Vanguard growth etfs

Hey guys. Quick question why is everyone so keen on VWRL or VT in this community? I understand it is a great choice but I was looking over some mid cap and even large cap growth ETFs and they do extremely well. See picture

So why not allocate even like 50% of your investments to something like this?

Thanks, Mace

Yes, 50% to value and 50% to growth :joy: :joy: :joy: :joy:, so it’s equivalent to VT/VWRL

Some periods, value overperforms and some other period growth overperforms

I’m curious, what’s your thesis on those factors overperforming on the next decade+ instead of a reversion to the mean?

So VWRL is a growth ETF?

No thesis. More of an inquiry. I was wondering if it’s not a good idea to allocate some money to those mid cap growth stocks, instead of everything in ETFs with large companies like FB,Amazon etc

Weighting by market cap is supposedly the best strategy, because (supposedly) there’s no way of knowing whether any other allocation - and which one - would result in higher returns. Also you are supposedly taking higher, “non-compensated” risk by doing so (I’d call it “other” risk, if any).

That said, if you look at MSCI World Growth (though that’s not what Vanguard is tracking) over the, it has not proven superior to “plain” MSCI World over the long term - at which point the question of reversal to the mean can be asked.

So only based on past performance?

Value outperformed growth for decades, that’s how Warren Buffet got rich. Since 20 years, growth is beating the shit out of value. I wouldn’t try to chase past performance.

So you just told me to not base it on past performance, but then proceed to advise value stocks based on past performance?

All I’m asking is for the sake of diversity would it be good to allocate some portion to growth??

Growth stocks are already contained in globally diversified ETFs. So you’re not asking about diversification by including them but about overweighting growth stocks.

Value has consistently outperformed growth over very long periods of time.

The theory is that future cashflow of value stock is discounted more and thus is is more risky to hold value stock and that is why they have a higher return(you buy future cashflows for less money now)

Here is a good look at the value premium and its recent performance.


Market cap weighted ETFs like VT are already pretty growth-dominant due to recent outperformance of growth stocks.

And another video just came out today from Ramin about value investing…

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