Thoughts about Vanguard Small Cap Growth ETF?

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Jesteroftheswamp
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Thoughts about Vanguard Small Cap Growth ETF?

Post by Jesteroftheswamp » Sat Oct 06, 2018 2:19 pm

The majority of my holdings are currently Vanguard Total Stock index, and I also have a few ther mutual funds including the Small Cap Value Fund.

I am looking to potentially add the Small cap Growh Fund and was hoping to hear some opinions on this Fund. My time horizon is over five years and I won’t need the money should the market take a dip. I am only lookin at Investing about 2 grand or so into this Fund for the time being. What are thoughts on VANGUARD SMALL CAP GROWTH FUND?

lessismoreinvestor
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Re: Thoughts about Vanguard Small Cap Growth ETF?

Post by lessismoreinvestor » Sat Oct 06, 2018 2:33 pm

I myself am a Total stock index fan, but with that being said I do tilt a little to small stock just to catch that growth potential. It is not uncommon to have small stock tilt. Understand why you are doing it though?

Currently, mine is around 10% of my portfolio. I would not recommend to much more than that.

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ruralavalon
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Re: Thoughts about Vanguard Small Cap Growth ETF?

Post by ruralavalon » Sat Oct 06, 2018 3:29 pm

Jesteroftheswamp wrote:
Sat Oct 06, 2018 2:19 pm
The majority of my holdings are currently Vanguard Total Stock index, and I also have a few ther mutual funds including the Small Cap Value Fund.

I am looking to potentially add the Small cap Growh Fund and was hoping to hear some opinions on this Fund. My time horizon is over five years and I won’t need the money should the market take a dip. I am only lookin at Investing about 2 grand or so into this Fund for the time being. What are thoughts on VANGUARD SMALL CAP GROWTH FUND?
Historically small-cap growth stocks "have produced the lowest returns of any of the major U.S. equity asset classes." Larry Swedroe, etf.com (10/11/2013), "The 'Black hole of Investing' ". That article shows both the annualized returns and the annual standard deviations for the period 1927-2012 (75 years).
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

MotoTrojan
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Re: Thoughts about Vanguard Small Cap Growth ETF?

Post by MotoTrojan » Sat Oct 06, 2018 3:33 pm

If you want small use S&P600 via IJR, VIOO, etc. most prefer small-value. 5 years is way too short for this type of fund.

Jesteroftheswamp
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Re: Thoughts about Vanguard Small Cap Growth ETF?

Post by Jesteroftheswamp » Sat Oct 06, 2018 4:53 pm

MotoTrojan wrote:
Sat Oct 06, 2018 3:33 pm
If you want small use S&P600 via IJR, VIOO, etc. most prefer small-value. 5 years is way too short for this type of fund.
Why do you think five years is way too short for this type of fund?

justsomeguy2018
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Re: Thoughts about Vanguard Small Cap Growth ETF?

Post by justsomeguy2018 » Sat Oct 06, 2018 6:35 pm

ruralavalon wrote:
Sat Oct 06, 2018 3:29 pm
Jesteroftheswamp wrote:
Sat Oct 06, 2018 2:19 pm
The majority of my holdings are currently Vanguard Total Stock index, and I also have a few ther mutual funds including the Small Cap Value Fund.

I am looking to potentially add the Small cap Growh Fund and was hoping to hear some opinions on this Fund. My time horizon is over five years and I won’t need the money should the market take a dip. I am only lookin at Investing about 2 grand or so into this Fund for the time being. What are thoughts on VANGUARD SMALL CAP GROWTH FUND?
Historically small-cap growth stocks "have produced the lowest returns of any of the major U.S. equity asset classes." Larry Swedroe, etf.com (10/11/2013), "The 'Black hole of Investing' ". That article shows both the annualized returns and the annual standard deviations for the period 1927-2012 (75 years).
If that is the case, do you think it is even worth having a small cap fund? I have about $300 in a Fidelity small cap index.

typical.investor
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Re: Thoughts about Vanguard Small Cap Growth ETF?

Post by typical.investor » Sat Oct 06, 2018 6:53 pm

justsomeguy2018 wrote:
Sat Oct 06, 2018 6:35 pm
ruralavalon wrote:
Sat Oct 06, 2018 3:29 pm
Jesteroftheswamp wrote:
Sat Oct 06, 2018 2:19 pm
The majority of my holdings are currently Vanguard Total Stock index, and I also have a few ther mutual funds including the Small Cap Value Fund.

I am looking to potentially add the Small cap Growh Fund and was hoping to hear some opinions on this Fund. My time horizon is over five years and I won’t need the money should the market take a dip. I am only lookin at Investing about 2 grand or so into this Fund for the time being. What are thoughts on VANGUARD SMALL CAP GROWTH FUND?
Historically small-cap growth stocks "have produced the lowest returns of any of the major U.S. equity asset classes." Larry Swedroe, etf.com (10/11/2013), "The 'Black hole of Investing' ". That article shows both the annualized returns and the annual standard deviations for the period 1927-2012 (75 years).
If that is the case, do you think it is even worth having a small cap fund? I have about $300 in a Fidelity small cap index.
Well the article is using French-Fama data to draw conclusions about small growth, but aren’t the worst performers generally screened from indexes for being univestible anyway? That’s what I believe I was told here anyway.

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ruralavalon
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Re: Thoughts about Vanguard Small Cap Growth ETF?

Post by ruralavalon » Sun Oct 07, 2018 10:08 am

justsomeguy2018 wrote:
Sat Oct 06, 2018 6:35 pm
ruralavalon wrote:
Sat Oct 06, 2018 3:29 pm
Jesteroftheswamp wrote:
Sat Oct 06, 2018 2:19 pm
The majority of my holdings are currently Vanguard Total Stock index, and I also have a few ther mutual funds including the Small Cap Value Fund.

I am looking to potentially add the Small cap Growh Fund and was hoping to hear some opinions on this Fund. My time horizon is over five years and I won’t need the money should the market take a dip. I am only lookin at Investing about 2 grand or so into this Fund for the time being. What are thoughts on VANGUARD SMALL CAP GROWTH FUND?
Historically small-cap growth stocks "have produced the lowest returns of any of the major U.S. equity asset classes." Larry Swedroe, etf.com (10/11/2013), "The 'Black hole of Investing' ". That article shows both the annualized returns and the annual standard deviations for the period 1927-2012 (75 years).
If that is the case, do you think it is even worth having a small cap fund? I have about $300 in a Fidelity small cap index.
That is a reason for usinng a small-cap value fund or small-cap blend fund instead of small-cap "growth" fund.

For what its worth, we use Vanguard Small-cap Value Fund Admiral Shares (VSIAX) ER 0.07%.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

MotoTrojan
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Re: Thoughts about Vanguard Small Cap Growth ETF?

Post by MotoTrojan » Sun Oct 07, 2018 4:08 pm

Jesteroftheswamp wrote:
Sat Oct 06, 2018 4:53 pm
MotoTrojan wrote:
Sat Oct 06, 2018 3:33 pm
If you want small use S&P600 via IJR, VIOO, etc. most prefer small-value. 5 years is way too short for this type of fund.
Why do you think five years is way too short for this type of fund?
Most would agree five years is too short for a broad market equity fund too. High chance you lose value by the time you need it. Equities should be for 10, maybe 15 year or longer holding periods.

asif408
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Re: Thoughts about Vanguard Small Cap Growth ETF?

Post by asif408 » Wed Oct 17, 2018 2:46 pm

ruralavalon wrote:
Sat Oct 06, 2018 3:29 pm
Jesteroftheswamp wrote:
Sat Oct 06, 2018 2:19 pm
The majority of my holdings are currently Vanguard Total Stock index, and I also have a few ther mutual funds including the Small Cap Value Fund.

I am looking to potentially add the Small cap Growh Fund and was hoping to hear some opinions on this Fund. My time horizon is over five years and I won’t need the money should the market take a dip. I am only lookin at Investing about 2 grand or so into this Fund for the time being. What are thoughts on VANGUARD SMALL CAP GROWTH FUND?
Historically small-cap growth stocks "have produced the lowest returns of any of the major U.S. equity asset classes." Larry Swedroe, etf.com (10/11/2013), "The 'Black hole of Investing' ". That article shows both the annualized returns and the annual standard deviations for the period 1927-2012 (75 years).
Ironically, the "black hole" of investing has outperformed small cap value and the S&P since 2002 (more than 16 years): https://www.portfoliovisualizer.com/bac ... ion3_3=100

It has even beaten the DFA SCV fund over the same time frame: https://www.portfoliovisualizer.com/bac ... ion3_3=100

MotoTrojan
Posts: 2485
Joined: Wed Feb 01, 2017 8:39 pm

Re: Thoughts about Vanguard Small Cap Growth ETF?

Post by MotoTrojan » Wed Oct 17, 2018 2:48 pm

asif408 wrote:
Wed Oct 17, 2018 2:46 pm
ruralavalon wrote:
Sat Oct 06, 2018 3:29 pm
Jesteroftheswamp wrote:
Sat Oct 06, 2018 2:19 pm
The majority of my holdings are currently Vanguard Total Stock index, and I also have a few ther mutual funds including the Small Cap Value Fund.

I am looking to potentially add the Small cap Growh Fund and was hoping to hear some opinions on this Fund. My time horizon is over five years and I won’t need the money should the market take a dip. I am only lookin at Investing about 2 grand or so into this Fund for the time being. What are thoughts on VANGUARD SMALL CAP GROWTH FUND?
Historically small-cap growth stocks "have produced the lowest returns of any of the major U.S. equity asset classes." Larry Swedroe, etf.com (10/11/2013), "The 'Black hole of Investing' ". That article shows both the annualized returns and the annual standard deviations for the period 1927-2012 (75 years).
Ironically, the "black hole" of investing has outperformed small cap value and the S&P since 2002 (more than 16 years): https://www.portfoliovisualizer.com/bac ... ion3_3=100

It has even beaten the DFA SCV fund over the same time frame: https://www.portfoliovisualizer.com/bac ... ion3_3=100
What about since 1999? You are data-mining to a period where growth stocks had just gotten hammered, with value stocks maintaining their value far better.

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