Glad to hear you are starting to narrow things down! Few more answers to hopefully get you to the finish line.
nzahir wrote: ↑Thu Sep 17, 2020 8:19 pm
I think I prefer SLYV over VIOV because its market cap is about 4x the size and ER is the same
IJS mkt cap is over 2x of SLYV, but a higher ER and I think a 2B mkt cap is fine, but not sure if anyone wants to clatify
SLYV is a perfectly fine choice but just some background here. Fund AUM (assets under management, like market cap) can sometimes matter, but trading volume is probably more important for liquidity (I am sure SLYV has more than VIOV though). Having said that, liquidity is really based off the underlying assets; if they are liquid, then an ETF can still maintain a small bid-ask spread. If SLYV was more efficient (better priced) than VIOV, then market arbitragers could simply buy one, redeem it for the underlying, create the other, and profit off it, but in doing that they drive the pricing of the two together.
SLYV and other State Street funds were very poor choices in taxable accounts up until recent as they had capital-gains distributions, but have since reported that they have that fixed so should be a fine choice now.
nzahir wrote: ↑Thu Sep 17, 2020 8:19 pm
1. Why are there no S&P600 index funds that are available to easily buy instead of having to buy shares? I see there is VSMVX I believe, but not available to me?
See below, but if you are a mutual fund user rather than ETFs, I strongly advise you to just go with VSIAX for simplicity; you are not giving anything up factor wise if you adjust allocation accordingly.
nzahir wrote: ↑Thu Sep 17, 2020 8:19 pm
2. Why use VBR if it has so much mid cap? Not a bad fund at all though and for some periods of time it has done just as well as SCV if not better, but not when you go back to a longer 50 year period.
Again, the only thing that really matters with these diverse funds is factor exposure. VBR does a perfectly fine job at getting exposure to HML relative to say SLYV, and still gets most of the SMB exposure. By holding a little more VBR you can get the same exposure while reducing your overall weighted expense ratio, so unless you need a deeper fund to meet your target exposure, no need for anything more. Take a long look at the final Portfolio Visualizer post I made in the previous reply, you really cannot tell the difference between the VFINX/SLYV and VFINX/VBR portfolios.
In my view, HML matters more than SMB. I believe people associate small-value as the winner because smaller companies better achieve HML exposure, but with a deep value fund like VFVA which is 1/3 large, 1/3 mid, and 1/3 small I’d wager you actually have even higher expected returns (and risk) than SLYV. So the small is more a tool to easily access the value exposure than anything (it on its own has less excess return).
nzahir wrote: ↑Thu Sep 17, 2020 8:19 pm
3. Any way to read on what Avuv does in a clear and simple manner? Do they just screen for profitability similar to the S&P600 and then try to avoid negative momentum? I don't know much about negative momentum though. Don't you want to not sell low or do they somehow aboid that negative momentum before it happens?
Here is a great read-up on the Avantis process. Avoiding negative momentum has nothing to do with selling low, it has to do with letting winners run a little longer, and waiting to add new stocks that are falling into the value-screen with the assumption that their momentum will have them keep falling a bit more. If you run a factor analysis on VBR or SLYV you'll see that they don't have that much negative momentum to begin with, it is a bigger problem with more aggressive funds like VFVA or QVAL.
https://www.avantisinvestors.com/conten ... esting.pdf
The S&P600 "screen" is only for inclusion to the S&P indexes (4 quarters of profitability) so it is a very light effect but has helped relative to the Russell 2000. A company that gets in though won't be kicked out for having profitability deteriorate, while Avantis is constantly screening (and weighting) for this. Macy's for example is a high-profile company that has had some bad luck lately and fallen into the S&P600, even though they are quite distressed I would presume.
Most important thing is to pick something that speaks to you and that you have conviction in. While AVUV may not end up being the most efficient choice due to the higher expense ratio, it also won't have a drastic tracking-error relative to an equivalent allocation to VBR.