US Value Tilt

Moderate Growth

Value has historically outperformed growth over long periods. After a decade of growth dominance, valuations have compressed. This portfolio leans into cheap, profitable companies.

4
ETFs
2.5%
Aggregate Yield
$53.8B
Wtd Avg AUM

Holdings

Symbol Name Weight Price 1D 3M YTD Yield AUM
SPYV State Street SPDR Portfolio S&P 500 Value ETF 35% $57.72 ... ... ... 1.8% $32.4B
SCHD Schwab US Dividend Equity ETF 25% $30.57 ... ... ... 3.5% $84.9B
IWD iShares Russell 1000 Value ETF 20% $221.87 ... ... ... 1.6% $72.6B
VBR Vanguard Small-Cap Value ETF 20% $224.80 ... ... ... 1.8% $33.7B

Investment Thesis

The value premium — the tendency of cheap stocks to outperform expensive ones — is one of the most studied phenomena in finance. From 1926 to 2023, US value stocks returned ~12% annualized vs ~10% for growth. But from 2010 to 2023, growth crushed value as tech dominated. The question is whether this is a permanent shift or a rubber band that will snap back. History suggests the latter: every extended period of growth dominance has eventually reversed. Value stocks today trade at historically wide discounts to growth, particularly in the small-cap space where VBR operates. SPYV provides large-cap value (Berkshire, JPMorgan, Johnson & Johnson), SCHD adds a quality/dividend screen, IWD captures the broad Russell 1000 Value, and VBR targets small-cap value — academically, the segment with the highest expected returns.

Portfolio Construction

SPYV State Street SPDR Portfolio S&P 500 Value ETF
35%
Large-cap value stocks — S&P 500 companies selected for value characteristics like low P/E, low price-to-book, and high dividend yield. Blue-chip names like Berkshire Hathaway, JPMorgan, and Johnson & Johnson.
Yield: 1.8% AUM: $32.4B
SCHD Schwab US Dividend Equity ETF
25%
Dividend value with quality screen — not just cheap stocks, but cheap AND high-quality stocks with strong fundamentals and consistent dividend growth. The quality filter avoids classic value traps.
Yield: 3.5% AUM: $84.9B
IWD iShares Russell 1000 Value ETF
20%
Russell 1000 Value for breadth — the broadest large-cap value index, capturing over 800 stocks across all value sectors. Provides diversification beyond what SPYV and SCHD offer.
Yield: 1.6% AUM: $72.6B
VBR Vanguard Small-Cap Value ETF
20%
Small-cap value — the deepest value discount. Academic research shows small-cap value has the highest expected return of any equity style, though with higher volatility.
Yield: 1.8% AUM: $33.7B

Key Considerations

  • Value has underperformed growth for over a decade — patience is required
  • Value stocks can be 'cheap for a reason' — structurally challenged businesses in declining industries
  • Small-cap value (VBR) is particularly volatile and can have long stretches of underperformance
  • The definition of 'value' is subjective and may miss the next generation of great companies
← All Portfolios