4 ms·

I do think this is a great model for someone who wants to hold the S&P 500 (which many people do). However, educated index investors typically hold a total mar

by elil17 2y ago

I do think this is a great model for someone who wants to hold the S&P 500 (which many people do). However, educated index investors typically hold a total market index fund. Double’s US small cap offering is severely under diversified and there is no international offering. 10 bps is absolutely worth it to get broader diversification and international exposure.

jjmaxwell4 2y ago
Complementing a Direct Index US 500 portfolio with Small Cap or International ETFs is very possible. You can exposure yourself to US Small Cap and International through ETFs - there is the related ETF expense ratio in that case.
- elil17 2y ago
  Sure - but now that's looking like a lot more work and you're not saving much money. VT is 7 bps but VXUS is 8 and VB is 5. So if I want to use double just for my US large caps, I've got maybe 40% of my money there, 20% in VB, and 40% in VXUS. Then I wind up with a blended expense ratio of 4.2 + $1/month. Okay, I've saved about 2.8 bps, which is $28/year on $100,000. In return I don't just have to do manual rebalancing - I have to move money in and out of a separate account every time I want to rebalance. I also have more tracking error. I don't think that's something anyone is actually going to do for less than 3 bps. But of course if you are able to use Double as a one-stop-shop, then it's great. I'll absolutely be keeping an eye on them and would seriously consider moving my money over if they could track MSCI ACWI.
throwaway2037 2y ago
> However, educated index investors typically hold a total market index fund. Has this outperformed the S&P 500 index in the last 30 years? I doubt it. Also: what percentage of profits from S&P 500 are int'l? Much more than people think. It is already int'l.
- Marsymars 2y ago
  > Has this outperformed the S&P 500 index in the last 30 years? This isn’t a particular argument in favour of the S&P 500. Of course some subsets of a total market fund have outperformed the total market over whatever arbitrary time period you want to pick. In the exact same way, various subsets of the S&P 500 have outperformed the S&P 500 over the past 30 years.

by elil17 2y ago

jjmaxwell4 2y ago

Complementing a Direct Index US 500 portfolio with Small Cap or International ETFs is very possible. You can exposure yourself to US Small Cap and International through ETFs - there is the related ETF expense ratio in that case.

elil17 2y ago
Sure - but now that's looking like a lot more work and you're not saving much money. VT is 7 bps but VXUS is 8 and VB is 5. So if I want to use double just for my US large caps, I've got maybe 40% of my money there, 20% in VB, and 40% in VXUS. Then I wind up with a blended expense ratio of 4.2 + $1/month. Okay, I've saved about 2.8 bps, which is $28/year on $100,000. In return I don't just have to do manual rebalancing - I have to move money in and out of a separate account every time I want to rebalance. I also have more tracking error. I don't think that's something anyone is actually going to do for less than 3 bps. But of course if you are able to use Double as a one-stop-shop, then it's great. I'll absolutely be keeping an eye on them and would seriously consider moving my money over if they could track MSCI ACWI.

throwaway2037 2y ago

> However, educated index investors typically hold a total market index fund. Has this outperformed the S&P 500 index in the last 30 years? I doubt it. Also: what percentage of profits from S&P 500 are int'l? Much more than people think. It is already int'l.

Marsymars 2y ago
> Has this outperformed the S&P 500 index in the last 30 years? This isn’t a particular argument in favour of the S&P 500. Of course some subsets of a total market fund have outperformed the total market over whatever arbitrary time period you want to pick. In the exact same way, various subsets of the S&P 500 have outperformed the S&P 500 over the past 30 years.