYV follows a good index for your purposes, but I would only use that fund in an IRA. It throws off a lot of capital gain distributions for some reasons which would be undesirable in a taxable account.

Why not pay a $5 commission and just buy VBR?

Choy
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Re: Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by Choy » Wed Jan 24, 2018 9:05 pm

WhiteMaxima wrote:
Wed Jan 24, 2018 5:19 pm
Why do you think SCV tilt will give batter return. base on history? Due the globalization, I think global mega company will outperform or at least match small cap. Recent history shows this.
The OP isn't asking for an opinion on asset allocation. Plenty of on topic threads about the pros/cons of SCV.

Back to the original post -- I agree with stlutz, if you want to use Schwab exclusively I would just pay the commission for VBR.

Otherwise, SLYV and RZV seem to be the only good free options.

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FamousWalrus
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Re: Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by FamousWalrus » Wed Jan 24, 2018 9:31 pm

RZV has had a significant negative momentum loading since inception, which seems to have offset its extra SCV exposure. There are a few threads covering this on the forum. I looked into this fund and decided to avoid it for that reason along with the fact that it only holds around 150 stocks.

SLYV is a good fund but has had some large capital gains distributions so I would recommend holding in tax advantaged accounts only.
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woof755
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Re: Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by woof755 » Wed Jan 24, 2018 9:42 pm

I use EWX in my Schwab account with my new employer. It's emerging markets to add to my VSS (I keep 85% VSS, 15% EWX)
It's smaller and more value-y than VSS. But it's emerging, so not apples to apples.
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mickens16
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Re: Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by mickens16 » Wed Jan 24, 2018 9:49 pm

You can also use FNDA at Schwab.

Choy
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Re: Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by Choy » Wed Jan 24, 2018 10:18 pm

mickens16 wrote:
Wed Jan 24, 2018 9:49 pm
You can also use FNDA at Schwab.
My understanding is that FNDA is small-cap core, not value. If just looking for small-cap without value I would do SCHA.

oslocal
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Re: Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by oslocal » Wed Jan 24, 2018 11:03 pm

Thanks for the your suggestions. I should specify that this is a 401k. Otherwise it would have been a Vanguard account.

Thanks for the EWX suggestion, I'll probably use that.
Since it's a 401k I'll be putting in money twice a month and would therefore like to avoid transaction fee. Especially since I can get the vanguard funds free at vanguard.

I read that SWSSX "tracks" the Russell 2000, which is more small companies than the crsp index vanguard uses so I think that gives me a few options for now.

MotoTrojan
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Re: Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by MotoTrojan » Wed Jan 24, 2018 11:14 pm

oslocal wrote:
Wed Jan 24, 2018 11:03 pm
Thanks for the your suggestions. I should specify that this is a 401k. Otherwise it would have been a Vanguard account.

Thanks for the EWX suggestion, I'll probably use that.
Since it's a 401k I'll be putting in money twice a month and would therefore like to avoid transaction fee. Especially since I can get the vanguard funds free at vanguard.

I read that SWSSX "tracks" the Russell 2000, which is more small companies than the crsp index vanguard uses so I think that gives me a few options for now.
I prefer S&P600 over R2000, if available.

IJS/VIOV ETFs are the value funds. Companies are roughly half the size of Vanguards CRSP index.

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in_reality
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Re: Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by in_reality » Thu Jan 25, 2018 1:01 am

Choy wrote:
Wed Jan 24, 2018 10:18 pm
mickens16 wrote:
Wed Jan 24, 2018 9:49 pm
You can also use FNDA at Schwab.
My understanding is that FNDA is small-cap core, not value. If just looking for small-cap without value I would do SCHA.
I guess you can say the fundamental indexes aren't value funds if you want, but when energy tanked in recent years the fundamental indexes moved to have greater exposure than value funds did since energy market cap had plunged and they were weighted less in value indexes. Same with financials after the 2008/9 crisis.

SFSNX is the mutual fund version of FNDA. Since it's inception (Apr 2007 - Dec 2017 in portfolio visualizer), it's done better than VBR and SLYV:

SFSNX 9.05%
SLYV 8.8
VBR 8.13%.

It's more volatile though with a StDev of 21.21 (vs. 19.4 -20% for the others) and has a bigger max drawdown -57.00% vs about -55% for the others.

There are many posting examining the loads on the index (since it goes back further) and the fundamental indexes do have value loadings.

In some respects they are different as the methodology will result in less of a sector tilt than cap weighted value funds (with more in technology, energy and industrials and less in finance - although it depends on valuations as after the financial crisis it was heavier in financials), and the nine-box isn't as valuey.

That said, research has shown that book-to-market measures don't necessarily hit the value target as contributed capital leads to a high b/m but doesn't really capture value - retained earnings does. Thus DFA for instance introduced an earnings screen.

I use EWX, DGS and FNDE for emerging value. FNDA, VOE, and FNDX for US value. And FNDC and FNDF for international value. I also hold straight market cap weighted funds too. Actually EWX is not a value tilt by methodology and I include it as my straight market cap weighted fund. If you look at the sector distributions -- you can do this with Schwab's portfolio too- you can see it includes a lot in tech.

Not really sure if the value holdings will overcome the higher costs, but looking at the companies in the funds I am happier than going straight market cap. FNDC has been a really good fund in the recent past. FNDA and SFSNX have slightly underperformed in the recent few years compared to other value funds, but again going back to SFSNX's inception have done slightly better. That's too be expected I guess given the differing methodology.

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brother7
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Re: Help me Combine Schwab and Vanguard for Small and Value tilted Slice and Dice portfolio

Post by brother7 » Thu Jan 25, 2018 7:00 am

Paul Merriman, a small-cap and value evangelist, recently posted his Schwab recommendations for tax-deferred accounts. He stuck with the Schwab family of funds.

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