Vanguard vs. DFA & Avantis

I recorded this one on the Friday before the Bogleheads Conference, with factor investing — and my upcoming debate — very much on my mind. It’s a mailbag episode, and your questions pointed me right at the topics I’ll be discussing there.

First, a couple of updates. I’m still getting wonderful emails since Margie slipped news of my 83rd birthday into the newsletter — including one from a listener who started with Tom Cock and me on Sound Investing back in the 1980s and went on to put his own family, and many friends, on the road to financial independence. I also share more feedback from “Ed,” who went through PlanVision’s low-cost financial-planning service, including his experience getting help with Roth conversion decisions.

Then I dig into the questions you’ve been sending:

10:30 — What’s the real difference between Dimensional (DFA) and Avantis funds, and where does Vanguard fit? A short history of factor investing, and why owning both DFA and Avantis can actually add diversification
18:05 — Bruce worries about the S&P 500’s concentration in a handful of tech names. Should you split your large-cap blend across a cap-weighted fund (VOO), an equal-weighted fund (RSP), and a factor fund (AVLC)?
24:39 — A reader’s proposed 100%-stock-for-life portfolio, and how the DFA and Avantis all-in-one funds compare
28:20 — The combination funds I keep getting asked about (AVGE, AVGV and VT), and why a simple “thirds” approach added about 1% a year over a recent stretch
39:35 — John is 51, planning to FIRE this summer with $1.8 million and a 2.8% withdrawal rate, and wants to go all-in on worldwide small-cap value. Why I’d say no, and what Bill Bernstein would tell him
53:08 — How to find a good small-cap value fund (and why I favor AVUV and DFSV), plus what Morningstar’s percentile rankings really tell you
1:01:12 — The question I can’t wait to answer for a family of young investors at the conference: is there a good “mild factor tilt” for life? I walk through our Table G1B to show exactly what more small-cap value adds, in both return and risk

As always, thank you for your feedback, your donations, and for staying the course even on the hard days. I hope to see many of you at the Bogleheads Conference!