Portfolio Review

[manlymatt83]

I've settled on a portfolio, so would like input with more information:

• 36 year old

• Aggressive, 35+ year horizon

• Factor investing / increased risk/reward is important to me

• Personal life is technology, so want to avoid increased ETF exposure to that if I can.

• Love factor investing, especially to size & value

Portfolio:

10% REIT (small mix of $O, larger of $SCHH)
15% Vanguard Total World ($VT)
25% $SLYV (SPDR® S&P 600 Small Cap Value ETF)
25% $VFMF (Vanguard Multifactor ETF)
15% $DLS (WisdomTree International SmallCap Dividend Fund)
10% $DGS (WisdomTree Emerging Market SmallCap Dividend Fund)

Question:

When X-raying this portfolio, I don't have large cap value exposure, I believe because $VFMF isn't as large cap value-ee... though I could be wrong. In that case, should I add a large cap value ETF to make my large cap exposure more value and less growth or just trust $VFMF will re-balance over time and may lean more one way or the other depending on factors?

[KingRiggs]

You will receive more replies and more thoughtful replies by listing the actual fund names and their expense ratios. Most of us do not have an encyclopedic knowledge of fund abbreviations or the inclination to Google them.

Best of fortune!

[manlymatt83]

Will update now, thank you!

[megabad]

Well I would say that if you are concerned specifically with large cap value exposure than maybe Vanguard Multifactor isn't for you. That said, it is pretty strongly large value right now in my opinion judging by P/E, P/B and top holdings. I would not trust that SVFMF would do anything other than what Vanguard Quant group instructs it to. I would only invest in it if you believe in their ability to perform in a desirable way over your investment time horizon. Your chosen portfolio is a bit unusual here on the forums so I am trying to limit my response to your explicit question specifically and not offer unsolicited opinion.

[retired@50]

You could construct a new "pretend" portfolio which includes some percentage invested in VTV (Vanguard Large Value ETF) and see if you like the X-ray results any better... If you do, buy some. Regards,

[1789]

Op
Just curious, how did you pick funds on your portfolio? It is most likely that future will be different than past but did your portfolio stands out strong against VTSAX during the funds lifetime? My humble opinion is you have a lot of funds. I wish you best luck

[snailderby]

VFMF is (by design) roughly 1/3 large cap, 1/3 mid cap, and 1/3 small cap.

Edit: Sorry. I think I misunderstood your question. Are you concerned that VFMF isn't valuey enough?

[manlymatt83]

VFMF is (by design) roughly 1/3 large cap, 1/3 mid cap, and 1/3 small cap.

Edit: Sorry. I think I misunderstood your question. Are you concerned that VFMF isn't valuey enough?

Yes. My ideal scenario would be that I would have a slight tilt to LCV (and perhaps MCV) and an even larger tilt to SCV.

But with $VFMF and $SLYV/DJS/DGS, it seems I'm mostly small cap value and large cap blend/growth.

So adding something to get a little more LCV tilt would make me happier, but I'm also trying to keep things simple.

Perhaps my REIT allocation could be in LCV? Two birds with one stone?

[manlymatt83]

Op
Just curious, how did you pick funds on your portfolio? It is most likely that future will be different than past but did your portfolio stands out strong against VTSAX during the funds lifetime? My humble opinion is you have a lot of funds. I wish you best luck

I'm mostly trying to keep it simple: a solid core with $VFMF, then small cap value tilt + international with SLYV/DJS/DGS.

[manlymatt83]

You could construct a new "pretend" portfolio which includes some percentage invested in VTV (Vanguard Large Value ETF) and see if you like the X-ray results any better... If you do, buy some. Regards,

Curious, what tool do you use for this? I used to have access to Morningstar, but now have been using Portfolio Visualizer. But I see the results are sometimes different.

[manlymatt83]

Well I would say that if you are concerned specifically with large cap value exposure than maybe Vanguard Multifactor isn't for you. That said, it is pretty strongly large value right now in my opinion judging by P/E, P/B and top holdings. I would not trust that SVFMF would do anything other than what Vanguard Quant group instructs it to. I would only invest in it if you believe in their ability to perform in a desirable way over your investment time horizon. Your chosen portfolio is a bit unusual here on the forums so I am trying to limit my response to your explicit question specifically and not offer unsolicited opinion.

I'm happy to hear your unsolicited opinion! I'm trying to keep things simple but at the same time don't want an over-complicated mess.

My ideal goal would be a solid core fund with some increased risk/reward -- VFMF seems to fit this bill. I also believe in the tilt factor, and Paul Merriman is a big fan of SLYV/DJS/DGS though I've considered VFVA instead which might accomplish everything I want. But holding VFMF, VFVA and SLYV/DJS/DGS seems like too much.

[retired@50]

You could construct a new "pretend" portfolio which includes some percentage invested in VTV (Vanguard Large Value ETF) and see if you like the X-ray results any better... If you do, buy some. Regards,

Curious, what tool do you use for this? I used to have access to Morningstar, but now have been using Portfolio Visualizer. But I see the results are sometimes different.

I don't typically consider deviating from the overall market in any meaningful way. I have a Vanguard account, so I use their Portfolio Watch tool to see what parts of my portfolio may need additions/subtractions. Since I'm no longer in accumulation mode, Portfolio Watch can help me know what to sell when I next need some money from my portfolio.
Regards,

[snailderby]

You can access Morningstar's X-ray feature through TD Ameritrade: https://www.tdameritrade.com/education/ ... -xray.page.