Author Topic: VTWV vs other small value indexes  (Read 3835 times)

markbike528CBX

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VTWV vs other small value indexes
« on: December 26, 2015, 12:03:26 AM »
Problem:
   I have cash sitting in a ROTH IRA.   Since I (mostly ) can't get to it for some years, I'd rather be invested in something, preferably a small/micro value index.

I like Vanguard products, and have VSIAX Vanguard Small-Cap Val Idx Admiral at Vanguard expense ratio 0.09%. 

Options:  VTWV (Vanguard Russell 2000 Value ETF) or IWM iShares Russell 2000 ETF, both of which have expense ratios about 0.20%
Why  not just more VSIAX/VBR? The VSIAX average market cap 3.1 billion vs VTWV Average market cap of 1.6 billion

I was ready to pull the trigger then I got worried that 28-44% of VTWV is "financials", a sector that I'm not sure about.
Also  if you do the "compare" at vanguard, the 28% financials, if you do the fund snapshot,
https://personal.vanguard.com/us/funds/snapshot?FundId=3352&FundIntExt=INT
 you get 44% financials ( maybe a combo of 28% financials, 16% real estate).  hmmmmm...

This Roth account is where I've been doing my microcap stuff.   I don't have the  time/energy for individual random stock picking, so I thought I'd simplify.
What I'd really like is a low cost index microcap fund, but I haven't found one yet.

Really over-thinking this, but that's what I do.

Question:
VTWV  IWM  VBR or other?  Or just chill out and flip a coin :-)

matchewed

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Re: VTWV vs other small value indexes
« Reply #1 on: December 26, 2015, 05:48:54 AM »
Or option 3. Craft an asset allocation. Write an investment policy statement. Invest accordingly while considering tax efficiency.

That way you don't ask random internet people what to invest in. You look at your investment policy statement and that tells you what to invest in. Less time spent over thinking something which probably won't impact you greatly but takes up too much time seems like a win to me.

Tyler

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Re: VTWV vs other small value indexes
« Reply #2 on: December 26, 2015, 08:20:16 AM »
What I'd really like is a low cost index microcap fund, but I haven't found one yet.

BRSIX. The ER is a little high, but it's the closest I've seen to what you're looking for.

markbike528CBX

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Re: VTWV vs other small value indexes
« Reply #3 on: December 26, 2015, 10:40:42 AM »
matchwed:  This question is part of editing my IPS, which I call "The Plan".  I have a lot of large cap S&P 500 and VTSAX dollars, and need to shift the balance to smaller caps.  VISAX is ok but only goes so far.
Asking random internet people gets fresh input into my thinking loop, and hopefully will enable a breakout of the loop.

Tyler:  Thanks for the suggestion!  ER is high, but a CRSP 10 index is exactly what I was looking for.

MustacheAndaHalf

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Re: VTWV vs other small value indexes
« Reply #4 on: December 26, 2015, 06:48:32 PM »
I looked up the following on morningstar.com.  If you're willing to drop from 100% micro-cap to 84% micro cap, you can both save 0.42% expense ratio and gain 15% more small/value exposure.  Here's the data from morningstar's website:

Bridgeway Ultra Small Company Market Fund  (BRSIX)
-> fee of 0.78% gets you 100% micro cap, but only 44% small/value (rest is blend or growth)

Guggenheim S&P SmallCap 600 Pure Value ETF  (RZV)
-> fee of 0.36% gets you 84% micro cap, and 59% small/value

Vanguard Russell 2000 Value Index Fund ETF Shares (VTWV)
-> fee of 0.20% gets you 37% micro cap, and 43% small/value

iShares Russell 2000 ETF (IWM)
-> fee of 0.20% gets you 32% micro cap, 25% small/value, and 10% mid cap (!)

Vanguard Small-Cap Value Index Fund ETF Shares  (VBR)
-> fee of 0.09% gets you 11% micro cap, 31% small/value, and 38% mid cap (and 1% large cap!)