FIVA
Fidelity® International Value Factor ETF
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I like the overall theory but there are international value funds I like better than SCHY: VYMI, DFIV, FIVA, FIDI, FNDF, and IVLU. They do all have higher expenses but worth it IMO.
Hey quick Roth question yall. 2 years in I’m currently: 65% SPYM 25%SCHG 10% URNM (idk why I just saw green and said yeah) Planning to ditch URNM and diversify with some intl. Currently thinking: 55% SPYM 20% SCHG 15% FIVA 10% AVUV Does that sound like a reasonable readjustment or should I move some of those percentages. Since I’m younger (27) would it be better to go more “aggressive” and chase growth?
I recommend S&P 500, paired with a foreign equity funds like FENI, FIVA, or IDMO; and FNDE for emerging market. Foreign equity has done well this year, and if you select the right fund it’s worth having, I do not subscribe to the notion of an all world or all foreign equity fund like VXUS, it lacks strategy. Foreign equity needs some process, methodology, and thought behind it.
A lot of LCV is going to be heavy in FAANGS, NVIDIA, and so on. For example, I just looked at FDRR and the top 3 holdings are NVIDIA, Microsoft, and Apple. But others will be less so -- VTV has no tech stocks in its top 10 holdings. You should be able to see holdings on Morningstar. Ways to avoid: sector funds (industrials and energy seem to be doing well, check on FIDU and FUTY). International value is having a bang up year and has very little technology and certainly no FAANGS etc. You could look at FIVA, JIVE, DFIV, VYMI, or even small/mid cap international value such as AVDV or DISV,
ICOP for Copper Mining. IDMO, FIVA, FENI, FNDE for foreign equity. FBTC for Bitcoin. I’d mention my US holdings too but it’s pretty standard stuff. Never stop buying.
My rollover IRA does not benefit from weekly contributions like my Roth accounts do, no DCA. Like most of my holdings in the rollover, I was interested in high dividend ETFs that still perform decent. The largest holdings include FDVV and FIVA.
What would be the benefit of FIVA in rollover? The Risk level?
It absolutely makes sense to include non-US equity in a portfolio, you gotta diversify because you should never assume S&P always wins. My bigger gripe with VXUS is it holds every possible foreign stock, versus hand-selecting stocks with potential value and growth. I always recommend IDMO, FENI, or FIVA as they practice a methodology for stock selection and the performance shows it too.
IDMO is the best performing international ETF. I also like FENI and FIVA. All three of them have outperformed the popular VXUS.
May not be quite the answer you’re looking for, but for my Rollover IRA, which does not receive contributions like my Roth, I opted for value investing with high dividends. FDVV is a large value ETF but the top holdings include Apple, Nvidia, Microsoft, Broadcom, and JPM. For International in that account I use FIVA for international large value, and it too has some big names.
I didn’t want to sway your choices, they seem sensible. Since you want my opinion though, I don’t care for all-market funds because I have no desire to own thousands of junk or zombie stocks. I also don’t care for all world funds, because I want to control the allocation of US vs Foreign equity, plus there are some regions I may want more of and others I do not. For my Roth at present I am contributing 60% S&P 500 index, and 40% to FENI which is an actively managed foreign large blend of over 300 stocks. I may adjust that ratio in the future, or swap out a holding for another, whatever I want. For my Rollover IRA which does not get contributions, my foreign equity is divided mostly between three funds: FIVA is actively managed foreign large value with awesome dividends, FLIN for India equity because I’m bullish on their development, and FLCA for Canada equity because I see potential growth there. Bottom line, I like a little more control of allocation, and I’m a little more selective of indexes.
IDMO is a little more volatile, but no risk no reward. It’s been a really impressive international ETF the past 5 years. VXUS may be well diversified but the performance is a snore. Compare VXUS to IDMO, FENI, FIVA, and you’ll see how much better you can potentially do. I use FIVA in my Rollover IRA and I’m very happy with it.
S&P500 is fine for US equities, but no I don’t agree with ONLY doing that. Try to put at minimum 25% allocation to a non-US equity diversified ETF. I don’t know the Canadian equivalents, but I always recommend IDMO, FENI, or FIVA. Might wanna consider a small allocation to a BitCoin ETF as well. I don’t like crypto but if think it’s here to stay.
Individual stocks are always higher risk versus ETFs or mutual funds. AAPL is the only individual stock I have anymore, but I’ve owned it for many years. CRSP has some serious potential, but I grew impatient and sold it. If NVDA or MSFT have another big dip, I might buy some, but it’s kinda silly since they already exist in most index funds. Happy to give you some favorite ETFs though. IDMO is a beast for international, and I’m fond of FIVA as well. I have a small position for ICOP. I genuinely believe copper and copper mining are a smart investment in the coming decades. FSELX is volatile but otherwise a great mutual fund for semiconductors. I contribute a little every week to FBTC. I don’t like cryptocurrency, but sadly I think it’s here to stay. I won’t deny it, it’s performed very well.
Ok, that's a lot of words, largely pasted from Fidelity's site. But let's look at the possible risks you identify. One is "low adherence required to the underlying index"; but the tracking error for FIVA is almost the same as the tracking error of FTEC, Fidelity's single largest ETF that simply tracks the info tech sector. While their documents have a lot of disclaimers, I'm not seeing any evidence of a problem there. Your other criticism, about being vulnerable to "value traps" could be said for ANY "value" factor ETF unless you provide specific criticism of the methodology (which you didn't...). I'm glad you looked up the details, though.
Normally lists like this are meh, but a quick scan of FIVA is actually pretty interesting. Good find. Just gave me a couple hours od analysis to do
Swapped from growth etfs FINX, BOTZ, AIQ, LIT, CTEC, BTEK, BFTR and a couple convertible bond cefs. Into FBCV FMIL, FIVA. I wanted to try out the new actively managed ETFs figured a actively managed value focus would be a good choice to try out.