1) Let's try to avoid the "if you exclude a large part of the sample, then I'm right" arguments. It just gets circular. 20 years? The tilted portfolio outperforms simple TSM over the past 5 years (https://testfol.io/?s=l7xWFuzZiBb), and we can use a fund with no advisor fees. And we can speculate about how SCV will do once tech stops over-performing.Portfolios overweighting SCV have underperformed simple TSM portfolios over the past 20 years. This covers pretty much everyone who's ever invested in them. And of course that excludes the advisor fee layer in the case of DFA funds. https://testfol.io/?s=gco9vycXq5NPortfolios containing SCV overall perform better than those without it - this has been true for decades and is true recently. The reason this works is because most people don't, and won't, do it, because people can't stand tracking error.
2) Of course, no one holds 100% VTI. How did a tilted globally-diversified portfolio do, even over the past 20 years? https://testfol.io/?s=isd7V7LUq1n
There's no real point in back-and-forth arguing about whether you can find a period of time where you don't think a premiums exists. People can always do their own research.
For sure. One of Avantis' newest offerings, after all, is essentially a factor-tilted large growth fund (AVUQ). The more I read/research, the less I expect "small" to provide a return premium (as opposed to a diversification benefit) but still think factor tilting overall is of utility.I remember being asked on the forum why a certain Avantis fund was invested heavily in Growth stocks, many of which were relatively cheap as Large Growth/High Tech corrected, this didn't last very long though, maybe a year or so. But yes, I noticed this too and could see that the definition of Value can be stretched beyond what Value practitioners had traditionally held. So it is possible that factor funds might experience what seems to be style drift.
Statistics: Posted by breakfastinbed — Sat Nov 08, 2025 10:31 pm — Replies 22 — Views 1892