Schwab has an impressive array of commission-free ETFs that make it amenable to factor tilting wthout transanction costs eating you alive. I spent a couple of hours today going through the list to see how well the global market portfolio with factor tilts could be implemented. Here are my results:
7.14% ACIM Global Large Blend
1.43% SYV US Large Value
0.36% RZV US Small Value
1.43% DWX Intl Large Value
0.36% FNDC Intl Small Value
0.71% FNDE Emerg Large Value
1.43% SYG US Large Growth
0.36% RZG US Small Growth
0.36% WMCR US Micro Blend
1.72% IHDG Intl Large Growth
0.43% SCHC Intl Small Blend
0.57% DGRE Emerg Large Growth
0.14% EWX Emerg Small Blend
2.86% SPLV US Large LowVol
2.86% IDLV Intl Large LowVol
1.43% EELV Emerg Large LowVol
1.43% FRN Frontier Blend
25.00%
Unfortunately, there were no momentum funds so I had to substitute Growth (or Blend) which is a poor man's momentum but style tracks momentum funds closely. Global Value, Emerg Small Value, Intl Micro Momo, Emerg Small Momo, US Small LowVol, Intl Small LowVol and Emerg Small LowVol were not available (either for free or as an ETF).
As far as the T-Bonds and T-Bills/CD's go, it seems vastly superior to buy the paper directly at the exact maturities rather than paying management fees to have subpar performance in an ETF. What's the catch to doing that, PS?
Factor Tilting with FREE Schwab ETFs
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MachineGhost
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Factor Tilting with FREE Schwab ETFs
Last edited by MachineGhost on Tue Dec 16, 2014 11:38 pm, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
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Pointedstick
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Re: Factor Tilting with FREE Schwab ETFs
The catch is that Schwab nickel-and-dimes you for selling. While buying is free, there's a $75 fee per bond sold. And you can't do it online; you have to call up a "fixed income specialist." Ugh.MachineGhost wrote: As far as the T-Bonds and T-Bills/CD's go, it seems vastly superior to buy the paper directly at the exact maturities rather than paying management fees to have subpar performance in an ETF. What's the catch to doing that, PS?
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
- CEO Nwabudike Morgan
- CEO Nwabudike Morgan
Re: Factor Tilting with FREE Schwab ETFs
Wait, is that really true? Did you mean $7.50? Even that is really bad!Pointedstick wrote: While buying is free, there's a $75 fee per bond sold.
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Pointedstick
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Re: Factor Tilting with FREE Schwab ETFs
$75 it is. 
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
- CEO Nwabudike Morgan
- CEO Nwabudike Morgan
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MachineGhost
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Re: Factor Tilting with FREE Schwab ETFs
Wow, does that include CD's or T-Bills?Pointedstick wrote: $75 it is.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!