My Portfolio

masonic

aroominyork said:

masonic said: Underperformance is to be expected with SCV during bull markets, and we've been in a bull market, except for some brief spells, for most of the last 20 years. It has tended to generate more consistent returns under varying market conditions, but will not compete with growth/momentum during the good times. But it is still a high risk proposition with a fair loss potential, so more a diversifier within equities than a defensive holding. It's one of the holdings in the Weird Portfolio, which advocates 20% of each of its 5 constituents (40% small caps overall) - a little too rich for me.

I expect you are aware of Monevaor's recent articles on small cap value (including https://monevator.com/small-value/ for members). He shows that small cap value has beaten the market over the recent bull period. 

I'm not aware of the paywalled stuff as I'm not a subscriber, but I did peruse https://monevator.com/do-the-risk-factors-beat-the-market/ where the US data was quite different and even the global data doesn't seem to resemble your table. The 5 year data includes the 2022-2024 period where markets were trading sideways, and of course this year's turbulence, so perhaps that explains that.

I would seriously question the broad market returns data of 4.3, 5.1 and 4.9%, unless it's supposed to be inflation adjusted.

US data:

Global data:

aroominyork

Cus said:

What's the difference between small cap and small value above in definition? Where is the small cap value numbers please?

Small cap value is the second row 'small value' in the above table. A value stock, defined in the Monevator link I gave, "is apparently undervalued in comparison to the company’s underlying worth, as measured by valuation metrics like book value." To get an idea of how a fund comprises value, growth and blend (between the two) you can look at the 'stock style' in the 'portfolio' tab of Morningstar. For example, this is the style allocation for Vanguard's Global Small-Cap Index Fund:

By contrast, this is Aventis Global Small Cap Value ETF (AVSG):

Hoenir

chiang_mai said:

Hoenir said:

There are a number of valid reasons why he is selling, including tax avoidance, regulatory and the fact that some of his investments have reached fair value. 

Berkshire Hathaway at it's core is an insurance company. Not a personal plaything.

I'm not sure what that has to do with anything, only 25% of BH profits were derived from its insurance business.

https://finmasters.com/berkshire-hathaway-subsidiaries/

Merely stated a fact . BH must rank as the most misunderstood stock on social media. Shows how little due diligence investors actually do. No great surprise many eventually get their fingers severely burnt. 

chiang_mai

masonic said:

Indeed it is very large, and it is large for a reason, companies flock to it from all over the world. This means there are many options available to dilute the things that are making you shy away from it. The S&P400 includes companies with a market cap between $2-30bn, many of which would qualify for inclusion in the FTSE 100 if listed on the London Stock Exchange. You have practically no exposure to those, and relatively more exposure to the Mag7 as a result. There are also minimum volatility or value factor funds available that could be paired with a cap-weighted tracker to increase your exposure without increasing your concentration in the parts of the market you consider undesirable. An equal weight fund is also an option, albeit not one I'd consider.

Unfortunately my platform provider, HL, doesn't have much in the way of managed S&P400 funds, which leaves me with the possibility of an ETF tracker only. I have held VG Global SC's previously but the volatility makes me very nervous and has caused flesh wounds previously. Perhaps 4% of an ETF is the better solution, which would increase my US holdings but not significantly.

I was contemplating downsizing Smartgarp UK in favour of a UK All Shares tracker. But then I decided against the idea because small and medium caps are already well represented within the SG fund. And finally, I've looked again at the risk of the SG EU fund, which at a 7% allocation seems very reasonable to me, especially when balances against the large cap Fid EU Divi fund.

I'm still sleeping well at nights but Japan is causing the occasional bad dream! 

Bostonerimus1

chiang_mai said:

masonic said:

Indeed it is very large, and it is large for a reason, companies flock to it from all over the world. This means there are many options available to dilute the things that are making you shy away from it. The S&P400 includes companies with a market cap between $2-30bn, many of which would qualify for inclusion in the FTSE 100 if listed on the London Stock Exchange. You have practically no exposure to those, and relatively more exposure to the Mag7 as a result. There are also minimum volatility or value factor funds available that could be paired with a cap-weighted tracker to increase your exposure without increasing your concentration in the parts of the market you consider undesirable. An equal weight fund is also an option, albeit not one I'd consider.

Unfortunately my platform provider, HL, doesn't have much in the way of managed S&P400 funds, which leaves me with the possibility of an ETF tracker only. I have held VG Global SC's previously but the volatility makes me very nervous and has caused flesh wounds previously. Perhaps 4% of an ETF is the better solution, which would increase my US holdings but not significantly.

I was contemplating downsizing Smartgarp UK in favour of a UK All Shares tracker. But then I decided against the idea because small and medium caps are already well represented within the SG fund. And finally, I've looked again at the risk of the SG EU fund, which at a 7% allocation seems very reasonable to me, especially when balances against the large cap Fid EU Divi fund.

I'm still sleeping well at nights but Japan is causing the occasional bad dream! 

IMO such thoughts about the minucia of asset allocation are a waste of time and are positively bad for the vast majority of investors...God (Jack Bogle) invented the broad index fund and Wellington and F&C Investment Trust brought diversified portfolios to the retail investor so that we can drink Margaritas rather than looking an P&L statements or geopolitical crystal balls. Portfolios are like spots, people will pick at them when they are best left alone.

chiang_mai

Bostonerimus1 said:

chiang_mai said:

masonic said:

Indeed it is very large, and it is large for a reason, companies flock to it from all over the world. This means there are many options available to dilute the things that are making you shy away from it. The S&P400 includes companies with a market cap between $2-30bn, many of which would qualify for inclusion in the FTSE 100 if listed on the London Stock Exchange. You have practically no exposure to those, and relatively more exposure to the Mag7 as a result. There are also minimum volatility or value factor funds available that could be paired with a cap-weighted tracker to increase your exposure without increasing your concentration in the parts of the market you consider undesirable. An equal weight fund is also an option, albeit not one I'd consider.

Unfortunately my platform provider, HL, doesn't have much in the way of managed S&P400 funds, which leaves me with the possibility of an ETF tracker only. I have held VG Global SC's previously but the volatility makes me very nervous and has caused flesh wounds previously. Perhaps 4% of an ETF is the better solution, which would increase my US holdings but not significantly.

I was contemplating downsizing Smartgarp UK in favour of a UK All Shares tracker. But then I decided against the idea because small and medium caps are already well represented within the SG fund. And finally, I've looked again at the risk of the SG EU fund, which at a 7% allocation seems very reasonable to me, especially when balances against the large cap Fid EU Divi fund.

I'm still sleeping well at nights but Japan is causing the occasional bad dream! 

IMO such thoughts about the minucia of asset allocation are a waste of time and are positively bad for the vast majority of investors...God (Jack Bogle) invented the broad index fund and Wellington and F&C Investment Trust brought diversified portfolios to the retail investor so that we can drink Margaritas rather than looking an P&L statements or geopolitical crystal balls. Portfolios and like spots, people will pick at them when we all know they are best left alone.

There are two aspects to this: First is that this is how we learn, at least, its how I learn and being t-total, I need something useful to fill my time. Second is that, with all due respect to "god", his funds don't usually perform to the degree that some of the Smartgarp funds have, nor to the degree the RL Select Fund had (another lucrative find that paid massive dividends).   Such finds don't last forever but they are very rewarding when they are found and whilst they last. Life after all should be exciting and rewarding. 

Hoenir

Bostonerimus1 said:

chiang_mai said:

masonic said:

Indeed it is very large, and it is large for a reason, companies flock to it from all over the world. This means there are many options available to dilute the things that are making you shy away from it. The S&P400 includes companies with a market cap between $2-30bn, many of which would qualify for inclusion in the FTSE 100 if listed on the London Stock Exchange. You have practically no exposure to those, and relatively more exposure to the Mag7 as a result. There are also minimum volatility or value factor funds available that could be paired with a cap-weighted tracker to increase your exposure without increasing your concentration in the parts of the market you consider undesirable. An equal weight fund is also an option, albeit not one I'd consider.

Unfortunately my platform provider, HL, doesn't have much in the way of managed S&P400 funds, which leaves me with the possibility of an ETF tracker only. I have held VG Global SC's previously but the volatility makes me very nervous and has caused flesh wounds previously. Perhaps 4% of an ETF is the better solution, which would increase my US holdings but not significantly.

I was contemplating downsizing Smartgarp UK in favour of a UK All Shares tracker. But then I decided against the idea because small and medium caps are already well represented within the SG fund. And finally, I've looked again at the risk of the SG EU fund, which at a 7% allocation seems very reasonable to me, especially when balances against the large cap Fid EU Divi fund.

I'm still sleeping well at nights but Japan is causing the occasional bad dream! 

..God (Jack Bogle) invented the broad index fund 

The original concept came from from a research paper many years earlier.  Like many other people started off in investment boutiques/hedge funds that ultimately didn't find the Holy Grail of investing. 

Bostonerimus1

Hoenir said:

Bostonerimus1 said:

chiang_mai said:

masonic said:

Indeed it is very large, and it is large for a reason, companies flock to it from all over the world. This means there are many options available to dilute the things that are making you shy away from it. The S&P400 includes companies with a market cap between $2-30bn, many of which would qualify for inclusion in the FTSE 100 if listed on the London Stock Exchange. You have practically no exposure to those, and relatively more exposure to the Mag7 as a result. There are also minimum volatility or value factor funds available that could be paired with a cap-weighted tracker to increase your exposure without increasing your concentration in the parts of the market you consider undesirable. An equal weight fund is also an option, albeit not one I'd consider.

Unfortunately my platform provider, HL, doesn't have much in the way of managed S&P400 funds, which leaves me with the possibility of an ETF tracker only. I have held VG Global SC's previously but the volatility makes me very nervous and has caused flesh wounds previously. Perhaps 4% of an ETF is the better solution, which would increase my US holdings but not significantly.

I was contemplating downsizing Smartgarp UK in favour of a UK All Shares tracker. But then I decided against the idea because small and medium caps are already well represented within the SG fund. And finally, I've looked again at the risk of the SG EU fund, which at a 7% allocation seems very reasonable to me, especially when balances against the large cap Fid EU Divi fund.

I'm still sleeping well at nights but Japan is causing the occasional bad dream! 

..God (Jack Bogle) invented the broad index fund 

The original concept came from from a research paper many years earlier.  Like many other people started off in investment boutiques/hedge funds that ultimately didn't find the Holy Grail of investing. 

We definitely do stand on others' shoulders. Bogle's graduating thesis analyzed the performance of mutual funds and while this was not an important academic paper at the time it does show how he was thinking. Efficient market theory and Samuelson's 1974 paper where he pointed out the consistent underperformance of managed mutual funds were obvious influences on Bogle's creation of the first retail index fund in 1976. He was widely ridiculed for this.

Bostonerimus1

chiang_mai said:

Bostonerimus1 said:

chiang_mai said:

masonic said:

Indeed it is very large, and it is large for a reason, companies flock to it from all over the world. This means there are many options available to dilute the things that are making you shy away from it. The S&P400 includes companies with a market cap between $2-30bn, many of which would qualify for inclusion in the FTSE 100 if listed on the London Stock Exchange. You have practically no exposure to those, and relatively more exposure to the Mag7 as a result. There are also minimum volatility or value factor funds available that could be paired with a cap-weighted tracker to increase your exposure without increasing your concentration in the parts of the market you consider undesirable. An equal weight fund is also an option, albeit not one I'd consider.

Unfortunately my platform provider, HL, doesn't have much in the way of managed S&P400 funds, which leaves me with the possibility of an ETF tracker only. I have held VG Global SC's previously but the volatility makes me very nervous and has caused flesh wounds previously. Perhaps 4% of an ETF is the better solution, which would increase my US holdings but not significantly.

I was contemplating downsizing Smartgarp UK in favour of a UK All Shares tracker. But then I decided against the idea because small and medium caps are already well represented within the SG fund. And finally, I've looked again at the risk of the SG EU fund, which at a 7% allocation seems very reasonable to me, especially when balances against the large cap Fid EU Divi fund.

I'm still sleeping well at nights but Japan is causing the occasional bad dream! 

IMO such thoughts about the minucia of asset allocation are a waste of time and are positively bad for the vast majority of investors...God (Jack Bogle) invented the broad index fund and Wellington and F&C Investment Trust brought diversified portfolios to the retail investor so that we can drink Margaritas rather than looking an P&L statements or geopolitical crystal balls. Portfolios and like spots, people will pick at them when we all know they are best left alone.

There are two aspects to this: First is that this is how we learn, at least, its how I learn and being t-total, I need something useful to fill my time. Second is that, with all due respect to "god", his funds don't usually perform to the degree that some of the Smartgarp funds have, nor to the degree the RL Select Fund had (another lucrative find that paid massive dividends).   Such finds don't last forever but they are very rewarding when they are found and whilst they last. Life after all should be exciting and rewarding. 

You said somewhere in this thread that you didn't necessarily need the greatest performance, just enough to meet your investing requirements. That's one of the keys to successful investing, IMO, as it implies a closed loop understanding of risk and reward and your personal finances. We all have our own investing styles, but I'm of the opinion that fine detail asset allocation and fund comparisons are mostly navel gazing and we just delude ourselves that they have any meaning taken over a reasonable time span. It's dangerous for most investors to get swept up in this as they end up over managing their money when they could be doing something useful like reading a novel.

aroominyork

Bostonerimus1 said:

chiang_mai said:

Bostonerimus1 said:

chiang_mai said:

masonic said:

Indeed it is very large, and it is large for a reason, companies flock to it from all over the world. This means there are many options available to dilute the things that are making you shy away from it. The S&P400 includes companies with a market cap between $2-30bn, many of which would qualify for inclusion in the FTSE 100 if listed on the London Stock Exchange. You have practically no exposure to those, and relatively more exposure to the Mag7 as a result. There are also minimum volatility or value factor funds available that could be paired with a cap-weighted tracker to increase your exposure without increasing your concentration in the parts of the market you consider undesirable. An equal weight fund is also an option, albeit not one I'd consider.

Unfortunately my platform provider, HL, doesn't have much in the way of managed S&P400 funds, which leaves me with the possibility of an ETF tracker only. I have held VG Global SC's previously but the volatility makes me very nervous and has caused flesh wounds previously. Perhaps 4% of an ETF is the better solution, which would increase my US holdings but not significantly.

I was contemplating downsizing Smartgarp UK in favour of a UK All Shares tracker. But then I decided against the idea because small and medium caps are already well represented within the SG fund. And finally, I've looked again at the risk of the SG EU fund, which at a 7% allocation seems very reasonable to me, especially when balances against the large cap Fid EU Divi fund.

I'm still sleeping well at nights but Japan is causing the occasional bad dream! 

IMO such thoughts about the minucia of asset allocation are a waste of time and are positively bad for the vast majority of investors...God (Jack Bogle) invented the broad index fund and Wellington and F&C Investment Trust brought diversified portfolios to the retail investor so that we can drink Margaritas rather than looking an P&L statements or geopolitical crystal balls. Portfolios and like spots, people will pick at them when we all know they are best left alone.

There are two aspects to this: First is that this is how we learn, at least, its how I learn and being t-total, I need something useful to fill my time. Second is that, with all due respect to "god", his funds don't usually perform to the degree that some of the Smartgarp funds have, nor to the degree the RL Select Fund had (another lucrative find that paid massive dividends).   Such finds don't last forever but they are very rewarding when they are found and whilst they last. Life after all should be exciting and rewarding. 

You said somewhere in this thread that you didn't necessarily need the greatest performance, just enough to meet your investing requirements. That's one of the keys to successful investing, IMO, as it implies aclosed loop understanding of risk and reward and your personal finances. We all have our own investing styles, but I'm of the opinion that fine detail asset allocation and fund comparisons are mostly navel gazing and we just delude ourselves that they have any meaning taken over a reasonable time span. It's dangerous for most investors to get swept up in this as they end up over managing their money when they could be doing something useful like reading a novel.

Those are wise words though, so long as they are borne in mind, they don’t need to be followed to the letter. Investing can be a source of enjoyment and the analysis keeps an ageing brain active. A pure index approach means you don’t get to enjoy the cut and thrust of a little dabbling. 

The guy who cuts my hair started investing recently to get a pension going, using ETFs for World, EM and S&P (so far so reasonable) but with about 60% of his money in Nvidia. He decided Nvidia would reach $180. When Nvidia fell he could barely sleep. It then recovered and he was in profit but still checking it obsessively. I nagged him to sell, telling him to keep 20% in Nvidia if he wanted. He finally did this a month or so ago. Of course it has since been on a bull run but he doesn’t hold it against me (maybe I should hold that judgement until next week’s haircut…) cos I said I had no idea what would happen to the price but the worst thing that could happen was it hit $180, because then he’s think he had the golden touch and things would only go badly from there. Anyway, my point is that suggesting he kept 20% in Nvidia helped him swallow the medicine.