Notes 2022-05-06
My current holdings in Betterment account
U.S. Value Stocks - Small Cap
- Percentage: 5.82%
- Current holdings:
- From Vanguard Small-Cap Value ETF (VBR)Go to text →
- Expense Ratio: 0.07%
- Inception: 2004-01-26
- NAV as of 2022-05-04: $166.98
- Index tracked: CRSP U.S. Small Cap Value Index
- From iShares Russell 2000 Value ETF (IWN)Go to text →
- Expense Ratio: 0.24%
- Inception: 2000-07-24
- NAV as of 2022-05-04: $150.27
- Index tracked: Russell 2000 Value Index
- Why this asset class and these ETFs?
- U.S. Small Cap stocks typically grow at a faster pace than the typical company, and tend to represent an often-volatile segment of the market
- Value stocks are those that trade at a lower price relative to their dividends, earnings and/or sales than the average stock
- VBR is the primary ETF used to gain value stock exposure among companies with a small capitalization
- The secondary ETFs, IWN and SLYV are highly correlated with VBR- Betterment's use of secondary ETFs enables Tax Loss Harvesting+
U.S. Value Stocks - Large Cap
- Percentage: 8.82%
- Current holdings:
- From Vanguard Value ETF (VTV)Go to text →
- Expense Ratio: 0.04%
- Inception: 2004-01-26
- NAV as of 2022-05-04: $142.57
- Index tracked: CRSP U.S. Large Cap Value Index
- From Schwab U.S. Large-Cap Value ETF (SCHV)Go to text →
- Expense Ratio: 0.04%
- Inception: 2009-12-11
- NAV as of 2022-05-04: $68.17
- Index tracked: Dow Jones U.S. Large-Cap Value Total Stock Market Index
- Why this asset class and these ETFs?
- U.S. Large Cap stocks can be defined as those in the top 70% of the capitalization of the U.S. stock market
- VTV is the primary ETF used to gain value stock exposure among companies with a large capitalization
- The secondary ETFs, SCHV and SPYV are highly correlated with VTV. SCHV and SPYV both have similarly low expense ratios compared to VTV
U.S. Total Stock Market
- Percentage: 29.64%
- Current holdings:
- From Vanguard Total Stock Market ETF (VTI)Go to text →
- Expense Ratio: 0.03%
- Inception: 2001-05-24
- NAV as of 2022-05-04: $207.62
- Index tracked: CRSP U.S. Total Market Index
- From iShares Core S&P Total U.S. Stock (ITOT)Go to text →
- Expense Ratio: 0.03%
- Inception: 2004-01-20
- NAV as of 2022-05-04: $92.08
- Index tracked: S&P Composite 1500 Index
- Why this asset class and these ETFs?
U.S. Value Stocks - Mid Cap:
- Percentage: 7.07%
- Current holdings:
- From Vanguard Mid-Cap Value ETF (VOE)Go to text →
- Expense Ratio: 0.07%
- Inception: 2006-08-17
- NAV as of 2022-05-05: $142.18
- Index tracked: CRSP U.S. Mid Cap Value Index
- From iShares Russell Midcap Value ETF (IWS)Go to text →
- Expense Ratio: 0.23%
- Inception: 2001-07-17
- NAV as of 2022-05-05: $112.07
- Index tracked: Russell Midcap Value Index
- Why this asset class and these ETFs?
- U.S. Mid Cap stocks are typically defined as those companies between USD 1b-8b in market capitalization in the U.S.
- Since VOE has the lowest expense ratio and tightest bid-ask spread, VOE is the primary ETF used to gain value stock exposure among companies with a medium capitalization
- The secondary ETFs, IWS and IJJ are highly correlated with VOE
International Emerging Market Stocks:
- Percentage: 12.98%
- Current holdings:
- From Vanguard FTSE Emerging Markets (VWO)Go to text →
- Expense Ratio: 0.08%
- Inception: 2005-03-04
- NAV as of 2022-05-05: $41.90
- Index tracked: FTSE Custom Emerging Markets All Cap China A Inclusion Net Tax (US RIC) Index 1
Footnotes
- From iShares Core MSCI Emerging (IEMG)Go to text →
- Expense Ratio: 0.09%
- Inception: 2012-10-18
- NAV as of 2022-05-05: $50.41
- Index tracked: MSCI Emerging Markets Investable Market Index
- Why this asset class and these ETFs?
- This set of holdings offers exposure to a broad collection of stocks from emerging markets, such as China, Taiwan, India, Brazil, Russia, Thailand and South Africa, among others. International Emerging Market Stocks generally involve higher expected risk compared to Developed Market Stocks, but may lead to higher growth as developing states modernize and gain wealth. Emerging market stocks are less correlated with U.S. Stocks and other developed market stocks, which makes them an important part of a diversified portfolio
- VWO is the primary ETF used to gain exposure to stocks in international emerging markets
- The secondary ETFs, IEMG and SPEM are highly correlated with VWO
International Developed Market Stocks:
- Percentage: 20.60%
- Current holdings:
- From Vanguard FTSE Developed Markets (VEA)Go to text →
- Expense Ratio: 0.05%
- Inception: 2007-07-20
- NAV as of 2022-05-05: $43.71
- Index tracked: FTSE Developed ex US All Cap Net Tax (US RIC) Index
- From iShares Core MSCI EAFE ETF (IEFA)Go to text →
- Expense Ratio: 0.07%
- Inception: 2012-10-18
- NAV as of 2022-05-05: $63.06
- Index tracked: MSCI EAFE Investable Market Index
- From Schwab International Equity ETF (SCHF)Go to text →
- Expense Ratio: 0.06%
- Inception: 2009-11-03
- NAV as of 2022-05-04: $33.46
- Index tracked: FTSE All-World Developed x US
- Why this asset class and these ETFs?
- This set of holdings offers exposure to a broad collection of stocks from non-U.S. developed markets such as United Kingdom, the European Union, Japan and others. Generally, developed market stocks have a similar risk and return profile as the U.S. Total Stock Market
- Since VEA has the lowest expense ratio and tightest bid-ask spread, VEA is the primary ETF used to gain exposure to international developed market stocks
- The secondary ETFs, IEFA and SCHF are highly correlated with VWO
U.S. Inflation-Protected Bonds:
- Percentage: 1.02%
- Current holdings:
- From Vanguard Short-Term Inflation (VTIP)Go to text →
- Expense Ratio: 0.04%
- Inception: 2012-10-12
- NAV as of 2022-05-05: $50.53
- Index tracked: Bloomberg US Treasury TIPS (0-5 Y)
- Why this asset class and these ETFs?
- U.S. Inflation-Protected Bonds are issued by the U.S. Treasury with the value of the principal indexed to inflation (but not the interest payments). This set of holdings serves to insulate a part of the portfolio from the depreciating effects of inflation, while also offering historically low correlation with other types of bonds, helping to achieve greater diversification. Additional diversification in a bond portfolio adds a layer of protection during market downturns
- VTIP is the selected ETF used to gain exposure to U.S. Inflation-Protected Bonds due to its competitive bid-ask spread, low expense ratio and robust asset base.
U.S. Municipal Bonds:
- Percentage: 5.82%
- Current holdings:
- From iShares National Muni Bond ETF (MUB)Go to text →
- Expense Ratio: 0.07%
- Inception: 2007-09-07
- NAV as of 2022-05-05: $105.84
- Index tracked: ICE AMT-Free US National Municipal Index – Benchmark TR Gross
- From SPDR Nuveen Bloomberg Municipal Bond ETF (TFI)Go to text →
- Expense Ratio: 0.23%
- Inception: 2007-09-11
- NAV as of 2022-05-05: $45.71
- Index tracked: Bloomberg US Municipal Managed Money (1-25 Y)
- Why this asset class and these ETFs?
- U.S. Municipal Bonds are only included in taxable portfolios, since the interest from them is generally federally tax-exempt. The underlying bonds are issued by state and regional governments to finance capital expenditures, such as infrastructure spending. While municipal bond credit risk is slightly higher than risk-free U.S. Treasuries, it still remains very low, which is attractive for risk-averse investors. This characteristic, coupled with favorable federal tax treatment, makes municipal bonds an excellent addition to taxable portfolios
- MUB is the primary ETF used to gain exposure to U.S. Municipal Bonds, due to its relatively high liquidity
- The secondary ETF, TFI, is similar to MUB but has a slightly higher bid-ask spread.
U.S. High Quality Bonds:
- Percentage: 1.57%
- Current holdings:
- From iShares Core Total US Bond Market (AGG)Go to text →
- Expense Ratio: 0.03%
- Inception: 2003-09-22
- NAV as of 2022-05-05: $101.57
- Index tracked: Bloomberg US Aggregate
- Why this asset class and these ETFs?
- U.S. High Quality Bonds provide exposure to the U.S. investment-grade bond market, bringing stability to portfolios, while offering higher cash income than U.S. Treasury bonds alone. The underlying bonds in this set of holdings have been rated no lower than BBB- by Standard and Poor's, or Baa3 by Moody's, minimizing credit risk. U.S. High Quality Bonds are still subject to interest rate risk. These bonds are offered by the U.S. government and high-quality u.S. corporations, and also could be comprised of mortgage-backed securities. The average bond maturity of the underlying bonds in this individual asset class is 8 years
- AGG is the primary ETF used to gain exposure to U.S. High Quality Bonds, due to its low bid-ask spread
International Developed Market Bonds:
- Percentage: 4.38%
- Current holdings:
- From Vanguard Total International Bond (BNDX)Go to text →
- Expense Ratio: 0.07%
- Inception: 2013-06-04
- NAV as of 2022-05-05: $50.27
- Index tracked: Bloomberg Global Aggregate x USD Float Adjusted RIC Capped
- Why this asset class and these ETFs?
- International Bonds are issued by non-US developed market governments and organizations, largely in Europe and the Pacific regions. The bond in this set of holdings have high credit quality and provide worldwide interest diversification for a bond portfolio, which helps to mitigate risk. These bonds are issued by a variety of countries and corporations to finance various spending needs, and the likelihood of default by these issuers is relatively low.
- The selected ETF for International Developed Market Bonds is BNDX, due to its competitive expense ratio.
International Emerging Market Bonds:
- Percentage: 2.28%
- Current holdings:
- From iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB)Go to text →
- Expense Ratio: 0.39%
- Inception: 2007-12-17
- NAV as of 2022-05-05: $89.35
- Index tracked: J.P. Morgan EMBI Global Core Index
- From Vanguard Emerging Markets Government Bond ETF (VWOB)Go to text →
- Expense Ratio: 0.20%
- Inception: 2013-05-31
- NAV as of 2022-05-05: $64.07
- Index tracked: Bloomberg USD Emerging Markets Government RIC Capped Bond
- Why this asset class and these ETFs?
- International Emerging Market Bonds are dollar-denominated bonds issued by governments with economies that are rapidly growing and industrializing. This component offers higher expected returns than other types of bonds in the portfolio due to higher expected risk. Their unusually low correlation with other bonds results in higher risk-adjusted expected performance for the bond portion of a portfolio.
Children
- SPDR Nuveen Bloomberg Municipal Bond ETF (TFI)
- Schwab International Equity ETF (SCHF)
- Schwab U.S. Large-Cap Value ETF (SCHV)
- Vanguard Emerging Markets Government Bond ETF (VWOB)
- Vanguard FTSE Developed Markets (VEA)
- Vanguard FTSE Emerging Markets (VWO)
- Vanguard Mid-Cap Value ETF (VOE)
- Vanguard Short-Term Inflation (VTIP)
- Vanguard Small-Cap Value ETF (VBR)
- Vanguard Total International Bond (BNDX)
- Vanguard Total Stock Market ETF (VTI)
- Vanguard Value ETF (VTV)
- iShares Core MSCI EAFE ETF (IEFA)
- iShares Core MSCI Emerging (IEMG)
- iShares Core S&P Total U.S. Stock (ITOT)
- iShares Core Total US Bond Market (AGG)
- iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB)
- iShares National Muni Bond ETF (MUB)
- iShares Russell 2000 Value ETF (IWN)
- iShares Russell Midcap Value ETF (IWS)
Tags
Backlinks