There's been a lot of discussion lately about small cap value tilt since their 10-year returns finally shot past S&P 500 10-year returns.
So I took a look at 3-year, 5-year, and 10-year returns for Small Cap Value ETFs (IJS and SLYV), which started in Oct 2000, and compared them to S&P 500 returns (SPY).
Although Small Cap value has somewhat outperformed the S&P 500 in the earlier years, the difference is smaller than the variation. There is no strong pattern, and it really depends on which 3/5/10-year window you pick. In fact, there's a bigger difference between the top 2 small cap value ETFs (IJS and SLYV) than between either of them and SPY.
This chart shows the # of weeks in the past 20 years where ...
| vs SPY | IJS 3-year | IJS 5-year | IJS 10-year | SLYV 3-year | SLYV 5-year | SLYV 10-year |
|---|---|---|---|---|---|---|
| [Sm Cap - S&P 500] < 0% | 309 | 193 | 107 | 445 | 382 | 208 |
| [Sm Cap - S&P 500] > 0% | 598 | 609 | 435 | 462 | 420 | 334 |
| [Sm Cap - S&P 500] < -10% | 37 | 1 | 0 | 49 | 12 | 0 |
| [Sm Cap - S&P 500] > 10% | 88 | 38 | 0 | 62 | 20 | 0 |
Here's a Chart that shows the differences vary all over the place.
I don't see a clear case for having small value tilt in your portfolio. It'll perform better in some years and worse in others.
Submitted March 06, 2021 at 10:39PM by Maleficent_Plankton https://ift.tt/3c2WBeU
