International Small-cap Value Funds ??

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
lazyday
Posts: 3297
Joined: Wed Mar 14, 2007 10:27 pm

Re: International Small-cap Value Funds ??

Post by lazyday » Fri Jan 19, 2018 11:06 am

jhfenton wrote:
Thu Jan 18, 2018 3:02 pm
The key is longer-term data. Over multiple years any first-day tracking issues or any first-year growing pains get averaged out.

One thing that causes end-date problems for Vanguard and most international mutual funds is fair value pricing. Indexes don't use fair-value pricing. (snip)
From a few minutes googling, I haven't found any ETFs other than Vanguard that seem to use fair value pricing. I assume NAV is generally the actual market pricing of underlying assets, even though these prices are often stale. I've seen descriptions of NAV calculations before, I believe they are either in the annual report, prospectus, or SAI. For example, the daily NAV might be calculated around the time US markets close, using the most recent security prices available. Depending on the index, it might be calculated at a different time than the fund calculates NAV. But unless there are markets that close after the US markets but on the same day, this shouldn't matter.

A few years ago I tried to figure this all out and gave up, deciding to try to use periods of 3 years or longer to compare NAV to the fund's index. Which keeps me away from new international/EM funds that aren't market weighted.

If I ever try to average out the NAV vs index comparison over a few readings (such as over a few months) I'll try to post it on the forum. ishares makes it very easy! You can select the end of the time period on the web page. So we could calculate NAV return vs index return since inception, ending Dec 31, Nov 30, and Oct 31, and compare and average the 3 readings. I suppose this won't fix an odd reading at the period starting day, but should reduce the error of the ending day. I don't plan to buy anytime soon so am not trying this yet.

User avatar
jhfenton
Posts: 3303
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: International Small-cap Value Funds ??

Post by jhfenton » Fri Jan 19, 2018 11:18 am

lazyday wrote:
Fri Jan 19, 2018 11:06 am
jhfenton wrote:
Thu Jan 18, 2018 3:02 pm
The key is longer-term data. Over multiple years any first-day tracking issues or any first-year growing pains get averaged out.

One thing that causes end-date problems for Vanguard and most international mutual funds is fair value pricing. Indexes don't use fair-value pricing. (snip)
From a few minutes googling, I haven't found any ETFs other than Vanguard that seem to use fair value pricing. I assume NAV is generally the actual market pricing of underlying assets, even though these prices are often stale.
Other mutual funds do fair-value pricing, but for ETFs, it's probably just Vanguard, since they literally have a patent on the ETF as a share class of a mutual fund. They have to keep the ETF NAV in line with the mutual fund NAV, since the mutual fund is convertible to the ETF at NAV.

Other ETFs don't care about a stale NAV.

hilink73
Posts: 280
Joined: Tue Sep 20, 2016 3:29 pm

Re: International Small-cap Value Funds ??

Post by hilink73 » Fri Jan 19, 2018 4:01 pm

Thanks for all the great input here!

Sum-day
Posts: 24
Joined: Sat Apr 13, 2013 1:58 pm

Re: International Small-cap Value Funds ??

Post by Sum-day » Fri Jan 19, 2018 4:29 pm

Here is an article from Paul M's site.

Best-in-Class ETFs for Ultimate Buy & Hold Portfolio (Updated November, 2017)

By Chris Pedersen

What’s the best set of ETFs to use if we want to implement Paul Merriman’s Ultimate Buy and Hold Portfolio as a DIY investor? That’s the question this article aims to address.

https://paulmerriman.com/best-in-class- ... portfolio/

User avatar
rustymutt
Posts: 3731
Joined: Sat Mar 07, 2009 12:03 pm
Location: Oklahoma

Re: International Small-cap Value Funds ??

Post by rustymutt » Sat Jan 20, 2018 9:55 am

golfCaddy wrote:
Wed Jan 17, 2018 9:54 pm
In terms of value, Russia is by far the cheapest country by p/e ratio, so you could look for a Russia specific ETF.
If you enjoy risk, then push on Comrade.
I'm amazed at the wealth of Knowledge others gather, and share over a lifetime of learning. The mind is truly unique. It's nice when we use it!

heyyou
Posts: 3132
Joined: Tue Feb 20, 2007 4:58 pm

Re: International Small-cap Value Funds ??

Post by heyyou » Sat Jan 20, 2018 5:54 pm

Note that Trev H was willing to settle for just using VG's ISB (international small blend) in his 4 x 25%, VG only funds, clone of Merriman's Ultimate B&H portfolio. Yes, the imprecision is an aggravation, but the need was to own low correlating funds and those served that purpose even with their imperfect holdings. Consider just accepting the imprecision of current offerings, expecting better and cheaper funds to be available in the distant future.

Sometimes when posters are striving for technical portfolio perfection here, merely saving more is also a reliable method of increasing the growth of their portfolios, more simple but less easy.

Post Reply