AVUV

Different_Bee435

Hello! I am a 25M from Switzerland. I actually started investing about a year ago after reading about FIRE and such. But I recently discovered the Bogleheads sub, and reading through, I have some second thoughts about my portfolio, so I would really appreciate some feedback: * 50% VOO * 35% VXUS * 15% Cash in CHF (Swiss Francs) My rationale at the time was: 1. The only decent Swiss bond funds have had negative returns for a long time, and Swiss bonds in general have very poor returns; I'm better off holding the "safe part" of my portfolio as cash in a savings account and get at least \~1% interest. 2. I chose VOO over VTI because companies in VOO have more income from ex-US markets than the smaller US companies, which reduces my exposure to USD (and thus the currency risk, i.e., my portfolio returns are less tied to the USD valuation). I thought this was important because CHF is a strong currency and typically appreciates compared to USD, and I didn't want to have such a significant part of my portfolio to rely on a single currency I'm not even using in my day to day life. However, I've seen that VTI is preferred over VOO for it's greater diversification, and now I'm wondering if I made a mistake by using VOO for my US equities component. My questions: 1. Is there really a significant difference between VTI and VOO, considering they have such similar returns? 2. Is the VTI recommendation geared more towards US investors, for whom the additional reliance on USD is not an issue? 3. Am I fine just holding the course, or should I sell all my VOO and buy VTI instead? 4. If I should sell the VOO, should I do it all in one transaction, or multiple ones over time? I'm afraid that if I sell, there might be market fluctuations in the 2 days until the transaction settles, and I might have to buy VTI back with a disadvantage. 5. I've read in some comments that VTI is technically riskier than VOO because of the small caps, but it is a compensated risk, because they have higher returns over extremely long periods of time. What if I actually prefer lower risk / less volatility, would VOO be better suited for me in this case? Also, recently, I've been a bit concerned about the high tech concentration of VOO, and a potential AI bubble (I think a lot of the AI noise is just hype), and was wondering if I should diversify away more from that, and how. VTI is only slightly better than VOO in this regard. Extra questions: 1. Should I overweight VXUS more? 2. Would moving from VOO to VTI be sufficient for this purpose? Although it would defeat the purpose of not depending so much on the USD... 3. Maybe add a small-cap value fund, like AVUV (I've read a bit about factor investing, but I'm not sure I would like the extra risk, even if it's compensated), so that I'd have something like 35% VOO + 15% AVUV? Again, it would defeat the purpose of reducing dependency on the USD... Note: I don't invest with a home country bias, because all the Swiss equity funds are concentrated 50-70% in 3-5 companies, which have < 5% earnings from Switzerland, so it wouldn't actually provide any meaningful domestic exposure, or any additional exposure to the CHF. Thanks in advance! x-posted from r/Bogleheads

_galaga_

You've gotten some good advice so far. One tool to check fund overlap you might be interested in is: https://www.etfrc.com/funds/overlap.php Personally, I'd ditch VYM, especially if you're younger and have a decade+ to lean more into the growth side of things. I'd also keep QQQM because despite the fact tech stocks have had a 20 year run I don't think the party is necessarily over. Just my opinion. I am comfortable with a heavy tech emphasis but you might not be. One way to think of the overlap between funds is that you're able to emphasize certain sectors intentionally because you feel the risk/reward is in your best interest. If you felt similarly about, say, small cap value you could add a position in AVUV to a base position in VTI and achieve the same thing. It's like you have a pepperoni pizza (VTI) and you add extra pepperoni to it (QQQM or w/e) because you want more of that one ingredient.

AP9384629344432

I personally just buy AVUV + AVDV for small cap value, and plain old VXUS for ex-US. AVDV has pretty large weights into the UK and Japan (and importantly to me, no emerging). But I try not to micromanage things very much. I just picked funds I think have a good track record /accomplish my goals. Dimensional (which I dont invest in), Avantis satisfy that imo. They use systematic filters to pick stocks, similar to SCHD but much more diversified and of course small/value instead. I don't tilt emerging markets though because I am unconvinced it is necessary (and ex US developed + small + value seems diversified enough). Plus I don't like the massive tilts such funds have to China. You can look up AQR's value spread charts to see what percentile of cheapness value stocks are globally relative to growth. (Or check out their other research on the website). AlphaArchitect also makes posts in this spirit. Similarly, you can look up ex US valuation ratios relative to US, usually Bank of America releases charts like this. On Twitter I like to follow graphs and data from Ben Felix, Eric Servo, HMLCompounder, Ben Carlson, (and their mutuals). I don't apply much of this logic to individual stocks. My thesis on an asset class does not imply much about individual equities which can have huge dispersion in returns and idiosyncratic risks. So I don't try and pick ex US stocks myself.

MotoTrojan

QVAL, AVUV, and QMOM too. Plus a 100% overlay of 20% vol managed futures.  Good luck!

FeedbackTypical

VOO, VXUS, AVUV. You can throw in some QQQM or VGT if you would like.

RandolphE6

VXUS for international is the way to diversify outside of US. Otherwise another option is AVUV if you want small cap value for factor investing in US.

MotoTrojan

First off in the future I would buy VOO, or perhaps VTI (total market) since the expense ratio of SPY is a good bit higher, and you don't need the added liquidity. AVUV (US small-value) would be a good option to diversify. If open to International equities you could buy AVNV, a fund-of-funds that is developed and emerging-market value stocks.

Dougnifico

SCHD QQQM and VXF + VBR (Now AVUV) I credit QQQM with the throw over the edge. I hold a bigger QQQM tilt than SCHD at about 2:1.

MotoTrojan

Was your 401k a Roth or pre-tax/traditional like most 401ks by default? If the latter, be careful as moving to Roth is a taxable event. May make sense in your tax-bracket, but just pointing that out. I would focus on small-value personally. AVUV, AVDV, and AVES would give you global exposure. Want to make life simpler? Just buy AVGV which is a global value fund (holds those tickers plus some large-value). Don't want as much value exposure (want less tracking error, but less expected return)? AVGE is a similar product but with more modest tilts, and with 70% US instead of 60%.

MotoTrojan

I’d agree but I’d argue VTI + AVUV is even better.  S&P500 has a natural buy high sell lower filter. Look at TSLA/SMCI. If you want to avoid non-value small caps then at least buy a truly cap-weighted large cap fund like VV. 

thedarkestgoose

AVUV. You are better off with an ETF over a single company.

cafedude

DCA over a couple of years. Tbills are paying in the mid 5% range. 2year treasuries at around 5% - that's safe money. Put $5K into VOO and the remaining $75K into a Treasury Direct account buying bills in the 4week to 1 year duration. Also a bit in the 2yr. Then as they mature put those proceeds into VOO and/or AVUV.

ExhaustedSloth922

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?

AICHEngineer

You should regard all of your assets as one portfolio. The sum of its parts play together under the markowitz portfolio framework to give you an overall risk / expected return characteristic. Some accounts are better for different things, however. My 401k is limited in its options, so I get a lot of my international exposure in my 401k. It's basically 50/50 FXAIX/FTIHX. In my Roth IRA, because rebalancing is free, I engage in the "hedgefundie's excellent adventure" portfolio as of very recently in order to access leveraged beta exposure since I am very young. Rebalancing is every three months between UPRO and TMF to reduce the worst case drawback periods while still benefitting from leveraged exposure to equities and long term treasuries. This is pursuant to the works of Ayers and Nalebuff about time diversification of equity exposure. See the below paper if interested. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1687272. I also invest in small cap value funds in my IRA and brokerage, since I cannot do so in my 401k, again that's why my 401k serves as a traditional core portfolio of diversified equities with an overweight to international since my IRA is largely leveraged S&P500 exposure and small cap value. Avantis funds AVUV, AVDV, AVES for systematic factor tilt exposure.

MoneyTin

I would go looking at their individual expectation of return and volatility, then I'd calculate the allocation that can maximise me the return from all 3 together Use Excel if you know how to calculate it... I use Diversiview (diversiview.online) as I found it's the single one it does this stuff... Tried your example and it gives AVDV 48.12%, AVUV 46.88% and AVES 5% for an expected portfolio return of 10.93% (compared with portf expected return 6.31% if you keep each equal at 33.33%). The %s will change in time so keep an eye on it..

Xenikovia

AVUV $2.2B average market cap VIOV $2.6B average market cap FNDA $3.4 average market cap

ok_read702

AVLV, AVIV, AVUV, AVDV, AVES, AVMV. Or AVGV that captures them all.

Key-Mark4536

Neither of these is a knock on IHDG, I don’t really know that one, but there are basically two reasons VXUS is the default:   1. The sub has a Vanguard bias, explained in the FAQ. One could just as easily say SWISX or EFA, but Vanguard tickers have become the shorthand.  2. Passively managed funds tend to be cheaper and simpler, and most investors would benefit from that. There’s no need to monitor performance or worry about a change in fund management.  That being said, the sub will occasionally acknowledge an actively managed fund that seems to be performing well, such as AVUV (small-cap value). 

the_leviathan711

I use AVUV, AVDV and AVES.

AbbreviationsFar9339

25% is AVUV, 5% each of AVDV and AVES. rest is VOO

hellodesk123

How do you weigh out your AVUV AVDV and AVES holdings? 33/33/33? or mirror the global market?

abzz123

They are not “actively managed” where fund manager just decides to buy whatever. They follow factor investing and a lot of bogleheads have AVUV in their portfolios

AbbreviationsFar9339

AVUV has only been around a few years but it has outperformed SLYV and IWM pretty significantly since inception Disclaimer: I own AVUV, AVDV and AVES [https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=rqiyLcyPmbzKEA7Woj3ak](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=rqiyLcyPmbzKEA7Woj3ak)

harrison_wintergreen

> Semi active. AVUV is 100% actively manged. it says so on the fact sheet. >This fund is an actively managed ETF that does not seek to replicate the performance of a specified index. https://res.avantisinvestors.com/docs/avantis-us-small-cap-value-avuv-etf-fact-sheet.pdf

AbbreviationsFar9339

I like AVUV.  Semi active. Has a quality.  screen.  Also any etf that tracks russell 2000 would qualify as small cap fund

AP9384629344432

Yeah I agree the 1 year comparison is being extra favorable. That's why I like the since inception statistics (Oct. 2019) as it pre-dates Covid and the regional banking crisis. As for KRE outperformance, here are some speculative thoughts: - The worst hit regional banks aren't actually 'small' caps but mid to large caps. - The deposit base of those smallest community banks is mostly retail / small businesses who have stickier deposits than say the start-ups who used say Silicon Valley Bank - Maybe you to have enough AUM before you're able to take reckless amounts of risk? - The financials in AVUV aren't all banks. I checked out the top 50 holdings to look at the financial picks. One of the largest holdings is Jackson Financials, which sells annuities. Or Radian Group which does mortgage insurance and MGIC for life insurance. (I only omitted 3 or 4 regional banks in these top 50 picks). It's not clear to me that these will suffer more or less with higher rates. In fact, I wonder if higher rates are actually worse for some of the other sectors in the fund, like industrials or consumer discretionary.

pl_fanat1c

That's interesting. If you look at AVUV on a chart with a time just before SVB, they definitely under-performed a bit vs. the wider market. However, if you include a regional index like KRE, they are doing exceptionally well in comparison which coincides with what you are saying. Maybe they are picking better banks / financials.

pl_fanat1c

One thing that concerns me with small cap ETFs are their exposure to smaller financials that may be very sensitive to higher for longer. Does AVUV avoid them or have a philosophy on them?

AP9384629344432

AVUV is beating the S&P 500 both over the last 12 months and since inception, just saying. Maybe investing in fully passive small cap ETFs is a bad idea.

Kayshift

What ETF's do you like of small caps? I use AVUV can anyone else point out some others

Fun-Veterinarian-401

I never get why people get a big piece of the pie and then thing DCA requires them to spread it out... DCA isn't about spreading out a big lump sum....DCA is built on continuing to invest 15% or more of your income month in and month out....you aren't trying to average your input...your trying to get the money in the market and let the market over time average out the risk for you. Spreading out a lumpsum into multiple deposits is just trying to time the market. Get the money in there and let the time horizon, while you are continuing to pump more money in there, take care of the market volatility and such. Invest it in VT, or VOO, or VUG, or AVUV, or QQQ, or mutual funds or whatever. Get it in there, spread it out according to your investment plan and let it go to work. Otherwise you are just trying to time the market a different way.

JeffB1517

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.

MONGSTRADAMUS

I can tell you what I did for my scv but I don't know if its best for everybody. I used vti and vxus as opposed to VT for my base holdings. added avuv and avdv for some tilting. The overall look of portfolio is 45/30/15/10 VTI/VXUS/AVUV/AVDV. I was basically trying to keep 60/40 US/EXUS and also 3:1 All market to scv tilts.

Biggiesmalls_____

I have a TSP with 100% allocation to the C fund (65% of my total portfolio). I max it out. I just opened a Roth IRA and brokerage account and between the two I’ve added 10% XMHQ (mid cap quality) 5% AVUV (small cap value) 10% XLK (tech sector) 5% FBTC (bitcoin spot) and the rest FSELX (semiconductor etf)…..and oh yeah about $200 a month into TSLA. I have no experience in this but after the last 7 days of looking around, that’s what I came up with. I have no international exposure and I’m ok with that.

brewgeoff

If you’re trying to gain some diversification from the funds available in the TSP then I would consider funds such as: MOAT, MXHQ, AVUV, COWZ, FNDX, IWF, QQQM, DGRO

creemeeseason

Actually, I think your spot on (though I guess we'll see). People generally underestimate the amount of multiple expansion that has taken place in tech since 2016/17. Take Microsoft. Until 2017 it traded at of below 20x earnings. Now it is at 36. So almost half of its run has been multiple expansion. Will it go to 70x in the next 5 years? I doubt it. Not to say it's not a great business and it won't grow, but I doubt it'll repeat its performance. On top of that, we've been in a golden age of growth stocks, low rates, large fiscal deficits, and no real competition in the stock market from ex-US. I firmly believe that if you want to beat the market, you need to think differently than the market. I'd rather own AVUV than VOO going forward, honestly. Or at least larger amounts of it.

AP9384629344432

Interesting seeing so much strength in AVUV while large cap growth is melting down today

Soluproc

I’m in AVUV but not heavily. With the talk of interest rate hikes it feels risky.

Biggiesmalls_____

QLD, VOOV, AAPL, IXUS, AVUV, VGT, FMAGX, FBGRX, FSKAX, FBTC Absolutely no idea what I’m doing lol

throwitup1124

10% AVUV. good enough tilt for me

admiral_corgi

Equities: VTI, AVUV, AVDV, AVEE, AVXC Bonds,: VGLT, FALN, HYMB Commodities: GLDM

adopter010

40 NTSX, 40 NTSI, 10 AVUV, 10 DISV  I end up over-allocating to emerging markets in other accounts to compensate - no way am I dealing with that tax drag.

MotoTrojan

QVAL, AVUV, QMOM, IVAL, AVDV, IMOM, AVES and a bunch of commodity and bond futures (long/short trend following). Overall 100% equities 100% exposure to a \~20% volatility managed-futures program. No S&P500 in sight...

Ty-Knight-Composer

I am new to investing. I opened my Roth IRA in March and have contributed the maximum for 2023 and 2024. My time horizon is 20 years. My wife and I both have very good and generous pensions (75% of our top 3 earning years, +3% for each additional year we work). I feel somewhat comfortable with risk given our pensions. Is the following allocation any good? I’ve seen people say not to get into semiconductors because it’s already priced in, and not to chase previous gains - but I’ve never invested before so I am establishing my investment strategy, portfolio, and allocation brand new. I’m not chasing previous gains and do believe in what I understand to be the current and future value of semiconductor technology. I’ve read that adding scv to a broad portfolio based on something like the S&P500 can help provide additional returns above and beyond just putting everything into the S&P500. What are your thoughts? FXAIX: 80% AVUV: 10% SMH: 10%

MotoTrojan

This argument would make sense with small-value (AVUV or similar) but VUG is not expected to outperform the market. Just because it has recently (yes 10 years is recent in markets) doesn't mean it is expected to continue.

Fun-Veterinarian-401

Depends on how she uses the EJ advisor. Also depends on how much you have allocated and what fees you are subject to. If its a select account you only get hit on commission, but it sounds like you have one of the managed funds. Depending on how much is in their the fee can be well below the 1% point. I have a chunk of money at Edward Jones for a variety of reasons. Primarily I know the advisor and he has saved me from myself on quite a few times both in the funds he manages and in regards to my own investments. I am well ahead of where I would be investing on my own, so the like .6% annual fee he's getting doesn't bother me a bit. I've gotten way more back then he has cost. My guy is fine with me making suggestions and discussing moves. He even switched his stuff over to AVUV after I requested he move me from IJR to AVUV. He's not batting 1000, but his investment advice is better than my own :) and he's currently on a 3 year run of killing the S&P so I'm good. Plus some of their long term planning tools for your retirement are pretty dang informative.

joe4942

I'm referring to the indices, small cap benchmark being the Russell 2000. AVUV isn't doing much better, only up +3% since the peak of 2021 (900 days).

Successful-Stomach40

Small cap value have historically done pretty damn well so I'll see how AVUV does

slippymcdumpsalot42

Strange, my small cap index holding (AVUV) is up like 200% in the last 4 years since this time 2020. What kinda crap you invested in?

MotoTrojan

AVUV has a momentum screen on its trades that will allow it to hold names that have positive momentum a bit longer even after they exit the screen, and similarly will defer buying names that enter the screen but are trending down. But overall, SCV doesn't win by holding 10 baggers necessarily. Migration is a big part of the returns, buy low sell high!

Quirky_Ad2466

Yes, small-cap value ETFs like AVUV may sell stocks that outgrow the small-cap category to maintain their investment focus. This could lead to missed gains if those stocks continue to perform well.

soccerguys14

VUG, QQQM, & VOO for me. Sprinkle a little AVUV

Extension_File_5134

Any small cap value ETF? Look at the holdings in $AVUV or $GSSC to answer your question.

RandolphE6

VTI and VXUS will cover the US market and international market which basically gives you everything. You can consolidate this into a single fund VT which has everything. Another popular pairing is VOO and AVUV. That's the SP500 (large cap) and small cap value. There will be no overlap.

superbilliam

Teach me...I'm wondering about them and need to learn why or why not to get one. I honestly cannot form a clear opinion on them. To use a metaphor, there is so much "candy" in the store that I keep having decision fatigue trying to get the best piece. I have an S&P ETF (SPLG). I have small cap value (AVUV). I have internationals (IDEV). I have loads of individual picks that seemed good after some digging. Am I misguided in thinking gold may be something else to diversify into? I'm genuinely curious and would love to learn from someone who has experience without paying an advisor to "sell" me on their ideas. Thanks in advance for any advice you're willing to share. 🙏

ChemicalBonus5853

By your definition 0, I don’t like Crypto or individual stocks. By mine 30%, 20 AVUV and 10 AVDV.

AICHEngineer

Rabbit hole time! What you're looking for is *risk factors*. Efficient markets only systematically compensate risks that investors cannot diversify. These priced risks have been defined in the 5-factor capital asset pricing model by Fama and French. The factors are equity, value, size, reinvestment, and profitability. Equity risk premium is the expected return in excess of the risk free rate (tbills or bonds or whatever is the best yielding risk free asset at the time). You get the equity risk premium exposure in your portfolio by simply holding stocks at market cap weights, like VTI in the USA or VT for global markets. Other priced risks are small caps, value stocks, and then especially value stocks with robust profitability or value stocks that reinvest conservatively (this means small cap value instead of small cap growth). Value in essence means that investors are demanding a greater discount on future cash flows (aka larger *expected* returns) because they precieve some risk in that company. Diversifying among risky companies like this leads to higher expected returns, so your portfolio grows faster/larger. Small cap value has outperformed the market since 1993 when the first true small cap value fund was deployed by Dimensional Fund Advisors, DFSVX. This fund returned like 11.18% CAGR when the s&p500 returned 9.95%. that's 30 years of over a percent per year outperformance, enormous implications for compound growth. We now have multiple great products in the small cap value space. AVUV (Avantis small cap value, very similar to DFSVX) and DFSV (ETF version of DFSVX released 2021). In a different vein, some small value funds have focused on free cash flows and future cash flows and lean into raw profitability like CALF and RWJ. AVUV/DFSV focus on low price to book companies with robust operating profitability so they have a financial focus, CALF and RWJ are focused on raw cashflows so they lean into consumer discretionary. I personally have 30% of my portfolio between AVUV, AVDV, and AVES. AVDV is international small cap value. AVES is emerging markets value.

qw1ns

Review these ETFs => QQQ (100) or SMH (30) or even VGT (600+) or AVUV (600+)

qw1ns

May I know why S&P (I understand 500 companies behind it - reliability) than QQQ (100) or SMH (30) or even VGT (600+) or AVUV (600+)?

AICHEngineer

SPLG for S&P500 AVUV for US small cap value. AVDV for developed international small cap value. VEA seems pretty good for developed mid and large cap. AVES for emerging markets value.

AICHEngineer

Yes, you should be risky. However, you should only take compensated risks. That's how you build wealth. Watch "5-factor investing with ETFs" by Ben Felix on YouTube. It's a great primer for understanding why financial markets reward certain risks. You should have a portfolio based on market cap weighted equities. After than, you will overweight certain priced risk factors like value, size, profitability, reinvestment, as defined in the 5-factor capital asset pricing model. The theory has held up for 40 years, and the realized outperformance has been over a percent in excess of the market when dimensional deployed their small cap value fund in 1993 (DFSVX). Compounding with an extra percent per year is *enormous* for growth of your portfolio. Check out that YouTube video. Some favorites for accessing the value and size and profitability premia are DFSV and AVUV for US small cap value. There's also CALF and RWJ, they focus more on raw cashflow and cashflows growth mainly in consumer discretionary companies, whereas AVUV and DFSV focus on financials and low price to book companies with robust operating profitability. These different approaches to the value and profitability premia will perform differently in different market conditions. As lending rates go down, financials in small caps do better since mortgage lending is pegged to the 10-yr rate. Covid revenge spending has really benefited consumer discretionary. Stuff like that. Diversification is great.

Investiv

Sorry, I misread and thought you were only invested in those 4! VOO and VTI still have a lot of tech exposure since they're market cap weighted. Which I still think is fine. But if you want to diversify out of tech, I'd consider the MOAT ETF (only 14% tech). It's not talked about very much, but quietly beats the S&P500 most years and is well diversified with companies considered by the managers to have a long term competitive advantage. If you want more exposure to smaller companies, consider CALF (11.5% tech) and AVUV (5% tech). There are also sector specific ETFs, e.g. XLV for healthcare, GRID and PAVE for infrastructure/industrials, etc. Not sure of all of those are available where you live but just some suggestions.

AP9384629344432

Ugly day. Notice that CELH is quite robust today despite the rate hikes. [Interesting thread](https://twitter.com/elasticretreat/status/1777303981489856713) about NVDA and how the need for fund managers to hedge their massively long momentum bias will lead to a squeeze on anti-momentum semis of lower quality. [Good thread on China accelerating](https://twitter.com/shehzadhqazi/status/1777828275407950244). And a [thread from the Koala on HCC](https://twitter.com/YellowLabLife/status/1777796124536885318). Make sure you follow the koala if you're into coal. I pointed this out on the last big red day, but once again AMD is getting hit hard while NVDA is green. Suggests AMD is seen as far more overvalued than NVDA and more at risk to higher 4 longer. (Not saying that's true or not) --- I bought a lot the past 2 days. Today I bought $500 of my Target Retirement Date Fund, $200 into VXUS, 1 share of XOM if the geopolitical rumors about Iran + Israel are correct, 3 shares of AVDV, 2 shares of AVUV. Yesterday I had bought 1 share each of SBUX + UI and again 3 shares of AVDV, 2 shares of AVUV. I'll have more to say on UI later but been reading some interesting points regarding their surveillance business (Unifi protect) and some tailwinds from bans on Chinese software.

MJinMN

I think VOO is heavily weighted towards mega-cap tech/growth, so I think pairing it with AVUV (small cap value) is a good diversification strategy.

AICHEngineer

That's not smart money, that's astrology for men. Technical analysis is like casting bones and trying to read the future of the stock market in the pattern they make in the dirt. *Actual* smart money for a retail investor is tailoring a portfolio for your desired risk adjusted returns. Able to handle decades of sequence risk, volatility, etc? Maybe overweight to the 5-factor CAPM risk premia with small cap value profitability funds like AVUV or DFSV are the right move for you. Efficient frontier in the market is the market portfolio, but you can reduce your risk adjusted optimization for larger future expected returns with excess compensated risk premia with value, small caps, profitability, reinvestment, and equity.

AbbreviationsFar9339

I’m around 25% AVUV. I also have around 5% each of AVDV and AVES for international.  Like AVUV over slyv for the profitability/quality screen. Outperformed it significantly last year. Tbd if it continues 

SnS2500

The past three years VXUS has performed worse than a savings account, largely because China is ballpark -20% for the three years, while AVUV has performed approximately as well as VOO, with an entirely different mix of stocks. If you want international exposure, for the time being at least, consider other options that are not vulnerable to dictators.

AP9384629344432

> Why wouldn’t the 5 factor model work for mid/large caps for example. So the 5 factor model includes the 'size' factor, so asking if it works for large caps doesn't really make sense. Your question is really, do factors other than size work, e.g., does a value tilt to large caps beat a growth tilt? The answer is yes over the long, long run, but recently not as much, and you're borderline statistically insignificant. The reason I like targeting size + value (small + value) is it is empirically more robust. Other factors include momentum (which AVUV incorporates), investment style (i.e., doesn't aggressively raise capital like a start-up), profitability/quality. You can look directly at the various Dimensional index funds which are created with the help of Fama and French and see the outperformance.

tired_ani

About 3 months back I allocated around 10% of my portfolio to AVUV, so encouraged to read positive outlook on it. However I wonder where one draws the line between Actively managed , systematic active and passive. Why wouldn’t the 5 factor model work for mid/large caps for example. One wonders if the Fama french large cap index beat the S&P500.

creemeeseason

Probably. I know AVUV is popular. I just like owning companies.

TechnicianExtreme200

IWM and VTWO are small cap index funds. AVUV is a factor fund, it focuses on small cap *value* stocks, with additional screening by momentum and quality factors. AVUV is run by people who formerly managed Dimensional's small-cap value mutual fund DFSVX, which has outperformed the S&P 500 since its inception in 1994.

AnotherThroneAway

I keep seeing this recommendation. Why AVUV over IWM, VTWO, etc?

illegal_deagle

AVUV

weealligator

Yeah for my IRA I’m all the way VOO/AVUV. I went in just before a minor dip but it’s good practice for going in without trying to time it.

iiSquatS

I think a Roth IRA is the best investing tool in the world. I mean, my gains will be tax free, for 30 years. I wish I started earlier. You’re talking at a 8% rate (historically) I’ll see $300k+ of gains that I can withdraw completely tax free. If my traditional 401k shows a million at retirement, it won’t be a ‘true’ million since I’ll get taxed on every withdraw. If my Roth shows a million in retirement, it’s a true million that I have access too. What I personally do is contribute to my work 401k that gets a match, our limit is $100 a week, so I put in $100 to get the full $50 match, and then whatever I have leftover that I’m able to, I contribute to my Roth. Some weeks it’s more, some weeks it’s less, depending on my payments and bills that week. Some weeks it’s only like $20 I can put in my Roth, others it’s $100. Idk, it’s just pretty cool all my dividends and gains are completely tax free, plus I use my Roth for my more aggressive investing since my work 401k has pretty limited funds. So I use my Roth to invest in QQQ, AVUV, and SOXQ to where I leave my traditional work 401k in a pretty standard investment portfolio.

FitPay344

I know this is an old post and it’s been 2 weeks but I’ve been researching so much since I posted this. How does this look: VOO 90% SCMB 10% or 3 fund VOO 50%, SCHG 30%, and AVUV 20%? I’m trying to make it less complicated but I’m bad at selling off what I currently own even if I have gains. I don’t want to second guess myself.

simplehuman77

Some people swear by international, I’m on the side that it has underperformed for so long now that it’s a waste, but some people think it’s necessary. If that is something you think or want then a fund like VXUS is very popular. VOO and SCHG will have some overlap but that’s ok. I would say make VOO your main holding (40-50%) then yes SCHG if that’s the one you like and AVUV make up smaller portions of your 3 fund. Something like 50/30/20 or 60/20/20 or whatever. There’s no exact science or “best way”. Just stay consistent. Buy every week, every other whatever. Doesn’t matter if market is up or down. Just buy. You still have a long time to go so don’t ever panic and think of any downturn as a way to get additional funds on sale. Just stay consistent and always be buying on a regular schedule. Your future self will thank you.

FitPay344

I’m just circling back after researching a lot the past 2 weeks. For your suggestion is this 3 fund portfolio? I think I want to get into VOO, SCHG, and AVUV but I didn’t know if I was missing something else.

weealligator

Yes, I maxed 2023 out in one go because of the deadline and making the decision to get in the game just now. Someone else here also suggested keep doing what I’m doing but DCA. Set it up weekly and leave it alone, yeah? And yes to the Roth. My reported income for many consecutive years is well below federal poverty guidelines so this makes a lot of sense. I’m happy with the aggressiveness/risk of VOO/AVUV. Just gotta know how to leave it alone.

singlemaltwhisky

Currently adjusting my allocations and wanted feedback back. ~45% VOO (Vanguard S&P 500) ~ 15% SCHM (Schwab U.S. Mid-Cap) ~10% AVUV (Avantis U.S. Small-Cap Value) That leaves me another 30% I need to reinvest. Debating on an international ETF or increase the funds listed above. (Edit not all 30% international, maybe 10-15%) I have cash in a HYSA separate from the funds above. Looking for steady growth over next 15-20 yrs. Additional question. I have two 529 plans, 2 IRAs, 457 and a post tax brokerage fund. Would you balance each one basically the same. 529s have 13yrs until needed, IRAs at least 17yrs, 457 at least 15 but likely 20 yrs. There is also a 401K that has at least 22 yrs but I’m very limited in the investment options. Currently it’s in a target SSGA retire target fund.

iiSquatS

My Roth IRA is a bit more risk, my work 401k with most of my capital is safer and ‘typical’. My work 401k and pension will be enough to get by when I retire, so I ‘he to play around’ in my Roth. 65% qqq 25% AVUV and 10% SOXQ.

Fenderstratguy

Paul Merriman would agree with you - see his 2 fund portfolio. Small cap value tilt theoretically should increase your returns over the long haul. Ben Felix and Rick Ferri also have a SCV tilt in their portfolios too. - How To Money Podcast #734 – Turning Thousands Into Millions with Paul Merriman. Excellent discussion of 2 fund portfolio: TDF and a tilt to SCV (AVUV is the best) – at 10-20-50%. This will give an additional 2% gain in the long run, and SCV runs counter to S&P500 during large drops. - Paul Merriman’s 2-fund strategy using SCV https://www.paulmerriman.com/2-funds-for-life-update-2023#gsc.tab=0

flice_water

I’m also a big fan of AVUV and also hold a 20% position since I discovered it last March.

AP9384629344432

Does anyone happen to know if geopolitical conflict tends to be bullish or bearish global steel prices? (Not a sarcastic question) Does the increase in military spending or supply constraints outweigh any immediate depressing effect on non-military spending? -- Today's buys: 3 shares of AVDV, 2 shares of AVUV, $250 of VXUS, and because it's been a while (June 2023), I bought 1 share of XOM as a hedge and in case I'm wrong about my bearishness on oil.

xRy951

I'd recommend looking into small caps (example - AVUV), internationals (example - VXUS), if you're willing to take a risk look into semiconductor ETFs (example SMH) or cybersecurity etfs, etc etc. Everyone has their own preference of what they like so its hard to give an exact one ETF to pair, but those are what people commonly pair VOO with, hope this helps.

Dougnifico

People know and trust Vanguard. Vanguard funds are generally used as the example or default funds for whatever classification is being talked about. Like if I'm talking about small-cap value, VBR would be the kind of default fund. This is despite AVUV likely being a better bet. VBR has been around, is well known, and is trusted.

Known-Jacket-8995

Yeah that does make sense. I just like the idea of the passive income from the dividends with SCHD. Would it make more sense to hold VOO, AVUX, and AVUV. Majority being VOO and maybe 10-15% into AVUV due to the higher risk? What percentage for AVUX? I appreciate your feedback

BearDown8910

50/30/20 VOO AVUV vxus

Known-Jacket-8995

I think I’m going to invest 10% into AVUV and 15-20% into SCHD. Thoughts? I like the exposure into the small cap.

zendaddy76

AVUV and VXUS at 5-10%. Maybe a little VGT or VOOG since you’re young.

3hunna___

A lot of people can add more information on this. But in general, people on here seem to like AVUV. I think small cap is worth diversifying into, but I’d consider it higher risk

MJinMN

AVUV for small-cap value

Richleeson

VTI is more diversified, but i wanted to go for the large caps(s&p500) and then diversify a bit by adding in the small caps with AVUV and international with VXUS. This is just what im comfortable with and happy to sit on for 20+ years, not an expert by any means.

RedToolsRCool

Each brokerage is different. Fidelity allows you to set ETF's or mutual funds as auto recurring investments, so you can auto-buy either one at Fidelity. I have a ROTH account at Fidelity and have it set to auto buy a mix of funds each week, including VOO, AVUV, SCHD, etc.. set it and forget it.

ChemicalBonus5853

I bet on the S&P as usual and in small cap value, so I have AVUV, AVDV and DGS. Besides the usual large cap ETFs and bonds.

slippymcdumpsalot42

I’d keep 3-6 months expenses in cash, liquidate those bonds and get into some stock ETFs. I would suggest VTI, AVUV, maybe some QQQM. Buy as much as you can for the next 15 years, then take a look at bonds again. If you absolutely need to buy individual stocks, keep it small. Like less than 5% total. Leverage your age and working years to pursue growth. When you get to retirement, lock those gains into bonds

Richleeson

Ive currently settled with: 70% VOO(S&P500), 20% VXUS(international), 10% AVUV(US small cap). Purchase once per month.

CapC

Hi, looking for feedback on my portfolio. These are my current allocations. I am considering adding BTC somewhere, not sure if I will put it in IRA or cash acct. I'm 38 and have reached a point where I'm not sure what to take for next steps. My only debt is my mortgage. My 401k and IRA are capped annually. I have been dumping all other savings (aside from a static emergency fund and short term savings) into SWPPX. I'm hoping someone can critique my current allocations and provide feedback. I'm also looking for advice on options to consider for my non tax advantaged investments. Non tax advantaged accts: SWPPX. I also have some random shares from cash holiday gifts and the like (msft, appl, nvda, cat, cost). I've never sold anything and owned all of these for several years. Not really sure how to manage taxes if I were to sell and reinvest for diversification or if its a good idea. Roth IRA: I take earnings and rebalance this based on my personal investment plan. 10% NVDA 5% CRWD 5% NLY 25% QQQM 50% AVUV. 401K (roth/traditional 50/50): This is rebalanced annually. 60% DOXGX (DODGX) 40% TRBCX

zUcCc_

AVUV is your answer

superballlzach

Second the suggestion of opening an IRA. At your income, you should definitely consider the pros/cons of traditional vs backdoor Roth. Personally, I would still pick Roth just to diversify your assets in a sense by having more control over your taxable income in retirement. Plus no RMDs if you want to leave it to your children. As long as you have 3-6 months of expenses in cash, I would max that IRA and put whatever else you can into brokerage. Being young, you can afford to be pretty aggressive. VGT is a great option, but look into QQQM as well. It’s a little more diversified than VGT, but either should outperform VOO. Another one I like is AVUV, which is a tilt to small market cap companies that are deemed undervalued. If you want to get cute, put 5% of your investments into a bitcoin ETF like FBTC in that Roth IRA.