Thanks for your information and dedication to educating us about investing. I like the TH-cam format! It gives me another way to take part in your information. I recently was on a long drive and listened to several podcasts, but the TH-cam format is good for me at home with my Chrome Cast device.
Hello Paul, wouldn't the current valuations on large cap growth companies like Tesla and Amazon in combination with low interest rates create a great opportunity to diversify away from market cap weighted index funds like VTI, and into small cap value? I would think that market cap weighted indexes provides excessive exposure to large cap growth.
Thanks Paul, which ETF are u taking in consideration for these returns? As I think the real challange is to find products which is able to target those SCV properly
This video was released 5 years ago. Since then the S&P gained 87.71%, an average of 17.5% per year. Where are those experts predicting the S&P will return 6% going forward? Oh ya, they’re still making those predictions.
I only know 2 small cap value related UCITS ETFs: SPDR msci usa small cap value weighted SPDR msci europe small cap value weighted I don't know how far are these from a pure small cap value ETF as these still contain small cap growth junk. I would prefer to have something like MSCI ACWI Small Cap value.
@@mgoogyi I recently saw a comparison on a Dutch subreddit and the conclusion was that those ETF's have decent factor exposure (not great, but far better than others). Biggest downsides seem to be the cost (compared to the general all world ETFs), the small size of the funds (like 20m assets each) and the overweighting to the US/EU you get when you buy them. IIRC the expected outperformance (based on factors) for SPRX was ~1% and ZPRV ~2%.
@@danceartist8203 "overweighting to the US/EU " For me that's the biggest downside. I can't trade for free so I just want to have one etf for small cap value.
@@mgoogyi Yeah it's honestly a pain. If you are investing large enough sums you can avoid the PRIIPS by buying stocks through in/at the money options through Lynx or IB. However, even then it is hard to find a good fund. This same method is used by many Dutchies to buy VTI/VXUS.
oh well, I just got done reading a bunch of boglehead material and watching Jack Bogle videos and was ready to throw it all in vti, now im being told that past performance demonstrates a need to take on more risk and invest in small caps as a sure fire way to beat the market, long term. So confused 😞
Bogle himself agreed that there was a premium with small cap value. Difference is that bogles philosophy is all about which approach can be sustained. The best portfolio is the one you stick with :)
I have about 13% of my portfolio in small cap value. I am working to get that up to my 15% target. Small cap value has underperformed for too long. It is time to overperform in the next decade.
@@investingwitha-aron8055 No doubt, I'm with you about 15% SCV. I would just be careful in word choice. The way you worded your first post reads a little worrisome. There is no guarantee that SCV will "overperform" and if it does we won't know when the "time" is.
IMO it has a value tilt already. I still buy a 600 value fund along with a 600 fund but the difference isn’t near as much as you’d see from other small cap indexes. Beware though, a 600 value fund, while still cheap, costs about 2.5-3x the amount as the standard 600.
Thanks for your information and dedication to educating us about investing. I like the TH-cam format! It gives me another way to take part in your information. I recently was on a long drive and listened to several podcasts, but the TH-cam format is good for me at home with my Chrome Cast device.
If i was in my early 20's id let it all ride in small cap value for atleast a decade or so then diversify into other classes.
My take away; expect variance and wild swings but should perform best in the long run.
Only a few comments, 10k views. SCV is still underallocated, and this is an example. Most people aren't even aware of this.
SCV funds are at an all time high right now, they're over-valued imo.
Which index are you using to calculate returns for SCV?
I think the video mentions some small cap value index from dimensional
Hello Paul, wouldn't the current valuations on large cap growth companies like Tesla and Amazon in combination with low interest rates create a great opportunity to diversify away from market cap weighted index funds like VTI, and into small cap value? I would think that market cap weighted indexes provides excessive exposure to large cap growth.
Why not do a video comparing growth to value over the long term?
Thanks Paul, which ETF are u taking in consideration for these returns? As I think the real challange is to find products which is able to target those SCV properly
This video was released 5 years ago. Since then the S&P gained 87.71%, an average of 17.5% per year. Where are those experts predicting the S&P will return 6% going forward? Oh ya, they’re still making those predictions.
Thanks for information. Why do you avoid mid-caps (both blend and value)?
Great information! Thanks Mr. Merriman
How can we capture small cap value premium through ETFs as European retail investors?
I only know 2 small cap value related UCITS ETFs:
SPDR msci usa small cap value weighted
SPDR msci europe small cap value weighted
I don't know how far are these from a pure small cap value ETF as these still contain small cap growth junk.
I would prefer to have something like MSCI ACWI Small Cap value.
@@mgoogyi I recently saw a comparison on a Dutch subreddit and the conclusion was that those ETF's have decent factor exposure (not great, but far better than others). Biggest downsides seem to be the cost (compared to the general all world ETFs), the small size of the funds (like 20m assets each) and the overweighting to the US/EU you get when you buy them. IIRC the expected outperformance (based on factors) for SPRX was ~1% and ZPRV ~2%.
@@danceartist8203 "overweighting to the US/EU "
For me that's the biggest downside.
I can't trade for free so I just want to have one etf for small cap value.
@@mgoogyi Yeah it's honestly a pain. If you are investing large enough sums you can avoid the PRIIPS by buying stocks through in/at the money options through Lynx or IB. However, even then it is hard to find a good fund.
This same method is used by many Dutchies to buy VTI/VXUS.
@@danceartist8203 Could you please share that Dutch subreddit discussion's link here?
oh well, I just got done reading a bunch of boglehead material and watching Jack Bogle videos and was ready to throw it all in vti, now im being told that past performance demonstrates a need to take on more risk and invest in small caps as a sure fire way to beat the market, long term. So confused 😞
You gotta make an assumption about the future and take your gamble. Either direction is better than having no skin in the game at all.
Bogle himself agreed that there was a premium with small cap value. Difference is that bogles philosophy is all about which approach can be sustained. The best portfolio is the one you stick with :)
Thanks for all your educational videos.
How does IJR AND the S&P600 compare to small cap value?
Paul, how does the S&P600 blend compare to small cap value?
Very helpful information. Thank you
I have about 13% of my portfolio in small cap value. I am working to get that up to my 15% target. Small cap value has underperformed for too long. It is time to overperform in the next decade.
gambler's fallacy
@@muffemod Investing responsibly is not gambling.
@@investingwitha-aron8055 No doubt, I'm with you about 15% SCV. I would just be careful in word choice. The way you worded your first post reads a little worrisome. There is no guarantee that SCV will "overperform" and if it does we won't know when the "time" is.
@@investingwitha-aron8055calling it responsible investing doesn't justify it as responsible investing
Jeez still waiting
what's the deal with your over enunciation & chuckles when there is nothing even remotely funny?
Your comment is so unnecessary and so rude.
What is the deal with your dumb question?
I find it entertaining and you know, personality filled!
Herb
Paul, how does the S&P600 blend compare to small cap value?
IMO it has a value tilt already. I still buy a 600 value fund along with a 600 fund but the difference isn’t near as much as you’d see from other small cap indexes. Beware though, a 600 value fund, while still cheap, costs about 2.5-3x the amount as the standard 600.