AVEM
Avantis® Emerging Markets Equity ETF
Mentions (24Hr)
-100.00% Today
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FT: "Emerging markets hit by worst sell-off in decades" -- Time to Diversify Internationally?
FT: "Emerging markets hit by worst sell-off in decades" -- Time to Diversify?
Mentions
AVDE has meaningfully outperformed the most commonly mentioned international ETFs in this subreddit. I also include AVDV for international small cap value, which demonstrated a remarkably strong performance last year, as well as AVEM for emerging markets. All of these are off to strong starts in 2026. Of note, they do have higher expense ratios than other ETFs but that should be taken into account with performance differences as well.
AVDE, AVDV, and AVEM as tilts on top of my VXUS.
Nice. i'm essentially 55/15/15/10 VTI/AVUV/AVDE/AVEM
I don’t know how you could possible come away with that impression unless you asked Siri for a summary. AAPL is up 16% since I sold. My portfolio is up 35% over that same time frame because I rotated into better opportunities—even higher if you look at the specific equities I bought because of the AAPL sale (GOOG, NVDA, DFIV, AVDV, AVEM).
The most important principle in investing (in my opinion) is diversification. You want to buy a globally diversified portfolio of stocks, and the ETF that achieves this is VT (Vanguard Total World Stock Market Index Fund). If you invest $100 into VT, your money effectively goes to all the publicly traded companies in the world according to their market capitalization. Nvidia Corporation is 4.26% of the world's stock market capitalization, so $4.26 of your money would be invested in Nvidia Corporation. Similarly, Rolls-Royce Holdings is 0.13% of the world's stock market capitalization so $0.13 would be invested in Rolls-Royce Holdings. You get the idea. The point is that you are not betting on any individual country, sector etc. by investing in VT. The safe option to start off with is to buy VT, and keep investing whenever you can. Now, there are ways of "beating the market". Financial science suggests that there is no publicly known way to do so without taking on more risk (if there was a less risky way to do so that was publicly known, wouldn't everyone do it and then it wouldn't work anymore?). For example, factor exposure (which was introduced by Eugene Fama and Kenneth French in their Nobel Prize winning paper) suggests that, for example, small cap value stocks are expected to outperform the market over long time horizons because they are inherently riskier. The historical data suggests this is the case. You could tilt toward small cap value with ETFs such as AVUV (Avantis US Small Cap Value) and AVDV (Avantis International Small Cap Value). Emerging Markets is another sector of the market that is inherently riskier and has historically delivered higher long-term returns than the US Stock Market, for example. You could tilt a bit to Emerging Markets with AVEM (Avantis Emerging Markets), and especially AVES (Avantis Emerging Markets Value) and AVEE (Avantis Emerging Markets Small Cap). Avantis' methodology is based on the Fama-French model and their research and this has also historically outperformed the market over long time horizons. My suggestion is to buy VT, and if you want some tilts you could buy some AVUV, AVDV, AVEM, AVES, AVEE (of the latter three, AVEM is the best if you want to go with one). I would keep at least 75% of your investment in VT (maybe more) and tilt according to your preference after you have done some research and asked lots of questions. The other method to outperform the market is buying individual shares. Unfortunately, this is really risky and mostly does not pay off unless you are willing to do a lot of research and buy and hold for long periods of time. I couldn't tell you what individual shares will take off in the next 10 years with any sort of guarantee. On the other hand, there is a third method to beat the market, by buying leveraged ETFs. It turns out that leveraged ETFs, provided the leverage isn't too high, do outperform the market over long time horizons, but I wouldn't recommend getting into them until you have accumulated more knowledge and started with the core base of VT. I wish you the best in your investment journey! You absolutely can't go wrong, over long time horizons, with VT. Remember that investments in stocks (including VT) is for the long haul, these do not function as savings accounts, because they can be volatile in the short term and have drawdowns lasting several years. You should look at the historical performance over decades, however, to see that if you stick with them, and provided capitalism continues to thrive on Earth (which in my mind is a safe bet, unless something really disastrous happens), then VT will give you strong growth over a long time horizon. I would estimate it will beat inflation by around 5% on average per year based on historical performance, and that compounding effect can really snowball over several decades. A cool stat is that $5 a day invested for 45 years at 10% annual return, would be around 1.4 million dollars, where 80k of that is your own money, and nearly 1.4 million of that is interest earned from investments. If you contribute more early, then of course, you can see faster results. I wish you all the best in your investment journey! 😊
Hey man, I saw you a lot around here and your advice is pretty easy for a beginner like me to understand. Mind if I ask you a question? Right now, I’m in a similar position. I only hold SPYM but want to add more international diversification. If I plan to hold long term, what do you think of IDMO + AVDV. I feel like this cover both ends of developing markets. But I’m also willing to switch out IDMO for AVDE, IDEV or FENI. I also plan to add some forms of EM like AVEM, AVES or FRDM. Personally, what do you think about these funds? I plan to do 20% for DM and 10% for EM.
Note: AVEEX has a 5M min investment, but AVEM is a close equivalent Also, DEMGX tilts towards small caps so AVES is the better comparison In short: 1. if you want SMB & HML, go DEMGX 2. if you just want HML, go AVES 3. if you want the most minor tilt, go AVEM
Why is AVEM down 20%?
Depends on your tax bracket. The bracket that benefits most from optimization is the 35% ordinary/15% qualified or the 37% ordinary/20% qualified bracket. For this group, I recommend splitting tax-efficient developed from the tax-inefficient emerging: - DFIV in taxable for large cap value, this is actually better than US equities since it is nearly 100% qualified plus gives you foreign tax credits - DISV or AVDV in taxable for small cap value. DISV is more tax efficient but AVDV has performed very slightly better - AVDE is reasonable too, but less tax efficient - Your choice of emerging market fund. AVEM, DFAE, DFEM are pretty good with better liquidity than heavier tilted options, but you probably want them in tax advantaged if you have some room there. The DFA funds are more tax efficient but haven’t performed as well. If you’re in a lower tax bracket (for instance 20-22% ordinary/15% qualified), then it’s actually better to get them all in taxable. This is because the advantages of the foreign tax credit outweigh the disadvantages of lower QDI.
I meant for the us portion. If you had 80% US then 50/25/25 of that. However, I think you need at least 25-40% international to make it worth it… unless your international is AVDV and/or AVEM but that’s if international isn’t about broad diversification but seeking value and potential growth exposure, since emerging markets has more growth potential than developed and small cap value is more undervalued than us small cap.
Huawei is privately owned. There's a higher risk premium to be expected for investing in emerging markets, and particularly for the Chinese market to US and Western investors given geopolitical tensions. But at some point the valuation becomes enticing. Note that approximately 50% of the responses in any thread related to China suggest they would not invest in China at all, suggesting that they are ideologically opposed to it (i.e. there is no valuation cheap enough to make it worth their while). Personally, I don't own Chinese stocks or ADRs, nor do I own Chinese-specific ETFs (paying 50-75 bps is ridiculous, why pay a much higher expense ratio for single country risk when you could diversify while get it much cheaper?). But I'm more than happy to get that exposure by paying 7 bps for passively managed emerging market ETFs like VWO or 33-36 bps for factor-tilted AVEM or AVES (where value premia have outperformed and which return some of the expense ratio in the form of higher foreign tax credits anyway). Likewise their counterparts in developed countries.
If you want to be more aggressive with international, you can look into IDMO (developed momentum) + AVEM (emerging markets) or AVDE/AVNM (value + profitability tilts).
32. I've been at my current job for 2 years, opened Roth and brokerage this year. Plan on retiring when I'm 67. Focusing on emergency fund (20k) and down payment for house (40k) over the next 3-5 years (minor investments into Roth and brokerage to keep them warm), 401k at 8%. 401K (High priority) SP 500 50% World Equity Index EXUS 25% SP 600 Smallcap 15% Midcap Index 10% Roth IRA AVUV 40% AVDV 25% AVEM 25% QQQM 10% Brokerage (low priority) VTI 75% VXUS 20% BRKB 5%
Let me give you some options of systematic value investing ETFs, each group with its own methodology (it should be easy finding thorough descriptions of their methodology online in their websites, in podcasts, etc.): 1. Avantis is a rules-based manager that focuses on stocks with small cap, low valuations and high profitability. They have ETFs that are meant to be a substitution for total market funds, but instead of market cap weighting, they tilt towards small cap and value (AVUS, AVDE, AVEM for US, Developed ex US and Emerging Markets). They also have ETFs that focus specifically on value stocks. AVGV for all markets, AVUV for US small cap value, AVDV for Developed ex US small cap value, etc. 2. Cambria has also a sweep of ETFs that focuses on companies with high shareholder yield (dividend, plus buybacks plus paying down debt). SYLD and others. 3. Alpha Architect has two ETFs (QVAL and IVAL) that also focus on value stocks. These ETFs are more concentrated.
I am 22 years old and currently in medical school so I’m not making any money yet, but my dad started me on my investment journey by making me invest $500 in SPY every month since last year, but since downloading Reddit a couple weeks ago and doing research here I realized how I wanted to be more diversified (also switched to VOO instead of SPY). Specifically, I liked the literature on the value of SCV so I added AVUV to cover that for the US as SPY is all large cap and some mid cap. And now I’m also thinking of adding VEA and AVEM for international developed and emerging markets exposure, respectively. I like Avantis’ methodology and active screening and read that that could help with EM markets. So, I’m thinking of a 4 fund portfolio with VOO/AVUV/VEA/AVEM in maybe something like a 60/15/15/10 split that I’ll be investing in for 30+ years and putting $100k in per year once I become a doctor. Would this be a good portfolio distribution? And since I won’t qualify for a Roth IRA should I also create a backdoor Roth once I start working?
First off you are way ahead of the game. Congradulations! The problem you have are great. Your number one asset is your future wages. Putting yourself into poverty can be destracting and destructive to your most important asset. You clearly want to save and invest, but don't lose sight of what is most important to focus on getting great returns on $28k. You want to maintain liquidity for college. If ultimately it all goes to housing and board that's not a bad use of the funds. While early savings is great, having lots of excess income to save faster is better. Now in terms of retirement savings you can put $7k / yr into a Roth. You just missed the date for 2023 but 2024 is still open. If you don't know anything just throw it all into AVGE. That's a reasonable total portfolio. Keep doing that till you get to $100k and perhaps beyond. Now that probably isn't fast enough. A good way to accomplish both liquidity and growth is a taxable high draw portfolio. A taxable setup like: 15% AVUV, 15% AVEM, 70% VCSH will get you long term growth about 1.5% below 80/20 with liquidity not much worse than short term bonds. You can draw fast if you need to, but can leave it in there for years without hurting yourself too badly. BTW what you are doing isn't "passive income". Passive income is income (not capital gains) from investing. You are just having a subsidized standard of living.
Overall, solid. I would personally probably use AVEM to get more exposure to emerging markets rather than AVDV, but I think what you have is fine. Start it up, stick to it, and go from there.
If I were you id go 60% AVUS, 30% AVDE, 10% AVEM. Or if you want 1 fund go AVGE.
A popular broad one is Vanguard's VWO, but for the record I'm not trying to predict any "comebacks." Some like to exclude China, for which there's EMXC. Another interesting one is XSOE which aims to exclude "state owned enterprises." Some interesting research from WisdomTree on that topic. And then of course there are factor-focused funds like Avantis's AVEM which screens for earnings and tilts Value.
70 USA. SCHB, SCHD, SCHG, AVUV. 30. Int. IDHQ, SCHY, AVEM
The following is about AVEM vs AVES. From the [Rational Reminder episode with Eduard Repetto](https://rationalreminder.ca/podcast/228): >**Why have we not seen an emerging market small cap value strategy?** > >That's a good question. I think that we have one, but that's in the eye of the beholder. If you think we have a market-wide strategy, the emerging market equity, then we have an emerging market value strategy. That strategy is mega-cap companies. If you think about mega caps, mega cap’s value has lower premium than mid-caps and small cap value. What we say is, instead of just focus – the emerging markets is smaller market, it's less liquid market than. I’ll say, instead of just focusing only on the small cap, let’s focus on small and mid-caps. Let's try to – let's exclude mega cap basically. Let's try to create a strategy that has strong premiums that you see in mid and small caps, but also have the liquidity and the diversification benefits. We settle not for a small, we settle for a portfolio that excludes mega caps. So basically, it's kind of mid and small caps.
AVEM. Down about 26% from its highs in 2021, no sign of it recovering any time soon. Originally bought it hoping it would appreciate a bit while I saved money for a down payment. At the time I had only researched long-term investing strategies, so I invested the down payment money using the same allocation I had for my IRA. Learned a valuable lesson about the perils of using a long-term investing strategy for a short-term goal. Still kind of in denial about whether and when to dump it tho. Regardless, it's all 5-D chess on my part in the end since the current housing market relative to the combined income of my partner and myself has converted home ownership from a short-term goal into a long-term one.
Sort of. I have one on EM Value and then one that's basically AVES vs. AVEM vs. DGS.
I like the Avantis funds. Indexing with screens for quslity. I hold AVEM.
I think your AVEM and AVES labels are incorrect. AVEM is just Avantis' generic emerging market ETF, and AVES is emerging market *value*. There is no small cap value for emerging markets.
> personally I would stick 5% AVRE into the AVUV allocation. That seems to be fairly reasonable. > Just a point of clarification - AVUS, AVDE, and AVEM are blended funds with a modest value tilt, but not explicitly value funds (like VTV for example). Yup this is true. The value tilt is modest and sector weights are capped so you get less FANG exposure.
Probably not going to make much of a difference but personally I would stick 5% AVRE into the AVUV allocation. Just a point of clarification - AVUS, AVDE, and AVEM are blended funds with a modest value tilt, but not explicitly value funds (like VTV for example).
Thoughts on my factor tilt? USA based TL;DR at the end Hi there, 24 and only started investing recently since I started working last year. I have a strong stomach for risk and don't even check my portfolio performance for months on end, so I can handle quite a bit of volatility, especially since I'm rather frugal. One issue I have with my 401K and HSA is that they're very limited. The only funds I liked were an S&P 500 tracking index fund in my 401K, and an international Large Cap Blend index fund that seems very similar to VEA. Same thing in my HSA except they were ETFs. I'd love to VT and chill on both of those, but that's not an option I have. I'm contributing 50/50 domestic and international to each, maxing my HSA, and maxing my 401K match currently, so I just want to find an appropriate way to take on some risk and gain exposure to other markets in my IRA. Currently thinking 42% AVUV because I'm a THGTTG fan 28% AVDV for international SCV exposure 20% AVES for an Emerging Markets Value tilt 10% AVEM for general EM exposure My main concern is that a good 30% would go into the volatile mess that is EM, but 30% of $6k a year is only $1800 anyway. Thanks in advance! TL;DR: 50/50 domestic and international LCB in 401K and HSA, wondering if my IRA factor ETF ratios are appropriate or stupid.
I'm going to copy/paste another comment justifying international diversification and small cap value tilts. This supplements my endorsement of market timing: not only is this historically a good idea, the metrics look especially favorable. I'm copy pasting my comment from somewhere else. I also discuss small cap value, so just ignore that part. > Here is all the data justifying international diversification and a small cap value tilt. > During **2000-2010**, while SPY (and thus VTI) were basically flat or declining, **international stocks appreciated at roughly 5% per year**. **Emerging market stocks grew 9.8%** on average in this period (25% of VXUS is emerging markets). VXUS is a [great hedge](https://i.imgur.com/gWxTfEl.png) in general when US stocks underperform. > > That's just one decade, though. [Here is data from **1950** through **2015**](https://i.imgur.com/ldZ5hNO.png), showing that a **70/30 US/ex-US portfolio would see 10.9% annually, vs 11.2% in 100% S&P 500**, with a **1% reduction** in **standard deviation**. Hopefully that isn't cherry picking! You basically get near identical returns with a sizeable reduction in volatility and less severe bear markets. > [Here is the longer time horizon visualized](https://i.imgur.com/M3hJzQc.png), showing periods of outperformance of either market. You'll notice US outperformance has been the most recent trend and has lasted quite a long time. I'm not recommending market timing, but mean reversion would imply a reversal in who is outperforming. A similar 'market timing' case can be made for investing in value over growth, for example. > > The only complexity you could consider is a little AVUV + AVDV for a small cap value tilt both US and internationally. (Maybe 5% in each) Small cap value is well-known for its outperformance historically. After Japan's bubble burst, from **1990 to 2019, Japanese total country returns averaged 0.6%**. **Japanese small cap value averaged 5.13%** and **Japanese value stocks averaged 4%**. And returning to 2000-2010, **US small cap value grew 7.94%** on average and **US value stocks grew 4.56%** on average, in contrast to a declining/flat S&P 500. The outperformance is [robust across many decades](https://i.imgur.com/W0sAt4K.png), though. [Another graph](https://i.imgur.com/0OaFiH1.png), and [another](https://i.imgur.com/HBkJ6aA.png). That final one spans **1926-2019** in I believe the US and reports an annualized return of **14.5% for small cap value**, **10.1%** for the **market** as a whole, **10.2% for large cap**, and **9.8% for large cap growth**. Obviously, the risk is higher with more volatility. > As you can see, when the US or Japan saw their overall market stagnate, small cap value and international holdings held up the portfolio. Moreover, small cap value had higher returns over many decades by a substantial amount. The inclusion of VXUS for international exposure had minimal impact on long term returns while reducing volatility. Thus, I stand by my recommendation of following a total global stock market ETF (VT) and if desired, a small cap value tilt. > > There is a nice video from Ben Felix on the S&P 500 if it helps convince you to diversify. Just to be sure, you will do well in the S&P 500, so this comment is more about refining it from there. ------------------------ > To add, one of the benefits of international developed small cap value (AVDV) as well as emerging market companies (e.g., AVEM or AVES or VWO) is that they behave like a much more different equity class than the more well-known, larger cap ex-US stocks. > > Multinational corporations like Novartis, Nestle, or ASML based in ex-US developed stock markets are very similar in nature to the companies in the S&P 500, which are also very multinational in their sources of revenue and headquarter locations. [This is less true for say companies based in Japan, where the corporate culture is very different and there is a history of massive, inefficient conglomerates.] The result is that the diversification benefit of large cap ex-US companies in developed countries is not as noticeable. > > This is less true for smaller cap companies in Europe/Japan, and emerging market companies in India/China/Taiwan. Not only do you get the outperformance but they will be less correlated with the S&P 500. They will underperform at different parts of bear markets. In fact, some small cap value companies tend to thrive in difficult market conditions. > > So in summary, you get a lot more diversification bang for your buck by adding in international exposure via international small cap value and emerging markets than just adding the overall international market (VXUS). Though VXUS alone still is a useful diversifier, since international markets tend to have much larger exposures to certain industrial/commodity markets and less so to tech than in the US. > > However, I currently do not tilt emerging market funds beyond market cap weights in VXUS (25% of it), because it adds a lot of volatility that I believe I am not suited for. I am not sure I can have the patience of waiting so long to see outperformance, and the negative skewness (risk of total financial collapse via war, political instability, natural disaster) of some emerging market economies is high.
FRDM is very legitimate. The founder is Perth Tolle and the fund is whitelisted via Alpha Architect's 'ETF Architect'. Alpha Architect and ETF Architect are run by veterans. So you have a fund run by veterans that believe in the values of the fund as well. And Perth Tolle is incredibly passionate about this fund. Recently interviewed on Bloomberg's July 1st episode https://www.bloomberg.com/podcasts/series/master-in-business She was also featured on Morningstar and many other media outlets. https://www.morningstar.com/articles/1082597/the-world-is-waking-up-to-autocracy-risk-thanks-to-russia-china [here's a backtest ](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=-1&benchmarkSymbol=IEMG&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=FRDM&allocation1_1=100&symbol2=XCEM&allocation2_2=100&symbol3=AVEM&allocation3_3=100) showing how in recent times when other funds, more exposed to country risks, drewdown -FRDM was able to outperform them, one of very few Emerging Markets funds maintaining positive nominal returns through the recent couple of years. Note: for the factor regressors out there, note that the difference in country allocation alone makes any regression full of noise. That's before considering the short time period available for a regression.
Thanks for the reply. Just to clarify my current allocation as far as ex US, I'm 10% VEA 10% VWO and was considering a 5-10% allocation to DGS (Wisdom Tree EM Small Cap Div ETF). So altogether it would be something like: VOO 25% Core/Lg Growth AVUV 20% US Sml Cap Value VEA 10% Developed ex-US VWO DGS 20% EM w Small Cap Val tilt TLT/SHY 10% Long/Mid Treasuries = ~85% Allocated / 15% Cash currently In your suggestion do you mean adding AVDE & AVEM to my current Int'l allocation? I'm not sure I understand "adding the global mkt cap weighting" wording though. Do you mean trying to emulate those two ETFs or actually adding them? I feel a bit over allocated Int'l wise. (?) Re:TLT Also still trying to understand why one (anyone) who holds TLT at this point like myself, would continue to hold if it's a pretty sure thing that at least 100bps hikes coming by July which would send TLT down to double digits I would think. Ofc, I've held this long, (from 140 to 109) so I've already paper absorbed the downside so idk, maybe should be adding to it. But I try not to add to a losing position. Apologies, still got a lot to learn and digest. Thx Cheers PS. Goes w/o saying that this is all just discussion and informational and ofc I DMOR and NFA :)
I suggest adding the global market cap weighting of AVDE & AVEM for non US diversification. Or the Dimensional core 2 ETFs tilt even more to small and value I believe. For fixed income there are some good ETFs that target term premiums and credit premiums in a systematic way.
On that note, what are your favorite international and especially EM plays - both stocks and etfs? As an international play I like Volkswagen a lot, although the price is a bit too high right now imo. As for EM, which are not my forte, I do like BABA and TSM, although both are certainly held back by worries over the actions of the chinese government. Don't know sh\*t about Indian or Korean companies. Also used to own VALE at one point, but I've sold out since. Seeing how it's mentioned on it's own, any value plays in particular you're looking at? ​ AVES, AVEM and AVDV were mentioned. AVES seems to have a rather high expense ratio of 0.36%, though.
I only got ETFs: AVES and AVEM for emerging market value and blend, respectively, and AVDV for ex-US developed small cap value.
Definitely not enough data to really be able to tell. That said, I maintain my VTI/VXUS exposure, but tilt SCV and actively invest 50% of my international portfolio. I did this in a 401k with DFA but no longer are with that company so use Avantis in my other taxadvantaged accounts. For INTL, i do 50% VXUS, 40% Developed Intl Mutual Fund, 10% AVEM. For SCV I use AVUV. in 2017 when I began SCV investing I contemplated small cap value index from vanguard (VSIAX) or DFA's (DFSVX) in my 401k as I had access to both and decided on the DFA. its outperformed but its been basically negligible. (less than 1% a year)
DFA is not straight profitability unless you are talking about the three funds out of many that specifically target that factor. DFAC and DFAX are weighted just the same as avantis AVUS, AVDE AVEM.
AVUS - Broad market factor tilt US AVDE - Broad market factor tilt Developed AVEM - Broad market factor tilt Emerging market 10% cash for shorting things. In times like these shorting is easy.
I think it’s smart to have a portion of your portfolio in emerging markets and x-us in general. Look into AVDV and AVEM.
It’s not common to have a pure scv portfolio. Usually the portfolio would be built with broad diversification and then with tilts toward scv. AVUS, AVDE, and AVEM accomplish broad diversification with exposure to value across market capitalizations and with tilts toward scv all in one fund. It’s arguably then not necessary to even include AVUV AND AVDV unless you want an even greater tilt toward scv. Either way tho, most people would want more diversification and exposure to small mid and large cap value, as opposed to just small cap.
Just more of AVUS, AVUV, AVDE, AVDV, AVEM and AVES. The value/growth spread hasn't been as larga as it is now. You need to save much less to meet your retirement needs if you start young.
There are good funds that tilt towards value/profitability in international and emerging markets. ​ Personaly I use 50% funds with a small tilt (AVUS/AVDE/AVEM) and 50% funds with a stringer tilt (AVUV/AVDV/AVES) ​ I wouldn't view crypto as a sensible asset class.
AVUS AVDE AVEM Broad market value tilt (us, developed, emerging market) < 18 NURE short term rentals, rji commodities, QVAL, IVAL highly conentrated value ETFs. The about a month after February I started shorting everything in ARKK top ten minus tesla. Finally closed my shorts new years.
VWO I think it's called for vanguard EM fund. There is also AVEM as well. Vanguard EM funds aren't that great though. You can ask ETF sub for advise.
Hi. Here are a few thoughts for you to consider: 1. There is some overlap between QQQ and VTI - especially in their respective top holdings. I'm not saying that is necessarily a bad thing. I just wanted you to be aware as you asked about diversification. 2. SMH is a sector play so may want to limit the % it makes up in your portfolio overall. 3. You could consider adding some Emerging Markets if you wanted. Something like AVEM. 4. You could also consider adding some U.S. small cap (IJR for example) or U.S. small cap value (AVUV for example). Good luck!
I would recommend AVEM for a if you want very broad emerging markets. I am currently buying a lot of FDEM fidelity multi factor emerging markets. This one does everything based on numbers only revenue growth, momentum, pe ratio so it's not market weighted and has some picks you would not normally see. There is Chinese real estate exposure to you should be aware of.
I'm sorry for my initial rudeness towards you. Really I'm more upset with most of the comment replies than to your OP. I do think you are fundamentally misguided on sensible investing, as are most people on this sub. If you want to learn more, I would read up on Fama and French or read/watch people who distill their work and put it into practice: Ben Felix has some great YouTube videos and a solid podcast on the topic and Larry Swedroe has a great website with sample portfolios of varying complexity. If you want a quick tldr of what you should add to balance out your US large cap growth heavy portfolio, then add US Small Cap Value (AVUV), Developed international (AVDV for value, VXUS for market), and emerging markets if you have the risk tolerance (AVEM and VWO are solid options). I would still read/watch up on the theory though as it'll do you better than anything you'll read here. Have a great day and solid retirement someday!
Absolutely no stocks are "Buy and Forget" outside of ETFs. Anyone who tells you otherwise in this thread is a moron that you should not listen to unless you enjoy losing money. You cannot predict a single stock that will outperform the total world market in the long run (or even really in the short run). With that in mind, if you aren't going to be checking on a stock, readjusting, etc then just buy VT or a similar ETF and ignore single stock picking. The only reason to ever pick single stocks is because you enjoy the aspect of individual investing or trading. You enjoy doing the research, watching your investments grow, and know that most of your money is lying in safe ETFs. If you aren't going to even think about the stock purchase then straight up don't purchase it! The foolishness of holding triple leveraged ETFs for the long term aside, you are super heavily weighted in large US Growth companies. If you want to actually diversify your portfolio, then consider adding US Small Cap Value and International ETFs (both developed and emerging markets). AVUV, AVDV, and AVEM are all promising ETFs to look at for these areas.
VTI and VXUS or ITOT and IXUS or AVUS AVDE AVEM really just depends on you weighting it yourself.
I'm not a Chinese large-cap long, other than a holding in AVEM (emerging market etf) and VMMSX (Vanguard fund)... Look, consider that in 1911 US regulators **broke up Standard Oil**. Shareholders took a big short term hit but eventually they ended up with a much higher total market cap (as separate companies). China is going through similar growing pains right now on the regulatory side of things. There will be some short term hits, but don't kid yourself if you think China is uninterested in having a portfolio of strong iconic brands. Also, some food for thought... Can you imagine the market panic in the US is someone like an Amazon or Google was forced to break up? Its inconceivable such a thing would happen in this decade but never say never.
I didn't know they had non us versions. If that is the case and you have access to avantis AVUS, AVDE, AVEM they have been killing it as far as performance is concerned since they debuted. There portfolio holdings are hard to really track though because they typically have at least 2000 stocks per etf outside of there small cap value AVUS. I personally went with fidelity FLRG, FDEM, FSMD, FDEV just because they have the best technicals cashflow, cost of equity, price to book etc. Avantis ETFs have been beating my holdings and choices so far this year significantly until the last two months.
Do you really want your entire portfolio to move up together? What about them moving down together? It's actually refreshing that emerging markets are finally decoupling from the rest of the world. Believe me this is a good thing, it's a sign that they may outperform in the future if US markets tank. Decorelated assets can produce better risk adjusted returns if you rebalance. That said, I'm not a fan of VWO/VFEM. Vanguard active fund (VMMSX) constitently beats it by holding a smaller book and getting momentum timing right. I've been also holding DGS and AVEM and been quite happy with both. Warning though that DGS has a heavy Taiwan weighting.
Got any sources on this to recommend? Wad looking at AVEM myself recently.
Avantis is apparently launching a targeted EM value ETF in September: https://twitter.com/EtfHearsay/status/1407015072673714176 AVEM is their lightly tilted equivalent to AVUS and AVDE. Presumably AVES will be closer to an AVUV/AVDV.
I would add AVDE, AVDV, VFMF and AVEM to that list. They are probably the best Small cap Value or Multifactor ETFs that are available. AVUV and AVUS recently grew past 1B in AUM and the others will likely follow in the next few years.
It's a shame. Avantis ETFs are awesome and I've been holding onto their internarional stuff (AVDV, AVEM). I had to open an account at Schwab just to buy them Funny thing is Merrill's stance is against active yet Avantis funds are actually passive, just not passive enough to their liking. They hold the ability to change their models from time to time, and they also do not publish how they make their index so that folks can never frontrun them.
AVUS, RPV, IJR, AVUV, EFV, AVDV, AVEM. I'm always in the market!
Year over year earnings are going to look outstanding at least through Q2 earnings, which are reported in Q3. More likely than not the melt up continues through some time in Q3 unless there is some bad news catalyst. I think there will be a correction in either Q3/Q4 but who knows if it will be a big or small correction. Here's the deal with Graham, he is a smart guy...but his timing is terrible, he gets out way too early every time. Buffet on the other hand is great at pre-IPO deals, but he's lost his hungry insinct. Look at what Buffet did last year...sold a bunch of airlines at the bottom and then sat on cash while stocks were on fire sale. Literally my elderly father who trades with a tiny account knew better than to do that. The problem with market timing is if you "get out", you better be right. That's why most pro market timers will stay long until there is a confirmed change in the bull trend...Better to stay long and eat a 10% drop than get out a year early. Even then it's easy to get faked out by a bear trap. Good luck, I still like VEA, AVEM, DGS more than US stocks... but I'm a bit cautious about having too much China exposure though and I hedge that with defense stocks.
VXUS, VEA+VWO, AVEM, AVDV are all non-US.
Nah, I tilt with both AVEM and VONG.
You forgot AVEM, which covers emerging markets.
For an US investor, the following comes pretty close with a slightly higher factor tilt and no home country bias: ​ |Fund|Ticker|Weight| |:-|:-|:-| |Avantis International Equity ETF|AVDE|25%| |Avantis International Small Cap Value ETF|AVDV|10%| |Avantis Emerging Markets Equity ETF|AVEM|10%| |Avantis U.S. Equity ETF|AVUS|40%| |Avantis U.S. Small Cap Value ETF|AVUV|15%|
AVUS, AVUV, AVDE, AVDV, AVEM. VT is also a good option.
Wow that's a very high concentration for a niche fund that captures an extremely small sector of the global market. Wht do you like it so much? I've looked at AVEM as well but am turned off by it's high allocation to Chinese companies, which im trying to minimize as much as possible
Low fee (less than 50 bps) doesn’t exist yet - I guess AVEM has a slight value tilt and is cheaper on the fee side. Yes, all the ones I consider EM value (DGS, DEM, EYLD) you have to pay dearly. Cambria’s EYLD was a clear winner for me and have close to half my portfolio in it.
Just fyi, AVEM is 33% Chinese holdings vs VWO is 40%, so it's still very Chinese. However, I do like the value tilt as well.
If I were to hold EM it would be a value tilted fund (FNDE, EYLD, maybe AVEM) but I don’t. I hold 35% ex-US and see no reason to overweight EM so that would be an 8% holding which doesn’t move the needle. I’m plenty diversified and uncorrelated now with all the developed ex-US in small/deep-value (FNDC & IVAL). If either of those funds included EM I wouldn’t balk, but for now I sleep great at night and don’t think a token holding would move the needle. 5% is a waste of mental energy.
Thanks, yeah have heard they run a tight ship with the funds and have long term clients that buy into their philosophy. BTW, if you’re checking out AVEM I would look at EYLD as well. I liked EYLD much better from a value perspective granted the liquidity is garbage. Both are good funds.
I’ve come to the conclusion as well that at least right now I want active management in EM. Keep in mind if you’re buying VWO you’re putting about a quarter of your money into Chinese internet companies (Tencent, BABA, JD, etc). This isn’t necessarily a bad thing, just buyer beware. I picked Cambria’s EYLD which has an amazing track record, PE of like 12, forward PE of 10, good ROE, and good commodity exposure. Most importantly to me they pick companies that aren’t highly levered. Then I picked and chose the Chinese large caps I wanted separately on the NYSE/Nasdaq. There’s a lot of garbage in EM and overvaluation in India that I wanted to avoid and EYLD will do this for you. EYLD for me was superior to VWO, EEM, DGS, DEM, FNDE, and AVEM by a long shot. Actually sold all my DGS and VWO to move into it. Regardless, EM Value has the best valuations on the planet right now and it isn’t even close. GMO and Research Affiliates are spot on with this.
This is the way. The Cambria EYLD is far superior to any EM fund I’ve come across (VWO, EEM, FNDE, AVEM, DGS, DEM) and I’ve researched this heavily. About half my investments are in EYLD. The poor liquidity is maddening but this is a buy and hold for the decade. If you want exposure to the Chinese large caps you can pick and choose them on the NYSE/Nasdaq which is what I did. Curious to the response above - how did you come across Cambria, they’re fairly obscure and I had to do a lot of work to find them.
Ooooh, AVEM sounds interesting. I've been looking for a good EM fund with a value tilt. I believe in EM because when it has a good year it goes completely gangbusters, like 30-50%, but I've been burned on the overexposure to China in VEMAX/VWO. Also, for those of you who follow GMO's investment outlook, emerging value is the one place they believe any decent real return can be found in the world over the next seven years.
Macro economics and politics matter more than valuations in EM, but don't write them off just due to political risk. With valuations so high around the world, there really aren't any safe bets anymore. You are taking another type of risk by being entirely in developed market equities. A bet on EM is simply a bet that things will "get better" rather than get worse. If China can slowly grow to be 20% less crooked than they are today, then financial markets should reward them with higher multiples. If you are okay with taking on the risk of investing in EM, here are some options besides a market index: - DGS: One of the two EM ETFs I hold. It holds small companies only, so hopefully less political risk, and screens/weighs by dividends, because unlike financial statements you cannot easily fake a dividend. - AVEM: A relatively new ETF from Avantis that holds a smaller universe than VWO, with tilting towards quality/fundamentals.. without making big sector bets. Yes, fundamentals in EM can be cooked, but IMO this ETF will lean away from market bubbles that are common in that sphere. The team managing this ETF has a pretty good pedigree. - Actively managed funds: Vanguard has a good active fund. T Rowe does as well but I believe theirs is closed to new money. My advice is to pick a fund that checks these marks: fee under 1%, low turnover, less than 500 stocks, manager has skin in the game (you can verify via Morningstar), and I would avoid anything that leans too heavily towards growth/tech. All the above matter more than recent performance. For the record, I am heavily invested in EM but I also hold $1 in conflict hedge for every $5 of China exposure..so I am loaded up on LMT, NOC, LHX, and EAF. If China ever attacks Taiwan all global markets will crash anyway though, not just EM.
You think so? The reason I was contemplating this switch was because of the exposure to mid and small caps in AVEM. XSOE is almost entirely all large cap, so that was my reasoning.
> XSOE I think XSOE is marginally better than AVEM. I would just hold.
Yeah, I see what you're saying but I want to replace XSOE in my portfolio with AVEM. I'll have a small gain on XSOE but that's okay.
Are there any tax implications if I sell an ETF at a profit and then use that money to immediately buy a "sufficiently similar " ETF? For example, hypothetical situation, if I sell VWO at a profit today and use that money to immediately buy AVEM or another Emerging Markets ETF...are there any tax implications to that or does that get taxed normally, i.e. the gains on VWO gets taxed in the usual way and then we forget all about that ETF? I'm pretty sure there's nothing similar to the Wash Sales rule because the original ETF was sold at a profit, but I just wanted to confirm. Thanks!
Are there any tax implications if I sell an ETF at a profit and then use that money to immediately buy a "sufficiently similar " ETF? For example, hypothetical situation, if I sell VWO at a profit today and use that money to immediately buy AVEM or another Emerging Markets ETF...are there any tax implications to that or does that get taxed normally, i.e. the gains on VWO gets taxed in the usual way and then we forget all about that ETF? I'm pretty sure there's nothing similar to the Wash Sales rule because the original ETF was sold at a profit, but I just wanted to confirm. Thanks!
Currently I'm at 10% for Emerging Markets. AVEM has that slight tilt to mid-small value that I don't think DFAE has, which is what made me go for it. But I might actually take another closer look at DFAE.
I'm a big fan of AVEM and AVUV. But I wish the Avantis folks had a Mid-Cap ETF too. I'm on the lookout for one and I came across JHMM. I liked the look of it but I found no way to justify a 0.42% ER when SCHM (which is pretty similar in terms of holdings and past performance) is 10x cheaper at 0.04% ER. [https://www.jhinvestments.com/investments/etf/us-equity-funds/multifactor-mid-cap-etf-jhmm](https://www.jhinvestments.com/investments/etf/us-equity-funds/multifactor-mid-cap-etf-jhmm) [https://www.schwabfunds.com/products/schm](https://www.schwabfunds.com/products/schm)
I am in love with all of the Avantis funds. AVEM was on a tear last month. I personally own them and would take AVUS over VTSAX in a heartbeat if my 401k plan allowed it. I don't like telling people to buy their funds though because I might come off as your typical pump and dump clueless Redditor. You really can't go wrong with any of their funds.
It depends on your thesis. Myself and OP think a major crash is coming so want to be ready for it with more value-based stocks. SPEM currently sits at a PE of 22.19 if you don’t exclude negative companies. The forward PE is 16.39. The current PE is the highest it has ever been at least since 2006 which is the furthest I can go back, EVEN in the 2007 bubble when it hit 20.10. The forward PE is also the highest it has ever been. Usually you’d expect it to be between 9-15. Return on equity and return on sales is the lowest it has ever been (granted Covid probably messes with that a little). Even though SPEM valuations aren’t as a egregious as SPY, I want something a little more value-oriented and defensive. If you believe in reversion to the mean, DGS could be argued as even slightly undervalued right now if compared to historicals. I don’t like AVEM as much as FNDE just because of the recent shoot up on PE on AVEM. Keep in mind SPEM has outperformed these recently so if you took this advice a few years ago you would have lost money. Personally the tea leaves are telling me to get very very defensive in my holdings.
Why DGS and AVEM for emerging markets? I am deep in SPEM and I would like to know why you’d pick DGS over SPEM?
This is very similar to how I’m tilting my portfolio - utilities, midstream oil transport, and tobacco. Lots of cash in multiple currencies too. I think DGS is the best ETF of any in the world right now and am heavy in it. I looked at AVEM and while I like it better than EEM, I still think it is pretty exposed in a blow up. I got a tip today for FNDE which I like a lot better than AVEM (and trades similar to DGS). I plan to pair it with DGS. I also bought some ATCO Group (ACLLF) which is primarily a utility but they have some other interesting infrastructure operations which have promise, there was a good article on seeking alpha on it recently.
>What are some best practices for buy ETF shares? Is there a certain time of day that is best? Generally it is always a good time during trading hours. Spreads for most ETFs are quite small, so I don't think it is worth spending much time on microoptimizing it unless you want to invest a large amount. ​ >Is it a bad idea to hold off on investing until covid is over? I feel like the markets may still be more volatile than usual as the impact of covid is not fully realized Time in the market beats timing the market. ​ >If you need to sell some stocks/ETF once a year or so, is it best time to do this? Is a bear or bull market more ideal to sell? I would sell when you need the money. Your asset allocation and risk capacity should consider your liquidity needs. Do not try to time the market. >Does the CRSP stock market index perform better than the SP500 index? Articles like [this](https://www.valuewalk.com/2020/02/sp-500-vs-total-stock-market-index/) say it doesn't. However, when I backtest VTI vs S&P500 funds, VTI has always outperformed them VTI is better than VOO because it covers a larger portion of the market cap. VT is even better because it covers the entire stock market. >Is there an index fund that track the stock market that has a better return than VTI? DFSVX has outperformed the SP500 since its inception in 1994 by 85 basis points per year even with fees of 51 basis points. AVUV is a fund that has a similar methodology as DFSVX and only has fees of 25 basis points. Note that the reason for that is exposure to the value and size risk factors (and profitability since 2013) and doesn't cover the whole market. The fund should be combined with a total market fund. (I hold a portfolio with AVUS/AVUS/AVDE/AVDV/AVEM)
Big fan of the relatively Avantis ETFs. AVEM for emerging value AVDF for developed small cap value Both have value tilts, tilting away from high-valuation companies.
Am definitely going to pick up some AVDV now, I must have missed this. Right now I have a blend of VEA and EFV which is too large. If you have time - how did you decide to go with AVEM over VWO and that extra fee was worth it? Or was it more to limit the China exposure? Or was it faith in Avantis’s proprietary selection?
Nice, in that case I would check out AVEM and AVDV as they have best in class expense ratios for what they offer and reasonable sector balance. Note for some reason AVDE doesn't have a very aggressive value tilt so it's a toss up it's worth it over VEA with the higher expense ratio.
As far as ETFs go, I'm a big fan of the recent Avantis ETFs (no, I don't work there). Smart group of quants working there and their ETFs are weighted on fundamentals rather than market cap. Unlike most "value" or fundamental funds however they try to keep sectors balanced. Developed Ex-US: AVDV, AVDE Emerging Markets: AVEM They have US ETFs as well but I don't own them. I also have a pretty sizable holding in DGS which is an emerging market small cap dividend ETF. Rationale for the dividend screen is that small cap financials aren't very trustworthy in EM, but dividends don't lie. The risk-on side of my portfolio isn't for everyone, 25% in AVEM/DGS..about half of that ends up being China/Taiwan/Hong Kong. I hold a sizable amount in defense stocks to hedge China conflict risk. I like at least 1 defense dollar for every 5 dollars in Chinese exposure. Almost all my recent US purchases are in individual stocks. It's getting very hard to find things that look safely valued. Mostly REITs, utilities, defense, natural gas, tobacco, reinsurance, farming.. Some climate change stuff as well, but very hard to find deals in that sector.