Rational Reminder 228: Avantis CIO Eduardo Repetto.

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Apathizer
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Rational Reminder 228: Avantis CIO Eduardo Repetto.

Post by Apathizer »

Many of us have been intently anticipating this episode of Rational Reminder featuring Avantis CIO Eduardo Repetto. I'm exhausted, so haven't listened/read it yet. I'm really looking forward to this episode and the discussions on this thread. :D
https://rationalreminder.ca/podcast/228
ROTH: 70% AVGE, 30% BNDW. Taxable: 50% BNDW, 50% AVGE.
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nedsaid
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Re: Rational Reminder 228: Avantis CIO Eduardo Repetto.

Post by nedsaid »

I am a Ben Felix fan, I also like Eduardo Repetto who runs Avantis, which is a DFA mini-me and a subsidiary of American Century Investments. Haven't listened to the whole thing but a few takeaways so far:

1) As a subsidiary of American Century Investments, Avantis is free to focus on just investing clients money. Avantis has no IT department, no Accounting department, no Human Resources department. American Century does all that back office work for them.

2) He said that factors have varying definitions and you need to take this into account when doing your analysis.

3) He talked about the advantages of the ETF structure, one of which is not having to have cash on hand to meet redemptions. As shares of the ETF are created by the authorized participant, securities and not cash are delivered to the fund managers. Conversely, when shares are redeemed, the fund managers deliver shares to the authorized participant. So shareholders of an ETF don't have to bear the costs and tax burden that come from the actions of other shareholders. In other words, shareholders selling their ETF shares don't create capital gains within the portfolio for the remaining ETF shareholders. This makes the ETF structure more tax efficient.

4) Repetto said that success in life for him was having a great wife, three grown sons that he is very proud of, a great extended family, great friends, and a very good job with good colleagues to work with.

5) Repetto said there were a couple of ways of managing for excess returns: 1) Concentrating on Stocks with higher expected returns and minimizing Stocks with lower expected returns; and 2) looking at Factor premiums. He cautioned that
there are different definitions of factors, only some factors drive excess returns, and there are factors that exist that don't generate excess returns but might be useful for hedging purposes.
A fool and his money are good for business.
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