Small Cap Value heads Rejoice !!!

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MotoTrojan
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

caklim00 wrote: Wed Sep 16, 2020 10:46 am I'm still not sure about momentum with small caps. Seems the transaction costs associated with the turnover is much higher in the small cap space. This was one thing that drew me towards Avantis is that they have some screens to avoid negative momentum and delay selling a stock exhibiting positive momentum but don't specifically target momentum stocks like they do with value and profitability. I will definitely be happier when there is more data to run the regressions against.
Likewise. Some aggressive value funds like VFVA and QVAL have pretty significant negative momentum, but cap-weighted ones like SLYV/VBR seem so low that it isn't worth worrying about. Ex-US funds I have seen a bit more. EDIT: WOW RZV since inception with a -0.49 momentum loading :shock:. Good luck cancelling that out.

I agree I'd rather avoid it (Avantis style) rather than neutralize it, and if I did neutralize it I would prefer a separate dedicated fund (MTUM) rather than composite weighting value & momentum together.
manlymatt83
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Re: Small Cap Value heads Rejoice !!!

Post by manlymatt83 »

Steve Reading wrote: Wed Sep 16, 2020 10:59 am Now if you've finally decided factors produce outperformance and higher risk-adjusted returns, then you should tilt as much as your tracking error will withstand. Why wouldn't you, it's a free lunch! So you'd go 100% VFMF in your USA holding perhaps, adding VTI only to the extent you need to stay the course.

That's one way to think about it.
Interesting point. So depending on beliefs, you’d be a proponent of someone having 100% of their portfolio in 60% VFMF, 40% VXUS?
YRT70
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Re: Small Cap Value heads Rejoice !!!

Post by YRT70 »

Steve Reading wrote: Wed Sep 16, 2020 10:59 am I recommend you first take a step back and think about what your beliefs are.
Yes that makes sense. But I'm fairly agnostic. The way I see it the data is just the data. I do believe that tilting to small and value vs. only holding TSM improves diversification. I also believe it's more likely that small value will outperform TSM over the next decade than the other way around.

But the fact that there are so many ways to calculate factor exposure makes it hard for me to make decisions. I have some education in statistics but it's not good enough to get to the bottom of it. And the fact that there's a lot of disagreement between the smart people about the other factors (momentum and low volatility come to mind) makes it even harder to make decisions.

Perhaps an idea for some of the factor enthusiasts in this thread to come up with sample portfolios. Iirc Vineviz created one a while back.
MotoTrojan
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

manlymatt83 wrote: Wed Sep 16, 2020 11:58 am
Steve Reading wrote: Wed Sep 16, 2020 10:59 am Now if you've finally decided factors produce outperformance and higher risk-adjusted returns, then you should tilt as much as your tracking error will withstand. Why wouldn't you, it's a free lunch! So you'd go 100% VFMF in your USA holding perhaps, adding VTI only to the extent you need to stay the course.

That's one way to think about it.
Interesting point. So depending on beliefs, you’d be a proponent of someone having 100% of their portfolio in 60% VFMF, 40% VXUS?
If you believed factors would out-perform, I presume you'd hold an international allocation that also got exposure to said factors.

My allocation likely has deeper factor exposure than 60/40 VFMF/VXUS for what it's worth.
manlymatt83
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Re: Small Cap Value heads Rejoice !!!

Post by manlymatt83 »

YRT70 wrote: Wed Sep 16, 2020 12:11 pm
Steve Reading wrote: Wed Sep 16, 2020 10:59 am I recommend you first take a step back and think about what your beliefs are.
... for some of the factor enthusiasts in this thread to come up with sample portfolios. Iirc Vineviz created one a while back.
I second this. It would be awesome to see some sample portfolios that combine the likes of VTI, VXUS, VFMF, SLYV, AVUV, AVDV, DGS, etc. Paul Merriman does a great job of outlining his portfolios around 100% SLYV/IJS, DLS, and DGS, though I presume he will replace SLYV/IJS with AVUV and DLS with AVDV in upcoming months... though perhaps they're still too new for him.

That being said, I once asked if I could have VFMF as my core US holding, and then tilt via SLYV or AVUV, and was told that I would have conflicting factors. Never really fully understood that.
manlymatt83
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Re: Small Cap Value heads Rejoice !!!

Post by manlymatt83 »

MotoTrojan wrote: Wed Sep 16, 2020 12:15 pm My allocation likely has deeper factor exposure than 60/40 VFMF/VXUS for what it's worth.
As does mine, as I'm now 50% VTI/VXUS, and 50% AVUV/AVDV/DGS.
YRT70
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Re: Small Cap Value heads Rejoice !!!

Post by YRT70 »

manlymatt83 wrote: Wed Sep 16, 2020 12:16 pm I presume he will replace SLYV/IJS with AVUV and DLS with AVDV in upcoming months...
I think so too. Ben Felix has indirectly said he will use AVUV instead of IJS. His model portfolio should come out soon.
MotoTrojan
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

manlymatt83 wrote: Wed Sep 16, 2020 12:17 pm
MotoTrojan wrote: Wed Sep 16, 2020 12:15 pm My allocation likely has deeper factor exposure than 60/40 VFMF/VXUS for what it's worth.
As does mine, as I'm now 50% VTI/VXUS, and 50% AVUV/AVDV/DGS.
25% VVIAX (VTV)
25% VSIAX (VBR)
15% QVAL
25% FNDC
10% IVAL

All-in on value baby!

Planning to move that VVIAX back to S&P500 at some point in the distant future. Used to hold some AVUV but decided with my newfound knowledge on matching exposure to roll it all into VSIAX/VBR for simplicity (my 401k has VSIAX), and use that reduction in expense-ratio to bump QVAL up 5%.
Last edited by MotoTrojan on Wed Sep 16, 2020 12:23 pm, edited 1 time in total.
MotoTrojan
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

manlymatt83 wrote: Wed Sep 16, 2020 12:16 pm
YRT70 wrote: Wed Sep 16, 2020 12:11 pm
Steve Reading wrote: Wed Sep 16, 2020 10:59 am I recommend you first take a step back and think about what your beliefs are.
... for some of the factor enthusiasts in this thread to come up with sample portfolios. Iirc Vineviz created one a while back.
I second this. It would be awesome to see some sample portfolios that combine the likes of VTI, VXUS, VFMF, SLYV, AVUV, AVDV, DGS, etc. Paul Merriman does a great job of outlining his portfolios around 100% SLYV/IJS, DLS, and DGS, though I presume he will replace SLYV/IJS with AVUV and DLS with AVDV in upcoming months... though perhaps they're still too new for him.

That being said, I once asked if I could have VFMF as my core US holding, and then tilt via SLYV or AVUV, and was told that I would have conflicting factors. Never really fully understood that.
These sample portfolios are handy, but it really is so so subjective, and even once making one you can find 5 other variants using different allocations to the funds that match the same factor exposure. You just have to read about the methodologies, pick a fund that speaks to you, decide how much allocation you are willing to tilt, and stick to it.
manlymatt83
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Re: Small Cap Value heads Rejoice !!!

Post by manlymatt83 »

MotoTrojan wrote: Wed Sep 16, 2020 12:21 pm
manlymatt83 wrote: Wed Sep 16, 2020 12:17 pm
MotoTrojan wrote: Wed Sep 16, 2020 12:15 pm My allocation likely has deeper factor exposure than 60/40 VFMF/VXUS for what it's worth.
As does mine, as I'm now 50% VTI/VXUS, and 50% AVUV/AVDV/DGS.
25% VVIAX (VTV)
25% VSIAX (VBR)
15% QVAL
25% FNDC
10% IVAL

All-in on value baby!

Planning to move that VVIAX back to S&P500 at some point in the distant future. Used to hold some AVUV but decided with my newfound knowledge on matching exposure to roll it all into VSIAX/VBR for simplicity, and use that reduction in expense-ratio to bump QVAL up 5%.
Wow!

As of now, my portfolio is 50% "Index", and 50% "Play". Right now, small cap value makes up ~90% of play, hence the ~50%... but if I decide to invest in other asset classes (gold, etc.), I would probably end up putting those in play as well.

But something tells me I've been thinking about this the wrong way ... gold, small cap value, etc. should be part of core, and that I really should save "play" for individual stocks, leveraged ETFs (The whole UPRO/TMF thing), bitcoin, etc.

But I hold some BRK.B, and I have that as part of play, so ¯\_(ツ)_/¯ ...
manlymatt83
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Re: Small Cap Value heads Rejoice !!!

Post by manlymatt83 »

MotoTrojan wrote: Wed Sep 16, 2020 12:22 pm These sample portfolios are handy, but it really is so so subjective, and even once making one you can find 5 other variants using different allocations to the funds that match the same factor exposure. You just have to read about the methodologies, pick a fund that speaks to you, decide how much allocation you are willing to tilt, and stick to it.
I was in SLYV, DLS, and DGS for multiple years without touching it. Recently, swapped out SLYV and DLS for AVUV and AVDV. That's the only change I made. Still researching whether that was an OK move or not (so far so good), but I plan on sticking with those 3, and have thought about dumping DGS and just going AVUV/AVDV.
MotoTrojan
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

manlymatt83 wrote: Wed Sep 16, 2020 12:25 pm
MotoTrojan wrote: Wed Sep 16, 2020 12:21 pm
manlymatt83 wrote: Wed Sep 16, 2020 12:17 pm
MotoTrojan wrote: Wed Sep 16, 2020 12:15 pm My allocation likely has deeper factor exposure than 60/40 VFMF/VXUS for what it's worth.
As does mine, as I'm now 50% VTI/VXUS, and 50% AVUV/AVDV/DGS.
25% VVIAX (VTV)
25% VSIAX (VBR)
15% QVAL
25% FNDC
10% IVAL

All-in on value baby!

Planning to move that VVIAX back to S&P500 at some point in the distant future. Used to hold some AVUV but decided with my newfound knowledge on matching exposure to roll it all into VSIAX/VBR for simplicity, and use that reduction in expense-ratio to bump QVAL up 5%.
Wow!

As of now, my portfolio is 50% "Index", and 50% "Play". Right now, small cap value makes up ~90% of play, hence the ~50%... but if I decide to invest in other asset classes (gold, etc.), I would probably end up putting those in play as well.

But something tells me I've been thinking about this the wrong way ... gold, small cap value, etc. should be part of core, and that I really should save "play" for individual stocks, leveraged ETFs (The whole UPRO/TMF thing), bitcoin, etc.

But I hold some BRK.B, and I have that as part of play, so ¯\_(ツ)_/¯ ...
Yeah I started out in the beginning with a more modest 55% VTI, 25% VXUS, and 20% VIOV portfolio/tilt but the more I learn about factor investing (value in particular) the more it speaks to me. I have played around with some play bets before but am trying to focus on the core now. I did put about 28% of my portfolio into a variant of the UPRO/TMF play (I used UPRO/EDV) but exited that to up my factor exposure, after a nice 44% gain :twisted:

I think your 50/50 approach is excellent by the way. Covers all the bases with factor exposure spread nicely around all three regions.
MotoTrojan
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

manlymatt83 wrote: Wed Sep 16, 2020 12:26 pm
MotoTrojan wrote: Wed Sep 16, 2020 12:22 pm These sample portfolios are handy, but it really is so so subjective, and even once making one you can find 5 other variants using different allocations to the funds that match the same factor exposure. You just have to read about the methodologies, pick a fund that speaks to you, decide how much allocation you are willing to tilt, and stick to it.
I was in SLYV, DLS, and DGS for multiple years without touching it. Recently, swapped out SLYV and DLS for AVUV and AVDV. That's the only change I made. Still researching whether that was an OK move or not (so far so good), but I plan on sticking with those 3, and have thought about dumping DGS and just going AVUV/AVDV.
I have no EM exposure at all, but wouldn't mind some if the ex-US funds I use (FNDC & IVAL) had market-weight. I have considered adding some back in via DGS or similar, but don't have any reason to overweight EM, and at market-weight it just doesn't move the needle enough to justify the complexity. Having all of my ex-US in developed small/mid-value is enough diversification for me.
manlymatt83
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Re: Small Cap Value heads Rejoice !!!

Post by manlymatt83 »

MotoTrojan wrote: Wed Sep 16, 2020 12:29 pm I think your 50/50 approach is excellent by the way. Covers all the bases with factor exposure spread nicely around all three regions.
Thanks! Perhaps I will move small cap value back to the "core" part of my spreadsheet. It's one thing I can't ever imagine getting rid of, and I've held it throughout the last few years without issues/adjustments.

UPRO/TMF on the other hand.... :P I could see myself dumping that.
manlymatt83
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Re: Small Cap Value heads Rejoice !!!

Post by manlymatt83 »

MotoTrojan wrote: Wed Sep 16, 2020 12:33 pm I have no EM exposure at all, but wouldn't mind some if the ex-US funds I use (FNDC & IVAL) had market-weight. I have considered adding some back in via DGS or similar, but don't have any reason to overweight EM, and at market-weight it just doesn't move the needle enough to justify the complexity. Having all of my ex-US in developed small/mid-value is enough diversification for me.
You mention you don't want to overweight EM, but wouldn't adding 10% DGS actually be correcting BACK to market weight?
MotoTrojan
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

manlymatt83 wrote: Wed Sep 16, 2020 12:58 pm
MotoTrojan wrote: Wed Sep 16, 2020 12:33 pm I have no EM exposure at all, but wouldn't mind some if the ex-US funds I use (FNDC & IVAL) had market-weight. I have considered adding some back in via DGS or similar, but don't have any reason to overweight EM, and at market-weight it just doesn't move the needle enough to justify the complexity. Having all of my ex-US in developed small/mid-value is enough diversification for me.
You mention you don't want to overweight EM, but wouldn't adding 10% DGS actually be correcting BACK to market weight?
Yes, 10% actually would be a slight overweight for me since I have 35% allocated to ex-US so having ~8.5% would be my ex-US market-weight. I have played around with backtests and given the diversification benefit I get from all my developed ex-US being small/mid-value I just don't see the needle moving enough at 8.5-10% to be worth the complexity of adding another fund to track.

Now you might say, hey MotoT, how do you justify holding 10% in IVAL then? I view the 15% QVAl and 10% IVAL as a joint holding approximating my overall 65/35 US/ex-US allocation w/ the Alpha Architect q-value strategy.
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Steve Reading
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Re: Small Cap Value heads Rejoice !!!

Post by Steve Reading »

MotoTrojan wrote: Wed Sep 16, 2020 11:34 am
Steve Reading wrote: Wed Sep 16, 2020 10:59 am Here, people are divided as well. Posters like Dave, writers like Swedroe, folks at Avantis, etc will have you believe there is a diversification benefit and higher-risk adjusted returns. But even Fama himself has very clearly stated he doesn't believe factor tilts produce higher risk-adjusted return. This is the view of many other academics and writers such as Ghayur Khalid. I also concur with Fama and Khalid here.

I presume later in life you plan to incorporate some bonds, and I know right now you are using your tilts to help gain some extra leverage via higher expected-returns (albeit as you note you believe, with higher expected risk); do you plan to unwind your tilts or maintain them for life and just dilute with bonds? Sounds like you believe you could just start moving to global cap-weight while staying 100% equity, and then start adding bonds; that would be the lowest expense way to go about it at-least, per your belief.
Yes. It sounds crazy, but my ideal retirement portfolio would be just market-cap, broad, cheap, index funds, with no tilts (VTSAX+VXUS for instance).
manlymatt83 wrote: Wed Sep 16, 2020 11:58 am
Steve Reading wrote: Wed Sep 16, 2020 10:59 am Now if you've finally decided factors produce outperformance and higher risk-adjusted returns, then you should tilt as much as your tracking error will withstand. Why wouldn't you, it's a free lunch! So you'd go 100% VFMF in your USA holding perhaps, adding VTI only to the extent you need to stay the course.

That's one way to think about it.
Interesting point. So depending on beliefs, you’d be a proponent of someone having 100% of their portfolio in 60% VFMF, 40% VXUS?
Of course. And they should tilt the Ex-US as well. And if the fees were actually reasonable, then further factor exposure via long-short funds (like AQR). Why wouldn't you? If you believe there's a diversification free-lunch, then tilt until your factor exposure is similar to your beta.
YRT70 wrote: Wed Sep 16, 2020 12:11 pm
Steve Reading wrote: Wed Sep 16, 2020 10:59 am I recommend you first take a step back and think about what your beliefs are.
Yes that makes sense. But I'm fairly agnostic. The way I see it the data is just the data. I do believe that tilting to small and value vs. only holding TSM improves diversification. I also believe it's more likely that small value will outperform TSM over the next decade than the other way around.

But the fact that there are so many ways to calculate factor exposure makes it hard for me to make decisions. I have some education in statistics but it's not good enough to get to the bottom of it. And the fact that there's a lot of disagreement between the smart people about the other factors (momentum and low volatility come to mind) makes it even harder to make decisions.

Perhaps an idea for some of the factor enthusiasts in this thread to come up with sample portfolios. Iirc Vineviz created one a while back.
Ok so you, like Dave and Swedroe, believe in a diversification free lunch. Nothing good or bad, it's just your belief. So you should tilt as much as you can while keeping the tracking error reasonable for you.

At my stage in life, I believe a factor tilt does produce a more efficient allocation. I don't believe it for a retiree but it doesn't matter. So, like you, I tilt as much as I can while staying in my comfort zone. I gave a sample portfolio earlier:
Steve Reading wrote: Sun Sep 06, 2020 10:29 am This is my target portfolio:
20% VTI
29% VFMF
11% VIOV
15% FNDF
10% ISCF
9% FNDE
6% EMGF
viewtopic.php?p=5480107#p5480107

Robert T's stock allocation goes for 0.2 size, 0.4 value. For someone who believes in a diversification free lunch, you'd want to tilt even more to size (because why not? It's diversifying you either way... just increase bonds a little accordingly). Here's two sample portfolios (reduce/increase bonds according to your circumstances):
Robert T wrote: Sat Feb 13, 2016 3:52 pm
  • 23% Vanguard MidCap Value
    ..9% iShares S&P600 Value
    ..5% Bridgeway Small Co. Mkt
    23% iShares EAFE Value
    ..5% iShares EAFE Small
    10% Vanguard EM
    25% iShares 3-7yr Treasury
.
.
.
  • ..8% iShares US Momentum
    11% Vanguard MidCap Value
    19% Schwab Fundamental US Small Company
    17% Powershares RAFI Developed Market Non-US
    11% Powershares RAFI Developed Market Non-US small cap
    10% Powershares RAFI Emerging Markets
    25% iShares 3-7 yr Treasury

    [For US = 20:30:50 Momentum:MCV:SV, for non-US Developed = 60:40 LV:SV]
viewtopic.php?p=2800124#p2800124

Hope that helps.
"... so high a present discounted value of wealth, it is only prudent for him to put more into common stocks compared to his present tangible wealth, borrowing if necessary" - Paul Samuelson
MotoTrojan
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

Steve Reading wrote: Wed Sep 16, 2020 1:14 pm
MotoTrojan wrote: Wed Sep 16, 2020 11:34 am

I presume later in life you plan to incorporate some bonds, and I know right now you are using your tilts to help gain some extra leverage via higher expected-returns (albeit as you note you believe, with higher expected risk); do you plan to unwind your tilts or maintain them for life and just dilute with bonds? Sounds like you believe you could just start moving to global cap-weight while staying 100% equity, and then start adding bonds; that would be the lowest expense way to go about it at-least, per your belief.
Yes. It sounds crazy, but my ideal retirement portfolio would be just market-cap, broad, cheap, index funds, with no tilts (VTSAX+VXUS for instance).
Very interesting. Let's say your net-worth was starting to call for a delevering today, are you committed to replacing factor-funds with broad-indexes even in the midst of a huge value drawdown? Perhaps your delevering is slow enough that you are comfortable blindly following that?
Steve Reading wrote: Wed Sep 16, 2020 1:14 pm


Robert T's stock allocation goes for 0.2 size, 0.4 value. For someone who believes in a diversification free lunch, you'd want to tilt even more to size (because why not? It's diversifying you either way... just increase bonds a little accordingly). Here's two sample portfolios (reduce/increase bonds according to your circumstances):
Robert T wrote: Sat Feb 13, 2016 3:52 pm
  • 23% Vanguard MidCap Value
    ..9% iShares S&P600 Value
    ..5% Bridgeway Small Co. Mkt
    23% iShares EAFE Value
    ..5% iShares EAFE Small
    10% Vanguard EM
    25% iShares 3-7yr Treasury
.
.
.
  • ..8% iShares US Momentum
    11% Vanguard MidCap Value
    19% Schwab Fundamental US Small Company
    17% Powershares RAFI Developed Market Non-US
    11% Powershares RAFI Developed Market Non-US small cap
    10% Powershares RAFI Emerging Markets
    25% iShares 3-7 yr Treasury

    [For US = 20:30:50 Momentum:MCV:SV, for non-US Developed = 60:40 LV:SV]
viewtopic.php?p=2800124#p2800124

Hope that helps.
While these are helpful portfolios for someone getting into the nitty-gritty of factor targets, I think for most people it can be overwhelming and overcomplicated and they'd be better served with something like 50% Total US Market, 25% Total International, 25% US SCV.
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Re: Small Cap Value heads Rejoice !!!

Post by XacTactX »

MotoTrojan wrote: Wed Sep 16, 2020 1:28 pm While these are helpful portfolios for someone getting into the nitty-gritty of factor targets, I think for most people it can be overwhelming and overcomplicated and they'd be better served with something like 50% Total US Market, 25% Total International, 25% US SCV.

[This post has been snipped to save space]
This is very similar to what Rick Ferri recommends as one of the core-4 portfolios, Moto's advice is in good company.

https://core-4.com/total-economy-core-4-portfolio/
SMLF | ISCF | EMGF | LendingClub | Cash
MotoTrojan
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

This thread has been getting too technical... getting back to our regularly scheduled programming, SCV is soaring! AVUV in particular is teasing me and saying "VBR is for wusses!".

Also Jim O just realized a podcast discussing the "historic opportunity" in small-caps:

https://osampodcast.libsyn.com/the-case ... cap-stocks

Based on this post from earlier this year:

https://www.osam.com/Commentary/a-histo ... -small-cap
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Steve Reading
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Re: Small Cap Value heads Rejoice !!!

Post by Steve Reading »

MotoTrojan wrote: Wed Sep 16, 2020 1:28 pm Very interesting. Let's say your net-worth was starting to call for a delevering today, are you committed to replacing factor-funds with broad-indexes even in the midst of a huge value drawdown? Perhaps your delevering is slow enough that you are comfortable blindly following that?
I'd be fine with it, I have little appetite to try to time markets or factors. If I'm supposed to reduce factor exposure, I'll do it.
MotoTrojan wrote: Wed Sep 16, 2020 1:28 pm
While these are helpful portfolios for someone getting into the nitty-gritty of factor targets, I think for most people it can be overwhelming and overcomplicated and they'd be better served with something like 50% Total US Market, 25% Total International, 25% US SCV.
That's too mild for someone who truly believes in a diversification free lunch. One can simplify the portfolios provided to fewer funds with similar factor exposure though. It's just a matter of using multifactor funds and diluting with a total world choice. Ex:

35% VT
40% VFMF
15% INTF
10% EMGF

You can add subtract VT as tracking error requires. The above is just 4 funds (instead of your suggested 3), but it has stronger loadings and, most importantly, they're evenly distributed globally and near market-cap.
"... so high a present discounted value of wealth, it is only prudent for him to put more into common stocks compared to his present tangible wealth, borrowing if necessary" - Paul Samuelson
MotoTrojan
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

Steve Reading wrote: Wed Sep 16, 2020 1:46 pm
MotoTrojan wrote: Wed Sep 16, 2020 1:28 pm Very interesting. Let's say your net-worth was starting to call for a delevering today, are you committed to replacing factor-funds with broad-indexes even in the midst of a huge value drawdown? Perhaps your delevering is slow enough that you are comfortable blindly following that?
I'd be fine with it, I have little appetite to try to time markets or factors. If I'm supposed to reduce factor exposure, I'll do it.
MotoTrojan wrote: Wed Sep 16, 2020 1:28 pm
While these are helpful portfolios for someone getting into the nitty-gritty of factor targets, I think for most people it can be overwhelming and overcomplicated and they'd be better served with something like 50% Total US Market, 25% Total International, 25% US SCV.
That's too mild for someone who truly believes in a diversification free lunch. One can simplify the portfolios provided to fewer funds with similar factor exposure though. It's just a matter of using multifactor funds and diluting with a total world choice. Ex:

35% VT
40% VFMF
15% INTF
10% EMGF

You can add subtract VT as tracking error requires. The above is just 4 funds (instead of your suggested 3), but it has stronger loadings and, most importantly, they're evenly distributed globally and near market-cap.
Totally agree in spirit, but I think if you have to ask what small-value fund to buy, then you frankly don't have the conviction to truly say you believe (and will in the future believe) it is a free-lunch and you can hold that level of tracking error.
caklim00
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Re: Small Cap Value heads Rejoice !!!

Post by caklim00 »

Great day... just need 30 more of these :D

AVUV +1.1%
SPY -0.4%
MTUM -1.18%

on the international side
AVDV +0.30%
VEU -0.17%
kolder
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Re: Small Cap Value heads Rejoice !!!

Post by kolder »

AVUVX been doing quite well since the march 23 bottom:

Image
MotoTrojan
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

kolder wrote: Wed Sep 16, 2020 3:59 pm AVUVX been doing quite well since the march 23 bottom:
It also fell a lot harder. VBR still ahead YTD by my math.
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Re: Small Cap Value heads Rejoice !!!

Post by kolder »

MotoTrojan wrote: Wed Sep 16, 2020 4:04 pm
kolder wrote: Wed Sep 16, 2020 3:59 pm AVUVX been doing quite well since the march 23 bottom:
It also fell a lot harder. VBR still ahead YTD by my math.
Yeah it did, Interestingly AVUVX has done better and AVUV has done worse than VBR for YTD

Image
rascott
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Re: Small Cap Value heads Rejoice !!!

Post by rascott »

caklim00 wrote: Wed Sep 16, 2020 3:13 pm Great day... just need 30 more of these :D

AVUV +1.1%
SPY -0.4%
MTUM -1.18%

on the international side
AVDV +0.30%
VEU -0.17%
By my calc, SLYV/IJS needs to go up about 35%, while VTI goes absolutely nowhere. .... just to get back to where we could have been over a year ago with a boring one fund solution.
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Re: Small Cap Value heads Rejoice !!!

Post by caklim00 »

rascott wrote: Wed Sep 16, 2020 4:22 pm
caklim00 wrote: Wed Sep 16, 2020 3:13 pm Great day... just need 30 more of these :D

AVUV +1.1%
SPY -0.4%
MTUM -1.18%

on the international side
AVDV +0.30%
VEU -0.17%
By my calc, SLYV/IJS needs to go up about 35%, while VTI goes absolutely nowhere. .... just to get back to where we could have been over a year ago with a boring one fund solution.
So then less than 30 of these days lol
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Re: Small Cap Value heads Rejoice !!!

Post by Robert T »

.
Just did a quick check-in on sources of my portfolio return since start of 2003 to yesterday.

+7.1% = "Global market portfolio": 55% world stock:45% bonds
+0.8% = From stock:bond decision*
+0.0% = From within bond decisions**
+0.7% = From within stock decisions***
+8.6% = Total return

* Higher stock allocation than the market: 75:25 stock:bond
** Avoiding credit risk in fixed income (relative to the market). This lowered 2008 downside at no cost to long-term returns so far
*** Slightly higher average market weight to EM over this period (but World Stock has caught up, now a similar market weight), plus small cap and value tilt.

Stay the course. Ignore the noise. There is no doubt that many on bogleheads take no small pleasure in the tracking-error pain of value investors. And will find ways to present the recent gap between value and growth in the widest possible way. The cheap shot is all too tempting. Tune out the noise. Stick to your long-term plan.
.
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Re: Small Cap Value heads Rejoice !!!

Post by rascott »

Robert T wrote: Thu Sep 17, 2020 4:27 am .
Just did a quick check-in on sources of my portfolio return since start of 2003 to yesterday.

+7.1% = "Global market portfolio": 55% world stock:45% bonds
+0.8% = From stock:bond decision*
+0.0% = From within bond decisions**
+0.7% = From within stock decisions***
+8.6% = Total return

* Higher stock allocation than the market: 75:25 stock:bond
** Avoiding credit risk in fixed income (relative to the market). This lowered 2008 downside at no cost to long-term returns so far
*** Slightly higher average market weight to EM over this period (but World Stock has caught up, now a similar market weight), plus small cap and value tilt.

Stay the course. Ignore the noise. There is no doubt that many on bogleheads take no small pleasure in the tracking-error pain of value investors. And will find ways to present the recent gap between value and growth in the widest possible way. The cheap shot is all too tempting. Tune out the noise. Stick to your long-term plan.
.
Thanks Robert.... I'm sure you've shared it before.... but care sharing your actual fund holdings?
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Re: Small Cap Value heads Rejoice !!!

Post by YRT70 »

Steve Reading wrote: Wed Sep 16, 2020 1:14 pm It sounds crazy, but my ideal retirement portfolio would be just market-cap, broad, cheap, index funds, with no tilts (VTSAX+VXUS for instance).
Interesting. Most of what I've read said 'a tilt is for life', which makes sense to me. If you'd want to switch to VTI/VXUS at retirement date and your tilted portfolio has underperformed the broad market during accrual, you'd have to sell low and buy high. For example if you had accrued from 2005 and your retirement date was June 2020. How do you see that?
Steve Reading wrote: Wed Sep 16, 2020 10:59 am Ok so you, like Dave and Swedroe, believe in a diversification free lunch. Nothing good or bad, it's just your belief. So you should tilt as much as you can while keeping the tracking error reasonable for you.
Believing that a portfolio that has exposure to 3 factors is more diversified than a portfolio that only has exposure to the market factor is what you call believing in a diversification free lunch?

I didn't think so myself. After all it comes at the cost of higher volatility (and also slightly higher expense ratios and higher tracking error).
Steve Reading wrote: Wed Sep 16, 2020 10:59 am At my stage in life, I believe a factor tilt does produce a more efficient allocation. I don't believe it for a retiree but it doesn't matter. So, like you, I tilt as much as I can while staying in my comfort zone. I gave a sample portfolio earlier:
Steve Reading wrote: Sun Sep 06, 2020 10:29 am This is my target portfolio:
20% VTI
29% VFMF
11% VIOV
15% FNDF
10% ISCF
9% FNDE
6% EMGF
viewtopic.php?p=5480107#p5480107

Robert T's stock allocation goes for 0.2 size, 0.4 value. For someone who believes in a diversification free lunch, you'd want to tilt even more to size (because why not? It's diversifying you either way... just increase bonds a little accordingly). Here's two sample portfolios (reduce/increase bonds according to your circumstances):
Robert T wrote: Sat Feb 13, 2016 3:52 pm
  • 23% Vanguard MidCap Value
    ..9% iShares S&P600 Value
    ..5% Bridgeway Small Co. Mkt
    23% iShares EAFE Value
    ..5% iShares EAFE Small
    10% Vanguard EM
    25% iShares 3-7yr Treasury
.
.
.
  • ..8% iShares US Momentum
    11% Vanguard MidCap Value
    19% Schwab Fundamental US Small Company
    17% Powershares RAFI Developed Market Non-US
    11% Powershares RAFI Developed Market Non-US small cap
    10% Powershares RAFI Emerging Markets
    25% iShares 3-7 yr Treasury

    [For US = 20:30:50 Momentum:MCV:SV, for non-US Developed = 60:40 LV:SV]
viewtopic.php?p=2800124#p2800124

Hope that helps.
Thanks, yes that was helpful.
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Re: Small Cap Value heads Rejoice !!!

Post by YRT70 »

rascott wrote: Thu Sep 17, 2020 5:26 am Thanks Robert.... I'm sure you've shared it before.... but care sharing your actual fund holdings?
It's in the quote above this post.
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Re: Small Cap Value heads Rejoice !!!

Post by Forester »

MotoTrojan wrote: Wed Sep 16, 2020 1:37 pm This thread has been getting too technical... getting back to our regularly scheduled programming, SCV is soaring! AVUV in particular is teasing me and saying "VBR is for wusses!".

Also Jim O just realized a podcast discussing the "historic opportunity" in small-caps:

https://osampodcast.libsyn.com/the-case ... cap-stocks

Based on this post from earlier this year:

https://www.osam.com/Commentary/a-histo ... -small-cap
O'Shaughnessy is a breath of fresh air versus the value commentary from the academics. Base rates, critical introspection, behavioral reasons for why expensive junk is rewarded when times are good.

What does have me more concerned for value are the views of Mike Green, if there's a dearth of discretionary investors as opposed to valuation-blind passive flow. Is small cap & scv "under-owned" today versus large cap? That would be an obvious manifestation of this; I doubt many young Bogleheads are funneling money into small cap blend funds, they're opting for the likes of VTI.
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Re: Small Cap Value heads Rejoice !!!

Post by rascott »

YRT70 wrote: Thu Sep 17, 2020 6:13 am
rascott wrote: Thu Sep 17, 2020 5:26 am Thanks Robert.... I'm sure you've shared it before.... but care sharing your actual fund holdings?
It's in the quote above this post.
Thanks!
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Re: Small Cap Value heads Rejoice !!!

Post by Robert T »

rascott wrote: Thu Sep 17, 2020 5:26 am Thanks Robert.... I'm sure you've shared it before.... but care sharing your actual fund holdings?
My stock:bond allocation (75:25), US:EAFE:EM allocation (50:37:13), and 0.2/0.4 size/value load targets have been the same for the past 17+ years (since start of 2003). The funds used to achieve these have evolved over time. For example, in 2003 there were no international value index funds, so I used Dodge & Cox International Value until index funds became available for this segment. Holdings are now mostly RAFI funds - as per portfolio shared above (viewtopic.php?p=2800124#p2800124). I prefer the RAFi funds as they tend to have less negative alpha over the long-term so helps to better target a specific size/value load (and mine are not extreme tilt targets), so matches fairly well. There are obviously other good products - this is just the approach I take.
.
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Re: Small Cap Value heads Rejoice !!!

Post by rascott »

Forester wrote: Thu Sep 17, 2020 6:22 am
MotoTrojan wrote: Wed Sep 16, 2020 1:37 pm This thread has been getting too technical... getting back to our regularly scheduled programming, SCV is soaring! AVUV in particular is teasing me and saying "VBR is for wusses!".

Also Jim O just realized a podcast discussing the "historic opportunity" in small-caps:

https://osampodcast.libsyn.com/the-case ... cap-stocks

Based on this post from earlier this year:

https://www.osam.com/Commentary/a-histo ... -small-cap
O'Shaughnessy is a breath of fresh air versus the value commentary from the academics. Base rates, critical introspection, behavioral reasons for why expensive junk is rewarded when times are good.

What does have me more concerned for value are the views of Mike Green, if there's a dearth of discretionary investors as opposed to valuation-blind passive flow. Is small cap & scv "under-owned" today versus large cap? That would be an obvious manifestation of this; I doubt many young Bogleheads are funneling money into small cap blend funds, they're opting for the likes of VTI.

O'Shaughnessy also has motives to entice investors into their SCV funds with 1.79% ERs.
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Re: Small Cap Value heads Rejoice !!!

Post by Steve Reading »

YRT70 wrote: Thu Sep 17, 2020 5:56 am
Steve Reading wrote: Wed Sep 16, 2020 10:59 am Ok so you, like Dave and Swedroe, believe in a diversification free lunch. Nothing good or bad, it's just your belief. So you should tilt as much as you can while keeping the tracking error reasonable for you.
Believing that a portfolio that has exposure to 3 factors is more diversified than a portfolio that only has exposure to the market factor is what you call believing in a diversification free lunch?
Yes, of course.
YRT70 wrote: Thu Sep 17, 2020 5:56 am I didn't think so myself. After all it comes at the cost of higher volatility (and also slightly higher expense ratios and higher tracking error).

Like I said already:
Steve Reading wrote: Wed Sep 16, 2020 10:59 am If you've decided to believe that factors will produce outperformance, the next step is to consider if they'll produce higher risk-adjusted outperformance. You can always decrease your bonds and add more stocks for higher risk and higher return. So for you to tilt, you must believe in a free lunch with the tilt over just more stock.
"... so high a present discounted value of wealth, it is only prudent for him to put more into common stocks compared to his present tangible wealth, borrowing if necessary" - Paul Samuelson
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Re: Small Cap Value heads Rejoice !!!

Post by YRT70 »

Steve Reading wrote: Thu Sep 17, 2020 7:45 am
YRT70 wrote: Thu Sep 17, 2020 5:56 am
Steve Reading wrote: Wed Sep 16, 2020 10:59 am Ok so you, like Dave and Swedroe, believe in a diversification free lunch. Nothing good or bad, it's just your belief. So you should tilt as much as you can while keeping the tracking error reasonable for you.
Believing that a portfolio that has exposure to 3 factors is more diversified than a portfolio that only has exposure to the market factor is what you call believing in a diversification free lunch?
Yes, of course.
YRT70 wrote: Thu Sep 17, 2020 5:56 am I didn't think so myself. After all it comes at the cost of higher volatility (and also slightly higher expense ratios and higher tracking error).

Like I said already:
Steve Reading wrote: Wed Sep 16, 2020 10:59 am If you've decided to believe that factors will produce outperformance, the next step is to consider if they'll produce higher risk-adjusted outperformance. You can always decrease your bonds and add more stocks for higher risk and higher return. So for you to tilt, you must believe in a free lunch with the tilt over just more stock.
Sorry, I'm not following you. I don't necessarily believe that they'll produce higher risk adjusted returns.

I'm in retirement, I like the size of my fixed income just the way it is. I don't want to decrease it for now. (But I will slowly increase my equity allocation over the next years because I like the data on rising equity glide paths.)
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

rascott wrote: Thu Sep 17, 2020 7:13 am


O'Shaughnessy also has motives to entice investors into their SCV funds with 1.79% ERs.
Are they really that high? Wow... well constructed composite value-sorting and profitability screens are not worth anywhere near that.
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

YRT70 wrote: Thu Sep 17, 2020 7:58 am
Steve Reading wrote: Thu Sep 17, 2020 7:45 am
YRT70 wrote: Thu Sep 17, 2020 5:56 am
Steve Reading wrote: Wed Sep 16, 2020 10:59 am Ok so you, like Dave and Swedroe, believe in a diversification free lunch. Nothing good or bad, it's just your belief. So you should tilt as much as you can while keeping the tracking error reasonable for you.
Believing that a portfolio that has exposure to 3 factors is more diversified than a portfolio that only has exposure to the market factor is what you call believing in a diversification free lunch?
Yes, of course.
YRT70 wrote: Thu Sep 17, 2020 5:56 am I didn't think so myself. After all it comes at the cost of higher volatility (and also slightly higher expense ratios and higher tracking error).

Like I said already:
Steve Reading wrote: Wed Sep 16, 2020 10:59 am If you've decided to believe that factors will produce outperformance, the next step is to consider if they'll produce higher risk-adjusted outperformance. You can always decrease your bonds and add more stocks for higher risk and higher return. So for you to tilt, you must believe in a free lunch with the tilt over just more stock.
Sorry, I'm not following you. I don't necessarily believe that they'll produce higher risk adjusted returns.

I'm in retirement, I like the size of my fixed income just the way it is. I don't want to decrease it for now. (But I will slowly increase my equity allocation over the next years because I like the data on rising equity glide paths.)
If you don't believe their inclusion will generate higher risk adjusted returns, then there is no reason to use them when holding bonds (you would be equally well off to simply tilt more towards total market equity funds).
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Re: Small Cap Value heads Rejoice !!!

Post by YRT70 »

MotoTrojan wrote: Thu Sep 17, 2020 8:00 am If you don't believe their inclusion will generate higher risk adjusted returns, then there is no reason to use them when holding bonds (you would be equally well off to simply tilt more towards total market equity funds).
I believe holding the tilt incorporates different kinds of risk. Like not putting all your eggs in one basket.

PS. not sure if this matters but I don't hold bonds. I'm in Europe, government bonds here have negative expected returns. My fixed income is all in deposits yielding only about 0.3 to 1.0%.
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Re: Small Cap Value heads Rejoice !!!

Post by kolder »

Robert T wrote: Thu Sep 17, 2020 4:27 am .
Just did a quick check-in on sources of my portfolio return since start of 2003 to yesterday.

+7.1% = "Global market portfolio": 55% world stock:45% bonds
+0.8% = From stock:bond decision*
+0.0% = From within bond decisions**
+0.7% = From within stock decisions***
+8.6% = Total return

* Higher stock allocation than the market: 75:25 stock:bond
** Avoiding credit risk in fixed income (relative to the market). This lowered 2008 downside at no cost to long-term returns so far
*** Slightly higher average market weight to EM over this period (but World Stock has caught up, now a similar market weight), plus small cap and value tilt.

Stay the course. Ignore the noise. There is no doubt that many on bogleheads take no small pleasure in the tracking-error pain of value investors. And will find ways to present the recent gap between value and growth in the widest possible way. The cheap shot is all too tempting. Tune out the noise. Stick to your long-term plan.
.
Condolences that you didn't get into small/value a few years earlier :oops:

I'm curious about what the general mindset was like back then (~2003). Were people rushing into small/value strategies because of the 2000-2003 outperformance? Were people saying that large growth investing is dead?
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Re: Small Cap Value heads Rejoice !!!

Post by Robert T »

kolder wrote: Thu Sep 17, 2020 8:37 am I'm curious about what the general mindset was like back then (~2003). Were people rushing into small/value strategies because of the 2000-2003 outperformance? Were people saying that large growth investing is dead?
The 18% annualized return of the S&P500 from 1990 to 1999 doesn't fade that fast in peoples mind. SV investing has also been viewed as a bit of an outcast - on the earlier M* diehards site, and here. Same debates, some of the same people. Now perhaps seen as even more of an outcast. Don't expect these debates to change anytime soon.
.
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

kolder wrote: Thu Sep 17, 2020 8:37 am

I'm curious about what the general mindset was like back then (~2003). Were people rushing into small/value strategies because of the 2000-2003 outperformance? Were people saying that large growth investing is dead?
I found this old thread a while back from April of 2007 and people were talking about growth the same way they now talk about value. Very fascinating.

viewtopic.php?t=1542

Here is one reply in particular that was amusing in hindsight:

Wow, what a tale of woe! I feel your pain US Growth Boy.

That is one heck of a loss to take on, but I don't see Growth picking up any momentum in the near future, but I don't know any more that you did 5 years ago. Do you have any increases that you could offset the losses with?

I hope that you get better advice from others on this forum as my advice seems very weak.
It was also fun to see Taylor slamming growth tilters for a change!!!
Taylor Larimore wrote: Sat Apr 07, 2007 9:12 pm Hi Ida:
Vanguard U.S. Growth fund, which is one of the more boneheaded -- OK, the most boneheaded -- investment I've ever made.
Don't blame yourself. No one can forecast mutual fund performance.

At the end of 1998 (shortly before you bought it), US Growth was the "darling" of Vanguard investors. It was Vanguard's highest returning diversified stock fund with a 10-year compound return of 584.1%.

No fund grows to the sky. During the 2000-2002 bear market, U.S. Growth suffered a maximum cumulative loss of (-70.6%). At the end of last year it had the worst 5-year returns of any Vanguard stock fund.

What to do?

If a losing fund is in a taxable account (I think your's is) it is almost always a good idea to sell it for the lax-loss benefit before year-end. If you like the fund--buy it back after 30 days. If you don't want the fund anymore--buy another.

Next time consider an index fund. :)

Best wishes.
Taylor
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

YRT70 wrote: Thu Sep 17, 2020 8:08 am
MotoTrojan wrote: Thu Sep 17, 2020 8:00 am If you don't believe their inclusion will generate higher risk adjusted returns, then there is no reason to use them when holding bonds (you would be equally well off to simply tilt more towards total market equity funds).
I believe holding the tilt incorporates different kinds of risk. Like not putting all your eggs in one basket.

PS. not sure if this matters but I don't hold bonds. I'm in Europe, government bonds here have negative expected returns. My fixed income is all in deposits yielding only about 0.3 to 1.0%.
I just meant holding any fixed-income or cash component which could be moved to equity to increase return.

I agree with you (don't have a strong belief, but enough) that there is a diversification benefit, but if you believe that you are implying you actually do think that tilting will increase expected return as well as risk-adjusted return; if risk-adjusted wasn't improved, then that means there was no extra diversification of risk and you'd be just as well off increasing equity allocation without tilting.
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Re: Small Cap Value heads Rejoice !!!

Post by Taylor Larimore »

kolder wrote:I'm curious about what the general mindset was like back then (~2003). Were people rushing into small/value strategies because of the 2000-2003 outperformance? Were people saying that large growth investing is dead?
Kolder:

In 2003 Larry Swedroe, who represents a large advisory group, published "The Successful Investor Today." He wrote:
"Thus holding a value tilt not only provides greater expected returns on your equity holding, but it also allows you to take more interest-rate risk and thus potentially earn greater returns on your fixed-income investments."
Best wishes
Taylor
Jack Bogle's Words of Wisdom: "Selecting funds that will significantly exceed market returns, a search in which hope springs eternal and in which past performance has proven of virtually no predictive value, is a loser’s game. -- Total market indexing is the gold standard. Anything else, like sector investing, is a dilution of that standard."
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Re: Small Cap Value heads Rejoice !!!

Post by YRT70 »

MotoTrojan wrote: Thu Sep 17, 2020 10:21 am
YRT70 wrote: Thu Sep 17, 2020 8:08 am
MotoTrojan wrote: Thu Sep 17, 2020 8:00 am If you don't believe their inclusion will generate higher risk adjusted returns, then there is no reason to use them when holding bonds (you would be equally well off to simply tilt more towards total market equity funds).
I believe holding the tilt incorporates different kinds of risk. Like not putting all your eggs in one basket.

PS. not sure if this matters but I don't hold bonds. I'm in Europe, government bonds here have negative expected returns. My fixed income is all in deposits yielding only about 0.3 to 1.0%.
I just meant holding any fixed-income or cash component which could be moved to equity to increase return.

I agree with you (don't have a strong belief, but enough) that there is a diversification benefit, but if you believe that you are implying you actually do think that tilting will increase expected return as well as risk-adjusted return; if risk-adjusted wasn't improved, then that means there was no extra diversification of risk and you'd be just as well off increasing equity allocation without tilting.
Ah I see. Thanks for explaining.
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

Taylor Larimore wrote: Thu Sep 17, 2020 10:25 am

In 2003 Larry Swedroe, who represents a large advisory group, published "The Successful Investor Today." He wrote:
"Thus holding a value tilt not only provides greater expected returns on your equity holding, but it also allows you to take more interest-rate risk and thus potentially earn greater returns on your fixed-income investments."
And? Nothing that has occurred since 2003 has disproved anything you quote Larry as saying.
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Re: Small Cap Value heads Rejoice !!!

Post by nzahir »

So from doing some light studying about SCV I have some questions and conclusions:

1. It seems like S&P600>Russell 2000 b/c of the extra screening process, right?
2. VBR/VSIAX have a lot of mid cap, about half, way too much for the purpose of scv.

I have a few questions though.

1. What are the difference between IJS/VIOV/SLYV (very similar results)?
2. Do you guys use one of the cheaper funds because of ER, such as SPSM, or do you focus on trying to use Vanguard/iShares or largest mkt cap
3. I have also been looking into AVUV, but I can not tell if it is worth using over the others. Is their screening process really much better than the S&P600 and is it worth paying a higher fee (.25% is not awful though)?

If anyone can help/give useful info, would be greatly appreciated
Last edited by nzahir on Thu Sep 17, 2020 7:40 pm, edited 2 times in total.
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Re: Small Cap Value heads Rejoice !!!

Post by MotoTrojan »

nzahir wrote: Thu Sep 17, 2020 6:22 pm So from doing some light studying about SCV I have some questions and conclusions:

1. It seems like S&P600>Russell 2000 b/c of the extra screening process, right?
2. VBR/VSIAX have a lot of mid cap, about half, way too much for the purpose of scv.

I have a few questions though.

1. What are the difference between IJS/VIOV/SLYV (very similar results) and VIOO/SPSM (very similar results, SPSM .05% ER)?
2. Do you guys use one of the cheaper funds because of ER, such as SPSM, or do you focus on trying to use Vanguard/iShares or largest mkt cap
3. I have also been looking into AVUV, but I can not tell if it is worth using over the others. Is their screening process really much better than the S&P600 and is it worth paying a higher fee (.25% is not awful though)?

If anyone can help/give useful info, would be greatly appreciated
Russell 2000 is a bit junkier because it doesn't have the earnings screen of the S&P600, yes. I do prefer S&P600 funds over R2K.

VIOO and SPSM are not value funds, they are S&P600 blend funds which is why they are cheaper (but they will have far less value factor exposure, and thus lower expected return); just because returns have been similar for a recent period doesn't mean they are the same. If you want value, you want IJS/VIOV/SLYV which are all near-identical. I would go with VIOV or SLYV personally because of the lower expense ratio.

VBR/VSIAX has a lot of mid-caps which reduces it's SMB (small factor) but it has had pretty similar HML (value factor) exposure to SLYV/VIOV/IJS over it's history, so it is still a perfectly acceptable fund to capture SCV. I used to preach pretty hard about just the point you bring up, but have since opened my eyes to the real impact of it's softer tilt via it's mid-cap exposure (just need to hold a little more of it).

AVUV has some great features that should improve profitability exposure and reduce negative momentum while tilting a bit more than VBR/SLYV/etc... whether it is worth it to you depends on your desired factor exposure. Let's presume it is equivalent to DFSVX which is DFA's longterm SCV fund.

I've tried to make this point a few times to you, but you can get the same exposure with different amounts of these. For example:

If you are okay with 75% VFINX and 25% VBR, you could get the same exposure with these options:

80/20 VFINX/SLYV:

https://www.portfoliovisualizer.com/mat ... tion2_1=75

82/18 VFINX/DFSVX (which is probably similar to VFINX/AVUV):

https://www.portfoliovisualizer.com/mat ... tion2_1=75

Showing you all three of these together, can you really tell the difference? The only one that really stands out to me is the one with DFSVX which underperformed, likely because DFSVX has such a high expense ratio that even at only 18% it drags things down:

https://www.portfoliovisualizer.com/bac ... tion4_3=18

Point is the decision on which fund is less critical than you are making it out to be, the real question is how much do you want to tilt? Once you decide that, using VBR, SLYV, VIOV, or AVUV really won't matter much, you just may want to adjust how much of each you hold to get you that tilt.
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