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Global value funds?

Posted: Thu Aug 04, 2016 3:30 pm
by Liquid
PIMCO RAE Fundamental Global Instl PFQIX

25k minimum investment at vanguard... otherwise 1,000,000! :moneybag

ER 0.5

2% Turnover

Anyone aware of any better / cheaper global value fund?

Re: Thoughts on this Global value fund?

Posted: Thu Aug 04, 2016 4:17 pm
by kosomoto
Liquid wrote:PIMCO RAE Fundamental Global Instl PFQIX

25k minimum investment at vanguard... otherwise 1,000,000! :moneybag

ER 0.5

2% Turnover

Anyone aware of any better / cheaper global value fund?
Ishares international value ETF has a lower expense ratio and obviously no minimum besides the share price. I personally prefer Vanguard's high international dividend ETF or the dividend appreciation ETF.

Re: Thoughts on this Global value fund?

Posted: Thu Aug 04, 2016 4:53 pm
by lack_ey
Right, do you really need a global value stock fund or are separate (and cheaper) US and ex-US funds acceptable?

Also, are you just targeting value or specifically seeking a fundamental-weighted approach, Research Affiliates/Rob Arnott style?

Re: Thoughts on this Global value fund?

Posted: Thu Aug 04, 2016 5:22 pm
by Liquid
lack_ey wrote:Right, do you really need a global value stock fund or are separate (and cheaper) US and ex-US funds acceptable?

Also, are you just targeting value or specifically seeking a fundamental-weighted approach, Research Affiliates/Rob Arnott style?
I am more interested in value rather than the specific approach. I suspect global rather than the component funds may be useful in avoiding behavioral mistakes.

Re: Thoughts on this Global value fund?

Posted: Thu Aug 04, 2016 9:53 pm
by whodidntante
Cambria global value is worth considering. The ticker is GVAL. I'm considering buying it myself, about 20k worth. First I need to decide what I think about Meb Faber.

Re: Thoughts on this Global value fund?

Posted: Fri Aug 05, 2016 5:24 am
by Barry Barnitz
Hi:

As of August 5, 2016 Meb Faber has the current top downloaded paper on the SSRN Financial Economics Network.

Faber, Meb, The Trinity Portfolio: A Long-Term Investing Framework Engineered for Simplicity, Safety, and Outperformance (July 2, 2016). CQR, Issue 9, June 2016. Available at SSRN: http://ssrn.com/abstract=2801856
Abstract:
Let’s say one sets out to design a portfolio, knowing everything we know today about investing. Where would a logical, evidence-based investor even start? Investors today have access to more market data and strategic information than at any other time in history. While beneficial in some ways, this huge volume of fragmented information presents a challenge — how should one actually implement everything? This paper offers a potential solution – the “Trinity Portfolio.” The name is a reference to the three core elements of the portfolio: 1) assets diversified across a global investment set, 2) tilts toward investments exhibiting value and momentum traits, and 3) exposure to trend following. We examine how an investor might construct this holistic, adaptive framework consisting of some of the most well-known market anomalies. We find that the portfolio performs well across various market environments, with reasonable volatility. Finally, we examine how an investor may update and implement such a portfolio with low cost funds.

Number of Pages in PDF File: 24
regards,

Re: Thoughts on this Global value fund?

Posted: Fri Aug 05, 2016 11:41 am
by Liquid
whodidntante wrote:Cambria global value is worth considering. The ticker is GVAL. I'm considering buying it myself, about 20k worth. First I need to decide what I think about Meb Faber.
This seems like a less palatable option with 133 stocks, ER 0.69, 15% turnover

Re: Thoughts on this Global value fund?

Posted: Fri Aug 05, 2016 11:50 am
by Liquid
Barry Barnitz wrote:Hi:

As of August 5, 2016 Meb Faber has the current top downloaded paper on the SSRN Financial Economics Network.

Faber, Meb, The Trinity Portfolio: A Long-Term Investing Framework Engineered for Simplicity, Safety, and Outperformance (July 2, 2016). CQR, Issue 9, June 2016. Available at SSRN: http://ssrn.com/abstract=2801856
Abstract:
Let’s say one sets out to design a portfolio, knowing everything we know today about investing. Where would a logical, evidence-based investor even start? Investors today have access to more market data and strategic information than at any other time in history. While beneficial in some ways, this huge volume of fragmented information presents a challenge — how should one actually implement everything? This paper offers a potential solution – the “Trinity Portfolio.” The name is a reference to the three core elements of the portfolio: 1) assets diversified across a global investment set, 2) tilts toward investments exhibiting value and momentum traits, and 3) exposure to trend following. We examine how an investor might construct this holistic, adaptive framework consisting of some of the most well-known market anomalies. We find that the portfolio performs well across various market environments, with reasonable volatility. Finally, we examine how an investor may update and implement such a portfolio with low cost funds.

Number of Pages in PDF File: 24
regards,
Thanks for sharing it is an interesting read!

The global asset allocation portfolio has shades of "the permanent portfolio" with 25% stocks, long term bonds, and gold... all that was old is new again

Cambria Global Asset Allocation ETF (GAA) is interesting with 0.29 ER, 8% turnover, if one can wrap their head around the portfolio construction

Re: Thoughts on this Global value fund?

Posted: Fri Aug 05, 2016 1:36 pm
by freyj6
whodidntante wrote:Cambria global value is worth considering. The ticker is GVAL. I'm considering buying it myself, about 20k worth. First I need to decide what I think about Meb Faber.
I feel similarly. If Vanguard had a really deep value fund, I'd be all over it, but watching all Meb's other ETFs underperform begs the question: Is value cheap, or is the implementation of this strategy bad?

Re: Global value funds?

Posted: Fri Aug 05, 2016 2:10 pm
by hirlaw
A great fund, but expensive, is Tweedy Brown Global Value (TBGVX). Has a 1% turnover rate.

Re: Global value funds?

Posted: Fri Aug 05, 2016 5:09 pm
by Morik
My goal for my equities in my IPS is (slightly simplified, but its irrelevant for this discussion):
- 50% large cap blend/total market, 50% Tilt to small value, market weight international

So that would be (roughly):
25% intl large cap blend (or total market)
25% intl small cap value
25% US large cap blend (or total market)
25% US small cap value

Investigating small cap value, I found it to be hard to get what I wanted.
So I compromised.

For international, I do:
- 50% total market (my 401k has total intl market cheap, doesn't have intl large cap blend)
- 30% small cap value (EWX) -- M* breakdown shows this is 33% developed markets, 67% emerging, despite the name of the fund (emerging markets is in the name)
- 20% small blend (VSS) -- gives decent coverage of developed markets too, though it isn't really valuey, it should hit the size premium.

If in the future there is a fund that hits very small, very valuey, and all markets (not just emerging), I'd move to it from EWX & VSS.

So why not just 50% EWX? I didn't want just emerging markets in my intl value tilt.
If I found a developed-markets-only fund with similar characteristics (deep value, very small), I'd drop VSS for it in an instant and go 25% EWX, 25% that fund.

Unfortunately the options for international developed-markets-only or all-markets are either:
- Too large in cap size (PFQIX, TBGVX for the 2 mentioned in this thread, various other funds aiming at international value are large cap too)
- Too small in terms of how much is invested in the fund (liquidity), or too small in # of holdings (diversification). E.g., GVAL. (GVAL isn't quite large cap, but it does hold large & huge cap as well as small & micro; I'd prefer just small & micro)

I think one simplification I may do (needs some thought) is to just use EWX and drop VSS. On the plus side EWX is both smaller (not by a ton) and more valuey than VSS. On the other hand I would lose out on tilting to small caps in UK, Europe, and Japan (looking at VSS vs EWX's world regions in morningstar). (Of course, my 50% intl total market does cover small caps in those areas at least a little, so...)


Anyway, hopefully you'll find my thought process here helpful in how you go about choosing to fulfill your international value requirements.

Re: Global value funds?

Posted: Fri Aug 05, 2016 5:19 pm
by RyeWhiskey
I used to think about all these different options, strategies, theories, tactics, etc. But then I settled on the Total World Index and sleep better thanks to the simplicity of not overthinking. I'd also wager that it outperforms all these strategies over the long run, not necessarily because it will have a higher return, but because I doubt that folks who think so hard about something now will be able to stay the course without thinking so hard about something else later and modifying their allocation. Just my two cents. :beer

Re: Global value funds?

Posted: Fri Aug 05, 2016 5:24 pm
by Morik
RyeWhiskey wrote:I used to think about all these different options, strategies, theories, tactics, etc. But then I settled on the Total World Index and sleep better thanks to the simplicity of not overthinking. I'd also wager that it outperforms all these strategies over the long run, not necessarily because it will have a higher return, but because I doubt that folks who think so hard about something now will be able to stay the course without thinking so hard about something else later and modifying their allocation. Just my two cents. :beer
^ You may wanna listen to him.
Evidence he may be correct: See my post above his where I'm wondering if I should alter my allocation by the end of the post :)

Re: Global value funds?

Posted: Fri Aug 05, 2016 5:53 pm
by daffyd
I don't know of any cheap global (incl US) value strategies. I'm not sure there's a big market for them in the US as if you're already slicing the market with value you'll tend to have a view on your international exposure also.

Funnily enough Vanguard have a global value strategy but it's a ucits fund suitable for Europe/UK purchasers (tax consequences would be horrible for a US person).

If I were looking at value using available us-listed etfs (as I do) I would be inclined to use a small or mid-cap value ETF for my US value exposure (which I do). For international I'm disappointed by the relatively high expense ratios but will likely eventually jump on ivlu or fndf. IVLU is basically what I want, sector neutral, relatively deep value, fees 0.3% p.a. But AUM are currently about $40m so I'm not yet comfortable holding it outside a tax-advantaged account due to (probably over-thought) risk of closure or strategy change if the ETF is unsuccessful. Otherwise FNDF is probably good enough at 0.32% p.a. so once life settles down I may jump on one of those two.

Re: Global value funds?

Posted: Fri Aug 05, 2016 7:51 pm
by in_reality
daffyd wrote:Otherwise FNDF is probably good enough at 0.32% p.a. so once life settles down I may jump on one of those two.
I hold FNDF but question sometimes question why. International large caps will have have more exposure to the US economy than FNDC the small caps fund would. I do overweight FNDC.

Anyway, is EWX really a value fund? I think it's market cap weighted and just cut off in terms of size. It looks like value by the 9 box, but I don't think the index is screening the holding on anything other than size.

Re: Global value funds?

Posted: Fri Aug 05, 2016 10:34 pm
by wije
daffyd wrote:Funnily enough Vanguard have a global value strategy but it's a ucits fund suitable for Europe/UK purchasers (tax consequences would be horrible for a US person).
I find it odd how Vanguard's VYMI is more valuey than its int'l value fund VTRIX.

Re: Global value funds?

Posted: Sun Aug 07, 2016 9:06 pm
by Liquid
Morik wrote:
RyeWhiskey wrote:I used to think about all these different options, strategies, theories, tactics, etc. But then I settled on the Total World Index and sleep better thanks to the simplicity of not overthinking. I'd also wager that it outperforms all these strategies over the long run, not necessarily because it will have a higher return, but because I doubt that folks who think so hard about something now will be able to stay the course without thinking so hard about something else later and modifying their allocation. Just my two cents. :beer
^ You may wanna listen to him.
Evidence he may be correct: See my post above his where I'm wondering if I should alter my allocation by the end of the post :)
Lol, I have actually been thinking about this! :sharebeer I may go Total World in taxable, and curtail any "strategies" to the smaller tax advantaged space.

Re: Global value funds?

Posted: Mon Aug 08, 2016 1:21 pm
by RyeWhiskey
Liquid wrote:
Morik wrote:
RyeWhiskey wrote:I used to think about all these different options, strategies, theories, tactics, etc. But then I settled on the Total World Index and sleep better thanks to the simplicity of not overthinking. I'd also wager that it outperforms all these strategies over the long run, not necessarily because it will have a higher return, but because I doubt that folks who think so hard about something now will be able to stay the course without thinking so hard about something else later and modifying their allocation. Just my two cents. :beer
^ You may wanna listen to him.
Evidence he may be correct: See my post above his where I'm wondering if I should alter my allocation by the end of the post :)
Lol, I have actually been thinking about this! :sharebeer I may go Total World in taxable, and curtail any "strategies" to the smaller tax advantaged space.
Good call. I currently hold Total World in taxable. Don't let the mutual fund ER dissuade you, it's gone down several times since I started holding it and the ETF is affordable. When admiral shares are created it'll be a perfect all-in-one equity fund. :beer

Re: Global value funds?

Posted: Mon Aug 08, 2016 4:23 pm
by Doc
Liquid wrote:PIMCO RAE Fundamental Global Instl PFQIX

25k minimum investment at vanguard... otherwise 1,000,000! :moneybag

ER 0.5

2% Turnover

Anyone aware of any better / cheaper global value fund?
PFQIX minimum at Schwab $2500 basic, $1000 IRA

Re: Global value funds?

Posted: Mon Aug 08, 2016 4:33 pm
by asset_chaos
Total world is my core equity investment, but I want some small-value tilt. I would prefer a global small-value fund, but clearly that's an unpopular investment: of the thousands of wacky etfs launched not one has been a global small-value factor fund. To roughly approximate global small-value, I use the Vanguard small value fund and Wisdomtree's small developed and small emerging dividend funds (dls and dgs) with a ratio of 2:1:1.

Re: Global value funds?

Posted: Tue Aug 09, 2016 5:08 am
by Valuethinker
asset_chaos wrote:Total world is my core equity investment, but I want some small-value tilt. I would prefer a global small-value fund, but clearly that's an unpopular investment: of the thousands of wacky etfs launched not one has been a global small-value factor fund. To roughly approximate global small-value, I use the Vanguard small value fund and Wisdomtree's small developed and small emerging dividend funds (dls and dgs) with a ratio of 2:1:1.
Problem may be the difficulty of construction.

I do use small value (regional) stock ETFs. Ishares (UK) does a few.

Re: Global value funds?

Posted: Tue Aug 09, 2016 4:38 pm
by asset_chaos
Valuethinker wrote:
asset_chaos wrote:Total world is my core equity investment, but I want some small-value tilt. I would prefer a global small-value fund, but clearly that's an unpopular investment: of the thousands of wacky etfs launched not one has been a global small-value factor fund. To roughly approximate global small-value, I use the Vanguard small value fund and Wisdomtree's small developed and small emerging dividend funds (dls and dgs) with a ratio of 2:1:1.
Problem may be the difficulty of construction.

I do use small value (regional) stock ETFs. Ishares (UK) does a few.
Possibly construction is the problem for fund companies. But there are indices. For example MSCI has
The MSCI ACWI Small Cap Value Index captures small cap securities exhibiting overall value style characteristics across 23 Developed
Markets (DM) countries* and 23 Emerging Markets (EM) countries*. The value investment style characteristics for index construction are
defined using three variables: book value to price, 12-month forward earnings to price and dividend yield. With 3,779 constituents, the
index targets 14% coverage of the free float-adjusted market capitalization in each country
Of course, it's easier to make an index than an investable product, but there are building blocks, just no one wanting to build.