The author proposes a long-term, factor-tilted equity portfolio combining value and momentum ETFs across U.S., developed, and emerging markets.
AVUV — LONG The author includes AVUV to capture the small-cap value premium over a 20-year horizon. The strategy relies on the historical persistence of the size and value factors to outperform broad market indices.
20% AVUV (Avantis U.S. Small Cap Value)
SPMO — LONG SPMO is utilized to capture momentum in U.S. large-cap stocks, which the author believes complements value strategies during bull and expansion phases. The primary risk is the potential for momentum crashes.
20% SPMO (Invesco S&P 500 Momentum)
XMMO — LONG XMMO is included to provide exposure to the momentum factor within the mid-cap segment. The author aims to diversify factor exposure across different market capitalizations.
15% XMMO (Invesco S&P MidCap Momentum)
AVDV — LONG AVDV is selected to capture the small-cap value premium in international developed markets. This provides geographic diversification while maintaining a factor-tilted approach.
15% AVDV (Avantis International Small Cap Value)
IDMO — LONG IDMO is used to gain momentum exposure in international developed markets. The author believes this complements the value-tilted international holdings.
15% IDMO (Invesco S&P International Developed Momentum)
AVES — LONG AVES is included to provide value-tilted exposure to emerging markets. The author seeks to capture the value premium in this region as part of a global factor strategy.
15% AVES (Avantis Emerging Markets Value)