Small Cap Value heads Rejoice !!!

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Nicolas
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Re: Small Cap Value heads Rejoice !!!

Post by Nicolas »

IMRTguy wrote: Sun Feb 05, 2023 2:55 pm AVUV seems to be very tax efficient despite turning over a large portion of its portfolio it shows no capital gains and dividends are 100% qualified. Is this due to the ETF structure? If so long term ETFs should create a lot of wealth in comparison to a similar mutual funds which would have annual capital gains/ordinary income from turnover.
I don’t think any ETF declares capital gains, that’s one of the advantages tax-wise. The dividends being 100% qualified is likely due to all of the holdings being (profitable) US companies
zie
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Re: Small Cap Value heads Rejoice !!!

Post by zie »

Nicolas wrote: Sun Feb 05, 2023 3:00 pm
IMRTguy wrote: Sun Feb 05, 2023 2:55 pm AVUV seems to be very tax efficient despite turning over a large portion of its portfolio it shows no capital gains and dividends are 100% qualified. Is this due to the ETF structure? If so long term ETFs should create a lot of wealth in comparison to a similar mutual funds which would have annual capital gains/ordinary income from turnover.
I don’t think any ETF declares capital gains, that’s one of the advantages tax-wise. The dividends being 100% qualified is likely due to all of the holdings being (profitable) US companies
ETF's can post capital gains, it's just rare(It has happened in the past).
Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates. -Hetty Green
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Kenster1
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Re: Small Cap Value heads Rejoice !!!

Post by Kenster1 »

IMRTguy wrote: Sun Feb 05, 2023 2:55 pm AVUV seems to be very tax efficient despite turning over a large portion of its portfolio it shows no capital gains and dividends are 100% qualified. Is this due to the ETF structure? If so long term ETFs should create a lot of wealth in comparison to a similar mutual funds which would have annual capital gains/ordinary income from turnover.
AVUV according to M* is showing turnover of 24% - which is close to DFSVX (DFA SCV Mutual Fund) at 23%. I think those are moderate amounts of turnover to be expected for a Smallcap Value fund right?

IJS (iShares S&P600 SCV ETF) is showing 42% turnover.

VBR tends to have a lower turnover because it has a bigger band before kicking stocks out of the underlying CRSP index.
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sycamore
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Re: Small Cap Value heads Rejoice !!!

Post by sycamore »

Taking a break from the SVB threads, I see not much going on here.

My small cap value fund (VBR) was down 7.8% the past week versus down 5.7% for Total Stock. Presumably a greater drop due to exposure to financial stocks?

Anyway, carry on fellow SCV investors.
Nathan Drake
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Re: Small Cap Value heads Rejoice !!!

Post by Nathan Drake »

sycamore wrote: Sun Mar 12, 2023 4:50 pm Taking a break from the SVB threads, I see not much going on here.

My small cap value fund (VBR) was down 7.8% the past week versus down 5.7% for Total Stock. Presumably a greater drop due to exposure to financial stocks?

Anyway, carry on fellow SCV investors.
Yep. "Risk" showed up. SCV is riskier.
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muffins14
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Re: Small Cap Value heads Rejoice !!!

Post by muffins14 »

sycamore wrote: Sun Mar 12, 2023 4:50 pm Taking a break from the SVB threads, I see not much going on here.

My small cap value fund (VBR) was down 7.8% the past week versus down 5.7% for Total Stock. Presumably a greater drop due to exposure to financial stocks?

Anyway, carry on fellow SCV investors.
Happy rebalancing. Long term treasuries were up 4% ;)
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Apathizer
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Re: Small Cap Value heads Rejoice !!!

Post by Apathizer »

sycamore wrote: Sun Mar 12, 2023 4:50 pm Taking a break from the SVB threads, I see not much going on here.

My small cap value fund (VBR) was down 7.8% the past week versus down 5.7% for Total Stock. Presumably a greater drop due to exposure to financial stocks?

Anyway, carry on fellow SCV investors.
It could be, but small caps are generally more volatile than the total market. That's the expected trade-off; hopefully higher overall returns and imperfect correlation, but higher volatility.
ROTH: 50% AVGE, 10% DFAX, 40% BNDW. Taxable: 50% BNDW, 40% AVGE, 10% DFAX.
chem6022
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Re: Small Cap Value heads Rejoice !!!

Post by chem6022 »

VBR at least has had a better run YTD than VTI, so the recent bigger drop doesn't seem so surprising in that light.
gtwhitegold
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Re: Small Cap Value heads Rejoice !!!

Post by gtwhitegold »

muffins14 wrote: Sun Mar 12, 2023 4:56 pm
sycamore wrote: Sun Mar 12, 2023 4:50 pm Taking a break from the SVB threads, I see not much going on here.

My small cap value fund (VBR) was down 7.8% the past week versus down 5.7% for Total Stock. Presumably a greater drop due to exposure to financial stocks?

Anyway, carry on fellow SCV investors.
Happy rebalancing. Long term treasuries were up 4% ;)
I would if I was closer to my rebalancing band, but I still have a ways to go for that. However, I am doing soft rebalancing by directing all incoming funds into the smaller cap funds available in my wife's and my employers' accounts. No real small value funds are available in either right now.
livesoft
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Re: Small Cap Value heads Rejoice !!!

Post by livesoft »

A most classic RBD play just happened. Remember that Fridays cannot be bona fide RBDs, but Monday was a great RBD for AVUV when it dropped an additional -3.85% by the close though it was down even further intraday. And the next day AVUV has traded as high as 75.62 though it has slacked off to 74.11 as I type this.

BND even cooperated by going up 1%+ on Friday and 1%+ on Monday, though it has gone down more than 1% from it Monday high.

In any case, selling BND on Monday to buy AVUV, then selling AVUV on Tuesday has been profitable. Should BND be rebought? I'm gonna wait for now.

Added: these kinds of trades can not be backtested with the current version of PortfolioVisualizer.com because it (a) doesn't have intraday numbers and (b) only has monthly prices anyways.
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steadyosmosis
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Re: Small Cap Value heads Rejoice !!!

Post by steadyosmosis »

livesoft wrote: Tue Mar 14, 2023 12:30 pm A most classic RBD play just happened. Remember that Fridays cannot be bona fide RBDs, but Monday was a great RBD for AVUV when it dropped an additional -3.85% by the close though it was down even further intraday. And the next day AVUV has traded as high as 75.62 though it has slacked off to 74.11 as I type this.

BND even cooperated by going up 1%+ on Friday and 1%+ on Monday, though it has gone down more than 1% from it Monday high.

In any case, selling BND on Monday to buy AVUV, then selling AVUV on Tuesday has been profitable. Should BND be rebought? I'm gonna wait for now.

Added: these kinds of trades can not be backtested with the current version of PortfolioVisualizer.com because it (a) doesn't have intraday numbers and (b) only has monthly prices anyways.
Very nice movements indeed, although I did not participate with AVUV.
Instead moved $$ from BND to (SCHB) equities Friday and yesterday, and did the opposite today.
Good stuff.
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whodidntante
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Re: Small Cap Value heads Rejoice !!!

Post by whodidntante »

zie wrote: Sun Feb 05, 2023 4:36 pm
Nicolas wrote: Sun Feb 05, 2023 3:00 pm
IMRTguy wrote: Sun Feb 05, 2023 2:55 pm AVUV seems to be very tax efficient despite turning over a large portion of its portfolio it shows no capital gains and dividends are 100% qualified. Is this due to the ETF structure? If so long term ETFs should create a lot of wealth in comparison to a similar mutual funds which would have annual capital gains/ordinary income from turnover.
I don’t think any ETF declares capital gains, that’s one of the advantages tax-wise. The dividends being 100% qualified is likely due to all of the holdings being (profitable) US companies
ETF's can post capital gains, it's just rare(It has happened in the past).
Most ETFs have never distributed capital gains.
Folks got spooked by owning State Street ETFs during their drunken party years. I think they finally hired some adults who could pull off a heartbeat trade.
zie
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Re: Small Cap Value heads Rejoice !!!

Post by zie »

whodidntante wrote: Tue Mar 14, 2023 6:00 pm
zie wrote: Sun Feb 05, 2023 4:36 pm
Nicolas wrote: Sun Feb 05, 2023 3:00 pm
IMRTguy wrote: Sun Feb 05, 2023 2:55 pm AVUV seems to be very tax efficient despite turning over a large portion of its portfolio it shows no capital gains and dividends are 100% qualified. Is this due to the ETF structure? If so long term ETFs should create a lot of wealth in comparison to a similar mutual funds which would have annual capital gains/ordinary income from turnover.
I don’t think any ETF declares capital gains, that’s one of the advantages tax-wise. The dividends being 100% qualified is likely due to all of the holdings being (profitable) US companies
ETF's can post capital gains, it's just rare(It has happened in the past).
Most ETFs have never distributed capital gains.
Folks got spooked by owning State Street ETFs during their drunken party years. I think they finally hired some adults who could pull off a heartbeat trade.
Agreed. The iShares Core Allocation funds(AOK -> AOA) also distributed CG once a few years ago. I assume they finally also got their act together, as they haven't done it again since. That's why I said it's rare, but that it has happened in the past, so it's not just theoretically that they can, ETF's actually have. Though like you said, hopefully they have all learned their lesson(s) on how to avoid CG and won't repeat their mistakes.. but who knows :) There are always new exciting lessons to learn out in the world.
Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates. -Hetty Green
muffins14
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Re: Small Cap Value heads Rejoice !!!

Post by muffins14 »

Another day, another “well at least my future contributions are coming in soon” vibe.

Rejoice
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SafeBonds
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Re: Small Cap Value heads Rejoice !!!

Post by SafeBonds »

Unlike the previous recent down days, today international AVDV is down just as much as US AVUV. And Emerging is down too.
livesoft
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Re: Small Cap Value heads Rejoice !!!

Post by livesoft »

Another day, but I don't have the guts yet to rinse-and-repeat, but the day is not over yet. :twisted:
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MaxDOL
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Re: Small Cap Value heads Rejoice !!!

Post by MaxDOL »

zie wrote: Tue Mar 14, 2023 6:08 pm
whodidntante wrote: Tue Mar 14, 2023 6:00 pm
zie wrote: Sun Feb 05, 2023 4:36 pm
Nicolas wrote: Sun Feb 05, 2023 3:00 pm
IMRTguy wrote: Sun Feb 05, 2023 2:55 pm AVUV seems to be very tax efficient despite turning over a large portion of its portfolio it shows no capital gains and dividends are 100% qualified. Is this due to the ETF structure? If so long term ETFs should create a lot of wealth in comparison to a similar mutual funds which would have annual capital gains/ordinary income from turnover.
I don’t think any ETF declares capital gains, that’s one of the advantages tax-wise. The dividends being 100% qualified is likely due to all of the holdings being (profitable) US companies
ETF's can post capital gains, it's just rare(It has happened in the past).
Most ETFs have never distributed capital gains.
Folks got spooked by owning State Street ETFs during their drunken party years. I think they finally hired some adults who could pull off a heartbeat trade.
Agreed. The iShares Core Allocation funds(AOK -> AOA) also distributed CG once a few years ago. I assume they finally also got their act together, as they haven't done it again since. That's why I said it's rare, but that it has happened in the past, so it's not just theoretically that they can, ETF's actually have. Though like you said, hopefully they have all learned their lesson(s) on how to avoid CG and won't repeat their mistakes.. but who knows :) There are always new exciting lessons to learn out in the world.
The iShares allocation ETFs had to distributed capital gain because the index that the ETFs based on change its index's Methodology by remove assets such as Reit's ETF, High Yield bond's ETF, global region's specific ETFs and went all in on global stock/bond based on market cap weight.
zie
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Re: Small Cap Value heads Rejoice !!!

Post by zie »

MaxDOL wrote: Wed Mar 15, 2023 9:58 pm
zie wrote: Tue Mar 14, 2023 6:08 pm
Agreed. The iShares Core Allocation funds(AOK -> AOA) also distributed CG once a few years ago. I assume they finally also got their act together, as they haven't done it again since. That's why I said it's rare, but that it has happened in the past, so it's not just theoretically that they can, ETF's actually have. Though like you said, hopefully they have all learned their lesson(s) on how to avoid CG and won't repeat their mistakes.. but who knows :) There are always new exciting lessons to learn out in the world.
The iShares allocation ETFs had to distributed capital gain because the index that the ETFs based on change its index's Methodology by remove assets such as Reit's ETF, High Yield bond's ETF, global region's specific ETFs and went all in on global stock/bond based on market cap weight.
Interesting, but my understanding is, they could have temporarily increased tracking error rates and moved a little slower to shift the assets without distributing any CG, right?
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Massdriver
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Re: Small Cap Value heads Rejoice !!!

Post by Massdriver »

I scooped up some AVUV and AVES earlier this week. Rejoice!
bmstrong
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Re: Small Cap Value heads Rejoice !!!

Post by bmstrong »

Anyone taking a look at VIOV after the split? I know it's not "cool" but I actually have it available in one of my accounts for an option. Vanguard has fractional shares for it's own ETF's, yes? Might be a interesting place to sweep funds into.
strummer6969
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Re: Small Cap Value heads Rejoice !!!

Post by strummer6969 »

I've always been curious about SCV tilting but it seems like timing is everything for this asset class. Do you guys think now is a good time for a SCV tilt with the small bank failures plastered all over the news, or is there further down to go? I really can't tell how serious of a crisis it is.

Edit: This would be a permanent tilt if I were to do it. So I'm not market timing but just want to make sure I get a reasonably decent entry point.
sycamore
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Re: Small Cap Value heads Rejoice !!!

Post by sycamore »

strummer6969 wrote: Sat Mar 18, 2023 12:01 pm I've always been curious about SCV tilting but it seems like timing is everything for this asset class. Do you guys think now is a good time for a SCV tilt with the small bank failures plastered all over the news, or is there further down to go? I really can't tell how serious of a crisis it is.
If you have to ask, you're not fit to buy SCV.

Just kidding :)

Some people are "committed" to SCV. It's like a relationship :annoyed

Others will time the market -- see livesoft's postings about this.

Personally, I wouldn't make a buying or selling decision based on Boglehead's opinions about this or that. Ultimately you need to decide for yourself, otherwise you'll be changing your portfolio every other week, day, hour...
gtwhitegold
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Re: Small Cap Value heads Rejoice !!!

Post by gtwhitegold »

sycamore wrote: Sat Mar 18, 2023 12:20 pm
strummer6969 wrote: Sat Mar 18, 2023 12:01 pm I've always been curious about SCV tilting but it seems like timing is everything for this asset class. Do you guys think now is a good time for a SCV tilt with the small bank failures plastered all over the news, or is there further down to go? I really can't tell how serious of a crisis it is.
If you have to ask, you're not fit to buy SCV.

Just kidding :)

Some people are "committed" to SCV. It's like a relationship :annoyed

Others will time the market -- see livesoft's postings about this.

Personally, I wouldn't make a buying or selling decision based on Boglehead's opinions about this or that. Ultimately you need to decide for yourself, otherwise you'll be changing your portfolio every other week, day, hour...
I totally agree with this. One shouldn't tilt if they can't stick with it.
livesoft
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Re: Small Cap Value heads Rejoice !!!

Post by livesoft »

strummer6969 wrote: Sat Mar 18, 2023 12:01 pm I've always been curious about SCV tilting but it seems like timing is everything for this asset class. Do you guys think now is a good time for a SCV tilt with the small bank failures plastered all over the news, or is there further down to go? I really can't tell how serious of a crisis it is.

Edit: This would be a permanent tilt if I were to do it. So I'm not market timing but just want to make sure I get a reasonably decent entry point.
I cannot predict whether there is further down to go. I think one can have a base position in SCV, but that one needs to buy more on RBDs and sell those newly bought shares within days or weeks. Rinse and repeat. For example, if this coming week there is an RBD, then I'm buying. If no RBD happens, then I am content with my current holdings.

Another example, I made about 3.5% on newly purchased AVUV shares this past week even though AVUV closed the week lower than my purchase price. That's because I held the shares I bought less than 24 hours. At this point, the volatility in AVUV is a behavioral finance story about human emotions and not a fundamental story about banks.
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er999
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Re: Small Cap Value heads Rejoice !!!

Post by er999 »

livesoft wrote: Sat Mar 18, 2023 2:18 pm
strummer6969 wrote: Sat Mar 18, 2023 12:01 pm I've always been curious about SCV tilting but it seems like timing is everything for this asset class. Do you guys think now is a good time for a SCV tilt with the small bank failures plastered all over the news, or is there further down to go? I really can't tell how serious of a crisis it is.

Edit: This would be a permanent tilt if I were to do it. So I'm not market timing but just want to make sure I get a reasonably decent entry point.
I cannot predict whether there is further down to go. I think one can have a base position in SCV, but that one needs to buy more on RBDs and sell those newly bought shares within days or weeks. Rinse and repeat. For example, if this coming week there is an RBD, then I'm buying. If no RBD happens, then I am content with my current holdings.

Another example, I made about 3.5% on newly purchased AVUV shares this past week even though AVUV closed the week lower than my purchase price. That's because I held the shares I bought less than 24 hours. At this point, the volatility in AVUV is a behavioral finance story about human emotions and not a fundamental story about banks.
Amazing to hear almost day trading advocated for on bogleheads by one of its most prominent posters.
strummer6969
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Re: Small Cap Value heads Rejoice !!!

Post by strummer6969 »

sycamore wrote: Sat Mar 18, 2023 12:20 pm
strummer6969 wrote: Sat Mar 18, 2023 12:01 pm I've always been curious about SCV tilting but it seems like timing is everything for this asset class. Do you guys think now is a good time for a SCV tilt with the small bank failures plastered all over the news, or is there further down to go? I really can't tell how serious of a crisis it is.
If you have to ask, you're not fit to buy SCV.

Just kidding :)

Some people are "committed" to SCV. It's like a relationship :annoyed

Others will time the market -- see livesoft's postings about this.

Personally, I wouldn't make a buying or selling decision based on Boglehead's opinions about this or that. Ultimately you need to decide for yourself, otherwise you'll be changing your portfolio every other week, day, hour...
I'd definitely stick with it. I do not like to touch my allocations more than every few years or so. I need a very good reason to change an allocation.

We'll see what happens this week. If SCV retests the 2022 low and has major movement downward from that, it might be a great buying opportunity.

I would not be changing my overall equities and fixed income/cash allocation (70/30), only the equities part.
livesoft
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Re: Small Cap Value heads Rejoice !!!

Post by livesoft »

er999 wrote: Sat Mar 18, 2023 3:01 pmAmazing to hear almost day trading advocated for on bogleheads by one of its most prominent posters.
I won't tell you what I did with BND then this past week. :twisted:
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Re: Small Cap Value heads Rejoice !!!

Post by drumboy256 »

livesoft wrote: Sat Mar 18, 2023 4:23 pm
er999 wrote: Sat Mar 18, 2023 3:01 pmAmazing to hear almost day trading advocated for on bogleheads by one of its most prominent posters.
I won't tell you what I did with BND then this past week. :twisted:
Uh oh..... sounds like someone bought more equities...... :twisted: :sharebeer
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Re: Small Cap Value heads Rejoice !!!

Post by seajay »

Japanese, British and US SCV/Gold 50/50 blend comparison, all rebased to US dollars

Image

No particular comment, just a observation
BitTooAggressive
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Re: Small Cap Value heads Rejoice !!!

Post by BitTooAggressive »

Ouch.
Pawpatrol
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Re: Small Cap Value heads Rejoice !!!

Post by Pawpatrol »

No rejoicing this year. Avuv ytd -2.9% compared to total market +6.7%. I am not worried but this is some significant divergence that keeps continuing. The spy:avuv chart is parabolic.
Nicolas
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Re: Small Cap Value heads Rejoice !!!

Post by Nicolas »

Pawpatrol wrote: Thu Apr 06, 2023 2:26 pm No rejoicing this year. Avuv ytd -2.9% compared to total market +6.7%. I am not worried but this is some significant divergence that keeps continuing. The spy:avuv chart is parabolic.
Rotation back to growth I think.
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drumboy256
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Re: Small Cap Value heads Rejoice !!!

Post by drumboy256 »

Nicolas wrote: Thu Apr 06, 2023 4:36 pm
Pawpatrol wrote: Thu Apr 06, 2023 2:26 pm No rejoicing this year. Avuv ytd -2.9% compared to total market +6.7%. I am not worried but this is some significant divergence that keeps continuing. The spy:avuv chart is parabolic.
Rotation back to growth I think.
Yeah, noise if anything, the fact that money made is going to move back into value is how this game is played. If you move funds around now, you're doing it wrong. Just keep buying and holding. :sharebeer
Promise is one thing. Fulfilling that promise is quite another. - Sir Alex Ferguson | 20% IVV / 40% IBIT / 20% IXUS / 20% VGLT + chill
Nathan Drake
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Re: Small Cap Value heads Rejoice !!!

Post by Nathan Drake »

Pawpatrol wrote: Thu Apr 06, 2023 2:26 pm No rejoicing this year. Avuv ytd -2.9% compared to total market +6.7%. I am not worried but this is some significant divergence that keeps continuing. The spy:avuv chart is parabolic.
AVDV +5.29%
AVES + 3.42%

Not all bad in the realm of value funds
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
SafeBonds
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Re: Small Cap Value heads Rejoice !!!

Post by SafeBonds »

Nicolas wrote: Thu Apr 06, 2023 4:36 pm
Pawpatrol wrote: Thu Apr 06, 2023 2:26 pm No rejoicing this year. Avuv ytd -2.9% compared to total market +6.7%. I am not worried but this is some significant divergence that keeps continuing. The spy:avuv chart is parabolic.
Rotation back to growth I think.
I think it has to do with AVUV holding small regional banks and those are taking a beating with the recent smaller sized bank failures
Nicolas
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Re: Small Cap Value heads Rejoice !!!

Post by Nicolas »

SafeBonds wrote: Sun Apr 09, 2023 11:52 pm
Nicolas wrote: Thu Apr 06, 2023 4:36 pm
Pawpatrol wrote: Thu Apr 06, 2023 2:26 pm No rejoicing this year. Avuv ytd -2.9% compared to total market +6.7%. I am not worried but this is some significant divergence that keeps continuing. The spy:avuv chart is parabolic.
Rotation back to growth I think.
I think it has to do with AVUV holding small regional banks and those are taking a beating with the recent smaller sized bank failures
Yes I think you’re right.
klaus14
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Re: Small Cap Value heads Rejoice !!!

Post by klaus14 »

Nicolas wrote: Mon Apr 10, 2023 5:23 pm
SafeBonds wrote: Sun Apr 09, 2023 11:52 pm
Nicolas wrote: Thu Apr 06, 2023 4:36 pm
Pawpatrol wrote: Thu Apr 06, 2023 2:26 pm No rejoicing this year. Avuv ytd -2.9% compared to total market +6.7%. I am not worried but this is some significant divergence that keeps continuing. The spy:avuv chart is parabolic.
Rotation back to growth I think.
I think it has to do with AVUV holding small regional banks and those are taking a beating with the recent smaller sized bank failures
Yes I think you’re right.
this was indeed painful. and illustrates why one must only "sin a little" (limit the size of their tilts)
My investment algorithm: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=351899&p=6112869#p6112869
SafeBonds
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Re: Small Cap Value heads Rejoice !!!

Post by SafeBonds »

klaus14 wrote: Wed Apr 12, 2023 4:57 pm
Nicolas wrote: Mon Apr 10, 2023 5:23 pm
SafeBonds wrote: Sun Apr 09, 2023 11:52 pm
Nicolas wrote: Thu Apr 06, 2023 4:36 pm
Pawpatrol wrote: Thu Apr 06, 2023 2:26 pm No rejoicing this year. Avuv ytd -2.9% compared to total market +6.7%. I am not worried but this is some significant divergence that keeps continuing. The spy:avuv chart is parabolic.
Rotation back to growth I think.
I think it has to do with AVUV holding small regional banks and those are taking a beating with the recent smaller sized bank failures
Yes I think you’re right.
this was indeed painful. and illustrates why one must only "sin a little" (limit the size of their tilts)
I believe when Larry says "sin a little" he does not mean to limit the size of your tilts. He means stuff like overweighting international or emerging markets. He would not consider a heavy tilt to be sinning. But it's OK if you are using that phrase differently than how he does.
JSPECO9
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Re: Small Cap Value heads Rejoice !!!

Post by JSPECO9 »

Wondering if someone could help me with a doubt:

Why is active better than indexing when it comes to SCV? I know someone will say it's not "active," but it's not index, no? I'm looking at two funds:

AVUV: 0.25% ER, 0.78% tax cost ratio.
VIOV: 0.15% ETF, 0.52% tax cost ratio.

So VIOV is 0.36% cheaper than AVUV (someone double check me on this).

Anyway: why is AVUV 36 basis points better than VIOV? And whatever the answer is, why doesn't every active SCV fund manager do the same as they do? Is the market not efficient when it comes to SCV? How could we believe there is a secret sauce when it comes to SCV investing, but not in the general stock market?

Thanks in advance for your help.
muffins14
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Re: Small Cap Value heads Rejoice !!!

Post by muffins14 »

JSPECO9 wrote: Tue May 16, 2023 12:17 pm Wondering if someone could help me with a doubt:

Why is active better than indexing when it comes to SCV? I know someone will say it's not "active," but it's not index, no? I'm looking at two funds:

AVUV: 0.25% ER, 0.78% tax cost ratio.
VIOV: 0.15% ETF, 0.52% tax cost ratio.

So VIOV is 0.36% cheaper than AVUV (someone double check me on this).

Anyway: why is AVUV 36 basis points better than VIOV? And whatever the answer is, why doesn't every active SCV fund manager do the same as they do? Is the market not efficient when it comes to SCV? How could we believe there is a secret sauce when it comes to SCV investing, but not in the general stock market?

Thanks in advance for your help.
It’s probably not any secret sauce. It’s just more value.

If the two have different value loads, which they do, they have different expected returns. In this case AVUV has deeper value loading, so the expected retire is higher, offsetting the higher fee in expectation.

For taxes, every one has different tax cost, so others may find different numbers than the ones you listed.

For me, VIOV has a tax cost of 1.08, and AVUV is 0.5. The yield is much higher on VIOV, which is bad for high tax brackets. So for me, AVUV is 0.75 in expense plus tax cost, and VIOV is 1.23, meaning AVUV is already 0.48% better even before considering deeper value exposure

You may want to check the “tax efficiency 2022” thread and spreadsheet with your personal tax bracket info
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Forester
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Re: Small Cap Value heads Rejoice !!!

Post by Forester »

The growth-value spread must be at fresh all-time highs. Checking QQQ (Nasdaq) vs IJS, and Nasdaq is leading small value from both before & after the March '20 bottom.
Amateur Self-Taught Senior Macro Strategist
spessu
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Re: Small Cap Value heads Rejoice !!!

Post by spessu »

Forester wrote: Tue May 30, 2023 12:03 pm The growth-value spread must be at fresh all-time highs. Checking QQQ (Nasdaq) vs IJS, and Nasdaq is leading small value from both before & after the March '20 bottom.
Almost. According to this https://schrts.co/ZIAIuUDE it doesn't look too good. I don't think Stockcharts.com includes dividends though. The reality isn't quite this bad but almost.

It seems like the old case of everything underperforming against mega cap growth. I already thought it was finally the time for value to shine again back in 2022 but now all those gains have been lost.

I should probably listen to Paul Merriman to strengthen my faith :happy
Random Walker
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Re: Small Cap Value heads Rejoice !!!

Post by Random Walker »

spessu wrote: Wed May 31, 2023 6:21 am
Forester wrote: Tue May 30, 2023 12:03 pm The growth-value spread must be at fresh all-time highs. Checking QQQ (Nasdaq) vs IJS, and Nasdaq is leading small value from both before & after the March '20 bottom.
Almost. According to this https://schrts.co/ZIAIuUDE it doesn't look too good. I don't think Stockcharts.com includes dividends though. The reality isn't quite this bad but almost.

It seems like the old case of everything underperforming against mega cap growth. I already thought it was finally the time for value to shine again back in 2022 but now all those gains have been lost.

I should probably listen to Paul Merriman to strengthen my faith :happy
I’ve described before my theory that all the computer, AI, social media, tech advances might serve to amplify human behavioral foibles rather than mute them. Larry Swedroe says 10 years is only noise in financial data. Maybe 15 or 20 years is the new 10 years? Either way, I agree patience and fortitude is worth maintaining.

Dave
muffins14
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Re: Small Cap Value heads Rejoice !!!

Post by muffins14 »

AVUV current up 4.3%

Don’t forget to sell it and buy your EDV today, it’s down 1.1% so you may need to rebalance ;)
Last edited by muffins14 on Fri Jun 02, 2023 12:48 pm, edited 1 time in total.
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donaldfair71
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Re: Small Cap Value heads Rejoice !!!

Post by donaldfair71 »

muffins14 wrote: Fri Jun 02, 2023 12:36 pm AVUV current up 4.2%

Don’t forget to sell it and buy your EDV today ;)
Was waiting for a post here today!

Rejoice indeed, all the SV is up, up, and away.
Weathering
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Re: Small Cap Value heads Rejoice !!!

Post by Weathering »

Redacted
Last edited by Weathering on Sat Jun 03, 2023 10:14 pm, edited 1 time in total.
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nedsaid
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Re: Small Cap Value heads Rejoice !!!

Post by nedsaid »

I just checked Morningstar, the Small Cap Value segment of the US stock market is up 4.5% today! It shows you how volatile Small Value can be.
A fool and his money are good for business.
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Forester
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Re: Small Cap Value heads Rejoice !!!

Post by Forester »

From a Crescat Capital presentation;
https://www.youtube.com/watch?v=JIxu9I2bVu0

Image

It really looks like dip buying and people wanting to party like it's still 2020/21.
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calmaniac
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Re: Small Cap Value heads Rejoice !!!

Post by calmaniac »

rascott wrote: Tue Jun 04, 2019 9:00 am If there is no small/value premium....I'll end up in the same place. If there is, like history has shown, I'll do better over next 30+ years. It's worth it to me to take a few hours/yr to take the shot.
The above is more or less my logic. I would add "....I'll end up in more or less the same place."

For me it's tilt it and forget it....and come back in 30 years. YMMV.
"Pretired", working 20 h/wk. AA 75/25: 30% TSM, 19% value (VFVA/AVUV), 18% Int'l LC, 8% emerging, 25% GFund/VBTLX. Military pension ≈60% of expenses. Pension+SS@age 70 ≈100% of expenses.
slicendice
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Re: Small Cap Value heads Rejoice !!!

Post by slicendice »

AVUV +4.63% for the day! Last pay period was all AVUV, this pay period is all LTPZ (-1.25%).

The day to day volatilty doesn't matter long term, but it sure is entertaining :happy
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