Fidelity direct indexing and small cap value

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ppnewbie
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Fidelity direct indexing and small cap value

Post by ppnewbie »

I've been wanting to buy decent chunk of AVUV. But I really dont want to pay the .6 percent expense ration. I may just buy the top ten stocks in AVUV or CALF and put it into a direct index for 60 / year. Any thoughts on this approach?

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Re: Fidelity direct indexing and small cap value

Post by Jack Jones »

It’s only 0.25%.

I’d expect you might lag the index (AVUV in this case) with this approach.

AVUV would have greater diversification than you, and they would enter their positions before you do.
Last edited by Jack Jones on Tue Apr 16, 2024 11:05 am, edited 1 time in total.
ppnewbie
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Re: Fidelity direct indexing and small cap value

Post by ppnewbie »

Good point. For some reason I was thinking it was higher. Definitely worth it at .25 percent.
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sophie
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Re: Fidelity direct indexing and small cap value

Post by sophie »

Hey I didn't know about AVUV, thanks for mentioning! It looks like FISVX (Fidelity's small cap value mutual fund) is lagging it quite significantly, and it gets worse and worse over time.

What is everyone's favorite small cap value investment???
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yankees60
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Re: Fidelity direct indexing and small cap value

Post by yankees60 »

sophie wrote: Tue Apr 16, 2024 6:27 pm Hey I didn't know about AVUV, thanks for mentioning! It looks like FISVX (Fidelity's small cap value mutual fund) is lagging it quite significantly, and it gets worse and worse over time.

What is everyone's favorite small cap value investment???
I have been in Vanguard's Small Cap Value Index continuously since January 2003.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
ppnewbie
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Re: Fidelity direct indexing and small cap value

Post by ppnewbie »

sophie wrote: Tue Apr 16, 2024 6:27 pm Hey I didn't know about AVUV, thanks for mentioning! It looks like FISVX (Fidelity's small cap value mutual fund) is lagging it quite significantly, and it gets worse and worse over time.

What is everyone's favorite small cap value investment???
After lots of research it seems to be the new consensus best pick for small cap value. Avantis is an offshoot of dimensional funds. The other one I really like is CALF. But it has a high expense ratio of .6. I may do the direct indexing thing with the pacer top 10 or 20 stocks. But need to decide if I want that hassle.

https://www.paceretfs.com/products/CALF
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yankees60
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Re: Fidelity direct indexing and small cap value

Post by yankees60 »

ppnewbie wrote: Tue Apr 16, 2024 8:08 pm
sophie wrote: Tue Apr 16, 2024 6:27 pm Hey I didn't know about AVUV, thanks for mentioning! It looks like FISVX (Fidelity's small cap value mutual fund) is lagging it quite significantly, and it gets worse and worse over time.

What is everyone's favorite small cap value investment???
After lots of research it seems to be the new consensus best pick for small cap value. Avantis is an offshoot of dimensional funds. The other one I really like is CALF. But it has a high expense ratio of .6. I may do the direct indexing thing with the pacer top 10 or 20 stocks. But need to decide if I want that hassle.

https://www.paceretfs.com/products/CALF
I am paying 0.07%.

https://www.msn.com/en-us/money/watchli ... ource=MlAl

Not convinced any other small cap value fund is going to do any better to justify an increased fee.

I've been (good) brainwashed over 20 years ago to only go index and stay away from anything managed if there is also an index option.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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sophie
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Re: Fidelity direct indexing and small cap value

Post by sophie »

Buying and managing a basket of stocks to keep them balanced is definitely a hassle. There are certainly benefits especially if you're high income, because you can selectively tax loss harvest and better control when you take capital gains. But, you need to buy at least 20 stocks if you want to track the index reliably.

Maybe a robo-investor site could help. Definitely be mindful of fees though. I got more interested in this once Fidelity stopped charging fees for stock trades, but I still don't have the time and the clutter would be annoying to deal with. What I would probably also do, if you're doing this in a taxable account, is to create a separate "account" purely for the individual stocks to help with tracking and management headaches.
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Re: Fidelity direct indexing and small cap value

Post by sophie »

Huh, I just looked it up - and Fidelity does have a robo-investing service! The catch is that the fee is 0.35% except the first $25,000. That's pretty stiff for a DIY stock fund. I think I'll pass.
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Re: Fidelity direct indexing and small cap value

Post by ppnewbie »

vnatale wrote: Wed Apr 17, 2024 10:50 am
ppnewbie wrote: Tue Apr 16, 2024 8:08 pm
sophie wrote: Tue Apr 16, 2024 6:27 pm Hey I didn't know about AVUV, thanks for mentioning! It looks like FISVX (Fidelity's small cap value mutual fund) is lagging it quite significantly, and it gets worse and worse over time.

What is everyone's favorite small cap value investment???
After lots of research it seems to be the new consensus best pick for small cap value. Avantis is an offshoot of dimensional funds. The other one I really like is CALF. But it has a high expense ratio of .6. I may do the direct indexing thing with the pacer top 10 or 20 stocks. But need to decide if I want that hassle.

https://www.paceretfs.com/products/CALF
I am paying 0.07%.

https://www.msn.com/en-us/money/watchli ... ource=MlAl

Not convinced any other small cap value fund is going to do any better to justify an increased fee.

I've been (good) brainwashed over 20 years ago to only go index and stay away from anything managed if there is also an index option.
One thing to consider is that VBR is really more like mid cap value.
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yankees60
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Re: Fidelity direct indexing and small cap value

Post by yankees60 »

ppnewbie wrote: Tue Apr 23, 2024 1:37 am
vnatale wrote: Wed Apr 17, 2024 10:50 am
ppnewbie wrote: Tue Apr 16, 2024 8:08 pm
sophie wrote: Tue Apr 16, 2024 6:27 pm Hey I didn't know about AVUV, thanks for mentioning! It looks like FISVX (Fidelity's small cap value mutual fund) is lagging it quite significantly, and it gets worse and worse over time.

What is everyone's favorite small cap value investment???
After lots of research it seems to be the new consensus best pick for small cap value. Avantis is an offshoot of dimensional funds. The other one I really like is CALF. But it has a high expense ratio of .6. I may do the direct indexing thing with the pacer top 10 or 20 stocks. But need to decide if I want that hassle.

https://www.paceretfs.com/products/CALF
I am paying 0.07%.

https://www.msn.com/en-us/money/watchli ... ource=MlAl

Not convinced any other small cap value fund is going to do any better to justify an increased fee.

I've been (good) brainwashed over 20 years ago to only go index and stay away from anything managed if there is also an index option.
One thing to consider is that VBR is really more like mid cap value.
VBR?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
ppnewbie
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Re: Fidelity direct indexing and small cap value

Post by ppnewbie »

Vanguard Small Cap Value ETF.
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yankees60
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Re: Fidelity direct indexing and small cap value

Post by yankees60 »

ppnewbie wrote: Tue Apr 23, 2024 8:38 am Vanguard Small Cap Value ETF.
I've yet to invest in my first ETF so it is still only mutual fund symbols that I see and am familiar with.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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