I have a question about asset allocation and value vs growth. I thought it would be easy to put together a balanced value/growth portfolio using indexes:
Example:
1. US equities
50% Vanguard Value Index: VTV
50% Vanguard Growth Index: VUG
Morningstar says the Value/Blend/Growth ratios are: 28:31:24.
That's close to 50/50.
2. International equities
50% Ishares EAFE Value Index: EFV
50% Ishares EAFE Growth Index: EFG
Morningstar says the Value/Blend/Growth ratios are: 36:30:22
That's not even close to 50/50 !
To make Morningstar say it's balanced, I'd need 70% EFG and 30% EFV
I guess it could be differences between the definition of value/growth between MSCI and Morningstar. Or, maybe it's an ishares tracking error ? Anyone know or care to comment ?
Thanks!
PS - I know there's no small cap in those allocations. I'm just trying to get a handle on the big stuff first.
Example:
1. US equities
50% Vanguard Value Index: VTV
50% Vanguard Growth Index: VUG
Morningstar says the Value/Blend/Growth ratios are: 28:31:24.
That's close to 50/50.
2. International equities
50% Ishares EAFE Value Index: EFV
50% Ishares EAFE Growth Index: EFG
Morningstar says the Value/Blend/Growth ratios are: 36:30:22
That's not even close to 50/50 !
To make Morningstar say it's balanced, I'd need 70% EFG and 30% EFV
I guess it could be differences between the definition of value/growth between MSCI and Morningstar. Or, maybe it's an ishares tracking error ? Anyone know or care to comment ?
Thanks!
PS - I know there's no small cap in those allocations. I'm just trying to get a handle on the big stuff first.