Also posted on Big-Bang.
As I mentioned in another thread, I am looking for a "compliment" to FXAIX (Taxable acct.) and PRILX (IRA), to take a little edge off of my portfolios growth tilt, in particular these two LCB funds lean growth these days.
Although CGDV (div. value) is classified by M* as LCV, it's short life has been as a LCB (equity income), whereas CGUS (core equity) is classified as a LCB (growth and income) but has a strong growth lean. There appears to be some overlap but from what I can tell, nothing too crazy. Correct me if I am wrong, please.
From what I have read about Capital Group and their venture into the ETF world, is that they do not adhere religiously to the M* categories and are free to go where the best ideas are (actively managed). I'm considering CGDV because I like that it leans Value although it resides in the M* LCB category. Will this be the case going forward; I certainly do not know. A fund like this seems to better fit my goal, but I am torn.
Any suggestions, recommendations, insights, or thoughts on these or similar funds will be greatly appreciated!
Thank you, Matt
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From Invesco site:
Product Details
"The Invesco Russell 1000 Dynamic Multifactor ETF (Fund) is based on the Russell 1000 Invesco Dynamic Multifactor Index (Index). The Fund will invest at least 80% of its total assets in the securities that comprise the Index. The Index is constructed using a rules-based approach that re-weights large-cap securities of the Russell 1000 Index according to economic cycles and market conditions, reflected by expansion, slowdown, contraction or recovery. The securities are assigned a multi-factor score from one of five investment styles: value, momentum, quality, low volatility and size. The Fund and Index are reconstituted and rebalanced based on economic indicator signal changes, as frequently as monthly."
More on OMFL
My thoughts were to find a counterbalance to my growth tilted portfolio. Even my “blend” funds are now more growthy than blendy.
Right now most value funds are having a rough go. Especially dividend focused funds. Maybe this is temporary but maybe not. Hence my looking into other options.
M* puts funds in Categories (on Quote pages) by taking into account the fund objectives and its own assessments. So, sometimes that may differ from what the firms may say, especially when they give wide latitudes to fund managers. It's good in a way that M* doesn't just puts down what the fund firm or portfolio managers may say.
M* Styles (on Portfolio pages) are based on M* analyses of the actual portfolio holdings. M* has its own dynamic definitions of SC, MC, SC, rather than static mkt-cap-based definitions that many firms use. That may give another reason for fund firms to complain.
This M* dual evaluation accounts for funds where the fund managers have wide latitudes.
Anyway, looking at M* Styles, CGDV is LC-blend almost near the border between value and blend, and CGUS is LC-blend almost at the border between blend and growth.
If you’re interested in LCB take a look at MOAT. it has a long track record and has beaten the S&P in multiple time frames with strong risk adjusted returns… also a great owl. Ben has discussed it on the boards.
FWIW, I moved some money to CGDV and CGGO this year. Mostly by selling individual stocks which I never seem to get right. These 2 ETFs have about a 20% overlap with each other. The 2 funds you are comparing have quite a bit more overlap.
https://www.etfrc.com/funds/overlap.php
SPGP will bend you away from growth, and large caps, but it's still the 500 universe.
I appreciate the info and suggestions; I will also check out MOAT and the overlap tool that MikeM provided.
Please continue to provide any additional comments and suggestions, I am more than willing to perform the necessary DD.
Yogibearbull, point well made! I think it's also important to heed overlap but maybe as important to gage to what % each stock is of the portfolio.
If both hold MA, but fund "A" is at 12%, and fund "B" is at 2%. I would not consider that a "problem". Does that make investing sense? What are your (and others) thoughts?
Jerome Dodson managed PARWX from inception (04/29/2005) until he retired on 12/31/2020.
Billy Hwan became a PARWX comanager on 05/01/2018 and the sole manager in 2021.
Mr. Dodson took a contrarian approach which resulted in an elevated risk profile.
Mr. Hwan takes a relative value approach and stated that he wanted to reduce the fund's beta vs. the S&P 500.
Past PARWX performance may not be very indicative of future performance.
IIRC they didn't even market it as a value fund until they started thinking about the transition. It was just Dodson's project.
I think Hwan gets some credit for the three year alpha of 4.53. Eight of the top ten holdings were bought under his watch, as were most of the top 25.
OTOH, they are no longer fully independent since their partnership with AMG. And their funds after PARWX and PRBLX are run of the mill.
Buying actively managed funds requires a lot more leg work, that's for sure. Given the OP's comments, he could also look at funds like DODGX and VEIRX as alternatives in the active space that would take him in different directions from growth.
For etf's I would add SCHD and RWL if they haven't been mentioned before.
All suggestions are welcomed and I do look into all of them!
There is a lot of experience and expertise on this board and I appreciate everyone sharing them.