A reader asked how Global Small Cap Value returns compare to US Small Cap Value.
While I do not have global small-cap value data, I do have Dimensional’s Mid-Cap and Small-Cap Value index data so that we can see how they perform in history.
Here are three charts, each showing the ten-year, fifteen-year, twenty-year rolling returns of MSCI World index (Large-cap blend) against Dimensional Global Targeted Value, US Targeted Value, and Europe Value.
In recent years, Europe’s performance have not been good but historical returns of the Global Targeted Europe index have been decent.
The average Targeted Europe returns have been as good as the US.
If we look over a longer period, we can see that there is quite an outperformance for small-cap value over the MSCI World. It is that recently, that difference has narrowed.
Those who wish to set up their portfolio to capture better returns believe that certain factors such as value, size, quality, momentum and low volatility would do well over time and are willing to harvest these factors through ETFs and funds over time, here are some articles to get you started on factor investing passively:
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I invested in a diversified portfolio of exchange-traded funds (ETF) and stocks listed in the US, Hong Kong and London.
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Providend – Where I currently work doing research. Fee-Only Advisory. No Commissions. Financial Independence Advisers and Retirement Specialists. No charge for the first meeting to understand how it works
Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.
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Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Fee-only Wealth Advisory firm Providend. All opinions on Investment Moats are his own and does not represent the views of Providend.
His investment broker of choice is Interactive Brokers, which allows him to invest in securities from different exchanges all over the world, at very low commission rates, without custodian fees, near spot currency rates.