VBK [Vanguard Small Cap Growth]

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
User avatar
Meaty
Posts: 613
Joined: Mon Jul 22, 2013 7:35 pm
Location: Texas

VBK [Vanguard Small Cap Growth]

Post by Meaty » Tue May 15, 2018 12:07 pm

Who should consider holding VBK? I’m trying to understand if it would add value in my portfolio. My plan would be to hold it in my Roth account for 20+ years by lowering the holding of TSM

Appreciate everyone’s insight
"Discipline equals Freedom" - Jocko Willink

User avatar
ruralavalon
Posts: 13968
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: VBK

Post by ruralavalon » Tue May 15, 2018 2:05 pm

Meaty wrote:
Tue May 15, 2018 12:07 pm
Who should consider holding VBK? I’m trying to understand if it would add value in my portfolio. My plan would be to hold it in my Roth account for 20+ years by lowering the holding of TSM

Appreciate everyone’s insight
I have no personal experience with Vanguard Small-cap Growth ETF (VBK).

Share price of Vanguard Small-cap Growth ETF (VBK) has been beating Vanguard Total Stock Market Index Fund ETF (VTI). Morningstar, share price, VTI vs VBK.

But long-term small-cap growth has been a bad choice. "Small-cap growth stocks have been euphemistically called 'the Black Hole of Investing.' The reason is that they have produced the lowest returns of any of the major U.S. equity asset classes." Larry Swedroe, etf.com, "The 'Black hole of Investing' ". I would not use any small-cap growth fund or ETF.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

User avatar
triceratop
Moderator
Posts: 5654
Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

Re: VBK [Vanguard Small Cap Growth]

Post by triceratop » Tue May 15, 2018 2:14 pm

I edited the topic title to be a little more descriptive.

Meaty, it is often considered helpful to not speak in ticker language, but to describe the actual fund you are considering with its full, more descriptive name.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

MotoTrojan
Posts: 2287
Joined: Wed Feb 01, 2017 8:39 pm

Re: VBK [Vanguard Small Cap Growth]

Post by MotoTrojan » Tue May 15, 2018 2:22 pm

I prefer small-value as most do. Also the VG funds are quite large, more like 50/50 mid/small.

Check out VIOV. Half the median market cap.

User avatar
jhfenton
Posts: 3308
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

Re: VBK [Vanguard Small Cap Growth]

Post by jhfenton » Tue May 15, 2018 2:23 pm

Meaty wrote:
Tue May 15, 2018 12:07 pm
Who should consider holding VBK?
In my opinion, no one.

The typical recommendation for those who advocate tilting is to tilt toward small value (VBR/VSIAX). Small growth has typically been full of over-priced lottery-ticket stocks, and, as ruralavalon said, it has historically underperformed.

pkcrafter
Posts: 13074
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: VBK [Vanguard Small Cap Growth]

Post by pkcrafter » Tue May 15, 2018 2:24 pm

I agree with ruralavalon, and the small premium mainly comes from small value, although it's on again off again, so you do have to hold it for many years.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

User avatar
Meaty
Posts: 613
Joined: Mon Jul 22, 2013 7:35 pm
Location: Texas

Re: VBK

Post by Meaty » Tue May 15, 2018 3:26 pm

ruralavalon wrote:
Tue May 15, 2018 2:05 pm
Meaty wrote:
Tue May 15, 2018 12:07 pm
Who should consider holding VBK? I’m trying to understand if it would add value in my portfolio. My plan would be to hold it in my Roth account for 20+ years by lowering the holding of TSM

Appreciate everyone’s insight
I have no personal experience with Vanguard Small-cap Growth ETF (VBK).

Share price of Vanguard Small-cap Growth ETF (VBK) has been beating Vanguard Total Stock Market Index Fund ETF (VTI). Morningstar, share price, VTI vs VBK.

But long-term small-cap growth has been a bad choice. "Small-cap growth stocks have been euphemistically called 'the Black Hole of Investing.' The reason is that they have produced the lowest returns of any of the major U.S. equity asset classes." Larry Swedroe, etf.com, "The 'Black hole of Investing' ". I would not use any small-cap growth fund or ETF.
Thanks for the great info and link. Much appreciated
"Discipline equals Freedom" - Jocko Willink

User avatar
Meaty
Posts: 613
Joined: Mon Jul 22, 2013 7:35 pm
Location: Texas

Re: VBK [Vanguard Small Cap Growth]

Post by Meaty » Tue May 15, 2018 3:26 pm

triceratop wrote:
Tue May 15, 2018 2:14 pm
I edited the topic title to be a little more descriptive.

Meaty, it is often considered helpful to not speak in ticker language, but to describe the actual fund you are considering with its full, more descriptive name.
Will do. My apologies
"Discipline equals Freedom" - Jocko Willink

billfromct
Posts: 748
Joined: Tue Dec 03, 2013 9:05 am

Re: VBK [Vanguard Small Cap Growth]

Post by billfromct » Tue May 15, 2018 3:41 pm

I have the Vanguard Small Cap Value Index (PE 16.1) in my traditional IRA as well as my Roth IRA. The Small Cap Growth Index (PE 28.2) is too rich for my blood at this time in the market cycle.

If the market tanks, the high priced stocks are usually the ones to get hit first.

The Vanguard Small Cap Growth Index has out performed the Small Cap Value Index 6.9% to 1.3% so far this year (YTD).

bill

Post Reply