Author Topic: Value Investing within a Health Savings Account  (Read 1382 times)

talltexan

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Value Investing within a Health Savings Account
« on: October 16, 2017, 07:23:36 AM »
So I'm trying to use parts of my HSA for investing long-term. There is a SP500 fund available (which I am in now), but I'm hoping to juice my returns a little bit by including a Value fund.

One possibility is the Vanguard Equity Income Fund (VEIPX).

Another choice is the Blackrock Equity Dividend Fund (MDDVX).

Looking for any opinion/experience with these among mustachians.

Radagast

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Re: Value Investing within a Health Savings Account
« Reply #1 on: October 17, 2017, 06:28:46 PM »
No experience, but I will opinionate. The BlackRock fund has an expense ratio of 0.97%, which makes me want to stay away even if the load is waived.

Comapring factors, fundamentals, and performance at portfoliovisualizer and morningstar make the BlackRock fund look very similar but ever so slightly better in every way except one: it has very slightly trailed the Vanguard fund, probably because of the high expenses. The expense is more guaranteed so I'd go with that.

Some people say dividends are overbought by people chasing yield. If that is correct you might not want to use dividends as a proxy for value and instead go with a traditional and lower expense value fund in a different account, such as VTV, IUSV, or even FNDX (which seems to avoid dividends). Or similar mutual funds.

talltexan

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Re: Value Investing within a Health Savings Account
« Reply #2 on: October 20, 2017, 08:19:01 AM »
Indeed I have ample helpings of VTSAX in my main retirement account.

Part of why I've tried to focus on value in the Health Savings Account is that I'm trying to use it more as a long-term tax shelter...money that would be left alone for 28 years, enough time for the "value premium" to have effect. This is enough time that the extra 1% value premium (agreed, this is subject to expense ratios) would really move the needle.

See references for example here:

http://www.etf.com/sections/index-investor-corner/swedroe-1?nopaging=1

or Paul Merriman's "all value" portfolio described here

http://paulmerriman.com/ultimate-buy-hold-strategy-2017/

BTDretire

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Re: Value Investing within a Health Savings Account
« Reply #3 on: October 20, 2017, 02:02:24 PM »
So I'm trying to use parts of my HSA for investing long-term. There is a SP500 fund available (which I am in now), but I'm hoping to juice my returns a little bit by including a Value fund.

One possibility is the Vanguard Equity Income Fund (VEIPX).

Another choice is the Blackrock Equity Dividend Fund (MDDVX).

Looking for any opinion/experience with these among mustachians.

 Where is your HSA that you have these choices?

talltexan

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Re: Value Investing within a Health Savings Account
« Reply #4 on: October 23, 2017, 08:59:28 AM »
My HSA is with Optum Bank.