ETF Vanguard Global Value Equity Active ETF (VVLU)

Discussion in 'Shares & Funds' started by Nodrog, 29th Sep, 2018.

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  1. SatayKing

    SatayKing Well-Known Member

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    Bloody investors. Always acting in their perceived best interests rather than for the greater good. Oops, close to talking about me there :oops:

    And I must say all the best to the @The Falcon. His and @dunno's posts I've always read with interest. Sadly for me though I found it a slog to get the concepts. Got there to some extent but I've likely missed a number of aspects.
     
  2. Greedo

    Greedo Well-Known Member

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    +1!
     
  3. dunno

    dunno Well-Known Member

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    I’m betting Vanguard are playing the long game. I think offering factors and active ETF’s for them is a strategic move to broaden the choices for investors and disrupt and take further market share from traditional active managers. The picture for them is bigger than just each fund having to obtain enough FUM to earn its keep in the short term. Of course, It could turn out that I have bet wrong. I think more of a risk than VVLU being individually closed is that they decide to stop all active ETF initiatives and return to their passive indexing roots, globally.

    Possibly, do you know anybody else silly enough to continue accumulating into this?
    upload_2019-7-24_15-30-14.png
    VVLU relative to VGS.

    Actually, I’m delighted to be able to continue building my international exposure in an unloved and hence cheaper exposure.

    Maybe Value is dead, and it will never recover. That’s the risk, but if as I believe Value and Gowth return roughly similar over the long run, my opportunity to accumulate cheaply will pay off handsomely.

    As to why I don’t think value is dead despite its recent performance. Biggest driver for me with broad value factor exposure is duration. Value is short duration and Growth is long duration. There is no way I would buy long duration bonds now – yet that’s been the smart thing to do for a long time now. Sooner or later that ends. I’m happy to keep collecting VVLU for the long term even though I’m getting my arse handed to me in the short run.
     
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  4. Nodrog

    Nodrog Well-Known Member

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    Yes, ME:). That is if it wasn’t for my commitment now to simplicity and limiting the number of funds we hold:cool:. Temptation is so hard at times but them me rules.

    VVLU is an excellent fund if one takes the time to look under the hood as discussed earlier in this thread.

    Value will never die just as market crashes will never die, it’s simply how Humans are wired.
     
  5. Islay

    Islay Well-Known Member

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    I have been accumulating VVLU too:)
     
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  6. Nodrog

    Nodrog Well-Known Member

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    I remembered reading this interview with Bogle in relation to Smart Beta Funds and the original intention of the first Vanguard Value Fund. So I dug it up again out of interest:
    Bogle: Smart Beta ETFs Do Not Work
     
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  7. Burgs

    Burgs Well-Known Member

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    Thanks for posting.
    Bogle last paragraph sums it up:
    "So we are looking at 19 years cumulatively and nothing has been proven. So my argument was from the beginning was it may work, but I will tell you what I know works. If you're trying to get your share of the market return, get it by owning the market."
     
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  8. Burgs

    Burgs Well-Known Member

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    Very interesting insights dunno thank you for sharing.
    I presume it would be hard to attract funds if the performance so far is seen as sub standard to the benchmark FTSE Developed All-Cap?
    I know it states that the fund does not intend to track or replicate the benchmark, but from an investors point of view tough decision to put in funds when the performance thus far not that good i.e. 2.39% compared to 13.66% from inception 13/4/2018?
     
  9. Redwing

    Redwing Well-Known Member

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    Don't hold it but I expect it will have its day in the sun

    [​IMG]

    From 2017 Out-of-favor value stocks are ripe for bargain hunting

    According to analysis by Kent Daniel, a finance professor at Columbia University, the average large-cap value stock’s price-to-book ratio is barely half that of the average among large-cap growth stocks. Among small-cap stocks, value is even cheaper relative to growth.

    This spread is much wider than average. Since 1959, according to Daniel, the average value stock’s price-to-book ratio has been only a third less than that of the average growth stock. The only other time when value was any cheaper than now came as the internet bubble reached its peak.


    Since 2017 I think the price gap has continued to widen
     
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  10. Nodrog

    Nodrog Well-Known Member

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    Oops didn’t read all the way to the end as I was just looking for the bit I remembered on the original Value Fund. But that’s my thinking on indexing nowadays given my adoption of “simplicity” - Plain vanilla cap weighting for the indexed part of the portfolio.

    I also thought this comment from Bogle in relation to reasons to invest in the Value Fund would excite @dunno:D.
    2AF4E946-8A5D-456E-82F3-537B7DD17DD5.png
     
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  11. dunno

    dunno Well-Known Member

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    Watching the video is easier than reading
    Bogle: Smart Beta ETFs Do Not Work

    Perhaps it should be watched more regularly, wisdom personified.

    In this paragraph he clearly spells out the current opportunity in value for those that don’t act like the crowd. If the crowd does half as well and you can zig when they zag……………..

    So, assuming growth does do 9% in the future – that will be 9% from this point (assume near top ???) in this cycle to the same point in the next cycle. Value will do the same 9% from this point in the cycle (assume near bottom???) to same point next cycle. Somewhere down the track on the road to both returning 9% long term, will be a more neutral environment with factors broadly valued similarly, call it mid cycle. At this point growth will be a showing 4.5% return and Value 13.5%. That’s when Value will be back in vogue and Funds will start pouring in, I however will quietly change ships at that point to the idiot proof strategy of “If you're trying to get your share of the market return, get it by owning the market”

    In other words, I’m leaning against what Boggle describes as normal behaviour that leads most investors to do half as well as the markets. Once we get to mid cycle, I’ll implement the idiot proof solution.

    I’m happy that my transition to passive plan is robust, I have a transition timeline of over a decade with approximately ongoing weekly transactions of 25K required to implement. The transition is mainly from domestic active to international passive. What I need to do now is spend less time, because more time expended doesn’t help and more time explaining to others is also a waste of time because as SK says it’s all individual.


    So without having much more interest in passive other than implementing it. I’m going to join The falcon on the side lines before I fill Idle time by wandering into certain threads and expressing my arrogant displeasure when observing the crowd doing what the crowd does.
     
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  12. Islay

    Islay Well-Known Member

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    I have enjoyed your posts @dunno and learnt a lot from you. I hope to see you and @The Falcon back here again sometime soon.
     
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  13. Nodrog

    Nodrog Well-Known Member

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    :eek: market timing, Bogle would turn in his grave at such behaviour:D.
    Not you too:eek:. What a shame:(.

    Contrary to what you might think at times I (too fond of stirring at time but for fun, not malice) agree with the vast majority of what you say. I think it was in the mid 90’s I went through a phase where I was super-keen on learning about asset allocation, indexing, total return investing and selling shares to “create one’s own dividend” etc. So even though I might appear to be thick about this stuff at times “I do get it”:).

    I also agree that as investors it would be ideal if they could invest and behave optimally. However I’ve also seen it all too many times where due to one reason or another most investors will fall short of achieving this goal. Hence my responses at times are not meant to disagree with such aspirations but to offer those investors who fall short of achieving “optimal” some hope that rather than beat themselves up or be too disheartened they can still do well.

    My keenness on the dividend approach rather than total return / drawdown really comes back to behavioural issues. The focus on “capital” / price movements appears to bring out the worst in many investors. By directing their attention to the “income” it may just help them hold their nerve when fear takes hold of the market.

    Quite frankly if anyone here should be on the side lines then it’s me. Over 7,500 posts suggests that I’ve long overstayed my welcome and bored most here ********! So back into my hole and see if I can stay there for longer than 5 minutes this time:confused::

    0F3B1359-05B9-49B2-A906-C4A9F695F852.jpeg
     
  14. sharon

    sharon Well-Known Member

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    Oh ***** - all the good ones are leaving. :(
    @The Falcon and @dunno - enjoy your time off.
    You will be missed. :(

    @Nodrog - don't you go anywhere - I forbid it. :p
     
    Last edited: 25th Jul, 2019
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  15. Islay

    Islay Well-Known Member

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    Please don't even think about it! If the market does correct soon someone has to look out for all the nervous nellies! :) All the best are leaving, please don't be the third.
     
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  16. Burgs

    Burgs Well-Known Member

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    Yes very sad, I hope I didn't contribute to @The Falcon and @dunno leaving :(
    I have been investing for a while and thanks to this forum it has really helped me with my investments moving forward.
    So I'm very grateful to all that contribute.
     
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  17. oracle

    oracle Well-Known Member

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    Of all my years of investing the one advice from Buffett (others may have also said it) I think is superior to any other advice i have seen is to consistently/regularly keep buying a low cost index fund over the course of your working life.

    No other strategy I know of can guarantee beating the above strategy. I tried a lot of things with my personal portfolio some worked some didn’t and returns after capital gains tax were similar to index fund.

    Luckily with my SMSF I followed the above advice where DRP was ticked and new funds usually once a month got invested straight away without any consideration of market cycle. I couldn’t be more satisfied with the outcome after 7 years of running the SMSF.

    Now gradually I am implementing the same strategy with personal name portfolio. Keep buying once a month and DRP wherever possible. There is no need to keep lot of powder dry. Be in the market and have as much money compounding as quickly as you can.

    PS : This is not directed @dunno. He is much more experienced and wiser investor than myself and I am fairly confident his value fund investing in all probability will outperform vanilla index over coming years. The thing is dunno knows when to switch out but not everyone will be able to execute this strategy successfully.

    Cheers
    Oracle
     
    Last edited: 25th Jul, 2019
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  18. dunno

    dunno Well-Known Member

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    That is the rolled gold standard @oracle

    Allocating to value at this point for me is not about being smart enough to know when to unwind but being stupid enough to not get it right from the start and having to make large allocation changes mid-life concentrating allocations to a limited market cycle range.

    There is no doubt that I was Lucky to succeed in the market. I took on high risk without a safety net. Passive implemented as @oracle described it is the safety net. I should have built that first, not second. That I was lucky enough to get away with it and now have spare time on my hands, I think I have spent some of that time here trying to pay back. However, Oracle just nailed my deepest belief more succinctly then I ever could.

    I’m Just pulling back not leaving. Simply need to make a void of vacant time in my life to work out what is next for me. I’m not ready to be retired yet.

    Maybe I’ll take over one of the small ******* LIC’s that are becoming ripe for picking and call it Ironic. My marketing pitch will be “don’t invest with me, I will most likely not recover the expenses I incur in running the fund and you’re likely to do twice as bad as me when you give up in disgust during one of the many times I’m out of sync with the market and look like a total Muppet” I strongly suggest you buy index funds instead”
     
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  19. Redwing

    Redwing Well-Known Member

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    Maybe @dunno is just taking the current cream from his growth funds and purchasing value?
     
  20. Zenith Chaos

    Zenith Chaos Well-Known Member

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    Me too. Hope you're both back sooner rather than later.
     
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