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Post by Deleted on Dec 3, 2022 20:40:22 GMT
No fee at Fido for Vanguard ETFs. $75 is for mutual funds. Just assumed ...... thanks |
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Post by retiredat48 on Dec 4, 2022 16:50:35 GMT
mozart522 , acksurf , @slooow , bizman ,...et al. I am time-challenged, but some replies and observations: --I own SCHD and VIG. I am not against anyone owning some of the other combination. And perhaps there are some even "more perfect" funds. --The dividend growth rate anomaly I would have to explore more. But what I see: Schd owns things like Verizon and Valero. For example, I do not see Verizon (a current high yielder) as having much growth in the future,and a real risk of decline in business. Ditto valero and gas usage. VIG does not own these...but owns things that have a definite more positive growth outlook, maybe also share buybacks, earnings growth. The yield less but the overall business earnings higher, and growing. I do not think we should look backwards at returns for VIG versus other funds cited. Rather, what about going forward? I see VIG companies as having great pricing power to raise prices...or other wise benefit from inflation. They will keep up. Such as: VIG owns Mastercard. If inflation is 10% a year, and prices thus double every seven years, this means charge card companies will have their throughput double, even without any card customer growth. Mastercard takes a 0.25% slice of all transactions. Double the amount charged, bottom line earnings double or more, dividends increased adccordingly. A great beat-inflation stock. It is why going forward I expect VIG to do well. It is the "severe inflation hedge" for me. R48 This is a fabulously well stated observation . @st6,... Thanks ft6. I try to make any reply posts to be saying things "for everyone" to consider. R48 |
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Post by retiredat48 on Dec 4, 2022 16:57:27 GMT
Investors may want to consider VIG's in-house actively managed rival - VDIGX¹. VDIGX had a higher CAGR, better worst year, and lower max. drawdown over the trailing 10 yr., 15 yr., and since VIG inception² time periods.
June 2006 - Nov. 2022
¹ Don Kilbride (Wellington Management) has managed the fund since 02/01/2006.
² Inception date: 04/21/2006; earliest available monthly data starts June 2006.Point well noted...I will investigate further. I must confess at my age, any more money I squeeze out of things is irrelevant to me as it will just be added inheritance for my kids. Had my 52 year old daughter with me over weekend, and she noted she would be retired now if not for covid. She got selected by CEO of Univ of No. Carolina Hospital/Chapel Hill campus, to be on the covid task force team representing the ICU, and has not had time off in two years. She was remarking how anything more I make goes to her and two sisters. So don't fret! BTW remember if in taxable accounts, ETFs get huge tax breaks in not having large annual cap gain payouts, versus open ended funds. R48 |
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Post by retiredat48 on Dec 4, 2022 17:01:56 GMT
retiredat48 , @st6 , My response was to the OP's original question which I surmised as a 3-fund portfolio. We know that R48 holds many funds so keeping VIG and SCHD together as part of his 16+ fund portfolio might be helpful. But I maintain that holding VIG and SCHD along with VOO in a 3-fund portfolio is way too much value tilt in a world where tech is still more likely to have higher returns and the OP says he/she is agnostic about dividends. This amounts to 80%+/- large value equities, and 20% growth. You will very likely be leaving a lot of money on the table for very close to the same risk. IMHo. R48 reply...mozart522,...I agree moz. I think I stated spmewhere to include some growth stock funds as well. |
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Post by retiredat48 on Dec 4, 2022 17:05:30 GMT
I've seriously considered VIG in the past because it doesn't hold any FAANG stocks and it isn't as concentrated in its top holdings as SCHD. ,...?? Of course it doesn't hold any fang stocks. That's not the theme of the fund. Want dividends today, earnings increasing today, dividends increasing soon, etc. Few fang stocks fit this bill. Of course, own fang stock funds also, to rectify this. Note Vangd Cap appreciation funds (actively managed) own some fang stocks as main big hitters. R48 |
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Post by retiredat48 on Dec 4, 2022 17:09:25 GMT
I too have been considering some changes involving these ETFs. My current portfolio equities are mostly SCHD/IVV at a 53/47% ratio. I also know that VDIGX has outperformed VIG, and with lower volatility and a higher sortino ratio for some time. I also have a Roth I could put it in. VIG has a larger percentage of small/mid cap stocks. Maybe that accounts for the previous underperformance, and maybe that will work in it's favor in the coming years. Unknowable I suppose, but maybe worth considering. R48 reply...exaxctly my thinking. If VIG type companies have lagged, and lagged in the bear market, is it not time for them to SHINE!?? Can't say for sure, but the small cap theme is being promoted by some key stock guru's as a great place to be next decade. Everything is good...at the right price!
R48
I am really enjoying this thread, thanks to everyone contributing. |
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Post by retiredat48 on Dec 4, 2022 17:45:02 GMT
A BTW post...
BTW are investors aware that academic type studies show that: about 66%...and some say up to 90%, of investor long term performance is due to correct asset allocations, investment sectors chosen etc, versus mutual fund selection. Perhaps one can quibble with these findings.
It is partly why I focus most of my time on what and where and when to invest in things, and not so much on mutual fund/ETF selection.
I also consider that if I decide to invest in an area (let's say home builders) that within two hours of research I can come up with a fund/ETF that meets my investing methods. (Mostly means I want the top performing fund since the last bottoming, reasonable expense ratio, and some due diligence as to who runs it.) Part of that investigation is reading threads on the investment forums...I get many fund ideas from other posters!!
R48
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Post by roi2020 on Dec 4, 2022 19:58:37 GMT
A BTW post... BTW are investors aware that academic type studies show that: about 66%...and some say up to 90%, of investor long term performance is due to correct asset allocations, investment sectors chosen etc, versus mutual fund selection. Perhaps one can quibble with these findings. It is partly why I focus most of my time on what and where and when to invest in things, and not so much on mutual fund/ETF selection. I also consider that if I decide to invest in an area (let's say home builders) that within two hours of research I can come up with a fund/ETF that meets my investing methods. (Mostly means I want the top performing fund since the last bottoming, reasonable expense ratio, and some due diligence as to who runs it.) Part of that investigation is reading threads on the investment forums...I get many fund ideas from other posters!! R48
However, I don't believe asset allocation is responsible for ~90% of a portfolio's return.
A famous paper titled "Determinants of Portfolio Performance" published in 1986 is often misinterpreted.
A snippet from this paper is below. Note the word "variation" (highlighted for emphasis).
"Data from 91 large U.S. pension plans over the 1974-1983 period indicate that investment policy dominates investment strategy (market timing and security selection), explaining on average 93.6% per cent of the variation in total plan return."
Ibbotson and Kaplan published "Does Asset Allocation Policy Explain 40, 90, or 100 Percent of Performance?" in 2000.
The paper's main conclusion is below.
"In summary, our analysis shows that asset allocation explains about 90 percent of the variability of a fund's returns over time but explains only about 40 percent of the variation of returns among funds."
While asset allocation is very important, prudent selection of mutual funds/ETFs can enhance overall portfolio returns.
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Post by Deleted on Dec 4, 2022 20:34:41 GMT
I've seriously considered VIG in the past because it doesn't hold any FAANG stocks and it isn't as concentrated in its top holdings as SCHD. ,...?? Of course it doesn't hold any fang stocks. That's not the theme of the fund. Want dividends today, earnings increasing today, dividends increasing soon, etc. Few fang stocks fit this bill. Of course, own fang stock funds also, to rectify this. Note Vangd Cap appreciation funds (actively managed) own some fang stocks as main big hitters. R48 I was specifically looking for a large growth fund that didn't hold FAANG stocks. Since the OP already holds them in high proportion in VOO, I thought the lack of them in VIG was worth mentioning. |
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Post by Deleted on Dec 4, 2022 20:42:11 GMT
A BTW post... BTW are investors aware that academic type studies show that: about 66%...and some say up to 90%, of investor long term performance is due to correct asset allocations, investment sectors chosen etc, versus mutual fund selection. Perhaps one can quibble with these findings. It is partly why I focus most of my time on what and where and when to invest in things, and not so much on mutual fund/ETF selection. I also consider that if I decide to invest in an area (let's say home builders) that within two hours of research I can come up with a fund/ETF that meets my investing methods. (Mostly means I want the top performing fund since the last bottoming, reasonable expense ratio, and some due diligence as to who runs it.) Part of that investigation is reading threads on the investment forums...I get many fund ideas from other posters!! R48
However, I don't believe asset allocation is responsible for ~90% of a portfolio's return.
A famous paper titled "Determinants of Portfolio Performance" published in 1986 is often misinterpreted.
A snippet from this paper is below. Note the word "variation" (highlighted for emphasis).
"Data from 91 large U.S. pension plans over the 1974-1983 period indicate that investment policy dominates investment strategy (market timing and security selection), explaining on average 93.6% per cent of the variation in total plan return."
Ibbotson and Kaplan published "Does Asset Allocation Policy Explain 40, 90, or 100 Percent of Performance?" in 2000.
The paper's main conclusion is below.
"In summary, our analysis shows that asset allocation explains about 90 percent of the variability of a fund's returns over time but explains only about 40 percent of the variation of returns among funds."
While asset allocation is very important, prudent selection of mutual funds/ETFs can enhance overall portfolio returns.
I believe an academic study's findings depend on the methodology (sample selection, variables, analysis, etc.). Not having read the studies (not wanting to at this point), I find the information presented in quotations above (pension plans and funds), difficult to apply in individual investor decisions. |
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Post by roi2020 on Dec 4, 2022 21:03:04 GMT
Asset allocation is a significant factor which influences investment performance.
However, I don't believe asset allocation is responsible for ~90% of a portfolio's return.
A famous paper titled "Determinants of Portfolio Performance" published in 1986 is often misinterpreted.
A snippet from this paper is below. Note the word "variation" (highlighted for emphasis).
"Data from 91 large U.S. pension plans over the 1974-1983 period indicate that investment policy dominates investment strategy (market timing and security selection), explaining on average 93.6% per cent of the variation in total plan return."
Ibbotson and Kaplan published "Does Asset Allocation Policy Explain 40, 90, or 100 Percent of Performance?" in 2000.
The paper's main conclusion is below.
"In summary, our analysis shows that asset allocation explains about 90 percent of the variability of a fund's returns over time but explains only about 40 percent of the variation of returns among funds."
While asset allocation is very important, prudent selection of mutual funds/ETFs can enhance overall portfolio returns.
I believe an academic study's findings depend on the methodology (sample selection, variables, analysis, etc.). Not having read the studies (not wanting to at this point), I find the information presented in quotations above (pension plans and funds), difficult to apply in individual investor decisions.
The following article provides additional context.
Link
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Post by bizman on Dec 13, 2022 11:56:09 GMT
More evidence of SCHD's status as the dividend growth champ. It just announced its 4th quarter dividend of $.7034 a share on 12-7-22. So it's TTM distributions (all income) for 2022 total $2.5615/share versus $2.249/share for 2021. This is a 13.9% year over year growth rate. At yesterday's closing price of $76.97/share, that makes for TTM yield of 3.33%. It's been growing at high rates like this for a long time. Those profitability, quality, and dividend growth screens must really work as it beats VIG and VYM by a mile (they haven't yet reported their December quarter distributions). It may not have dividend growth in its name, but it definitely has it in its game. SCHD |
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Post by anovice on Dec 13, 2022 13:21:50 GMT
More evidence of SCHD's status as the dividend growth champ. It just announced its 4th quarter dividend of $.7034 a share on 12-7-22. So it's TTM distributions (all income) for 2022 total $2.5615/share versus $2.249/share for 2021. This is a 13.9% year over year growth rate. At yesterday's closing price of $76.97/share, that makes for TTM yield of 3.33%. It's been growing at high rates like this for a long time. Those profitability, quality, and dividend growth screens must really work as it beats VIG and VYM by a mile (they haven't yet reported their December quarter distributions). It may not have dividend growth in its name, but it definitely has it in its game. SCHDDo you know how much of the $2.5615 is QDI? |
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dirt
Ensign
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Post by dirt on Dec 13, 2022 13:38:52 GMT
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Post by bizman on Dec 13, 2022 21:20:38 GMT
The jaded skeptic in me keeps looking for reasons why SCHD's performance is either too good to be true or too good to last. Surely it can't keep growing its dividend at such a rate forever?!? Also, its style will likely come in and out of favor, and it almost surely won't outperform the S&P 500 from a total return perspective in a long bull market going forward. But it is currently beating the S&P's total return for all time periods YTD through 10 years according to M*. The one complaint I have, if you can call it that, is that on some down days it can be down a lot relative to the S&P or other dividend ETFs and dividend stocks. Which I solve for now by adding individual stocks and other holdings that mostly seem to stabilize the ride a bit. And 10-13% annual dividend growth probably can't be assumed going forward. But if you assume it is trading at or near fair value with a current yield of about 3.3%, and it can grow its dividend at even 6-8% annually long term going forward, that's a 9-11%+ long term total return profile based on the way Josh Peters used to look at things. And even forgetting the dividends and dividend growth, the total returns have been excellent. I'd love to find several more holdings with seemingly this many positives going for them. |
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