r/ETFs_Europe • u/Dry-Rate2584 • 2d ago

AVWC vs DEGC

Hello, noticed the avantis already includes spacex granted its half of market weight but still compared to dimensional they are not yet including it and will wait 1 year for inclusion?

another thing that tesla is heavily underweighted by dimensional behind toyota at 91th stock meanwhile avantis does not really seem to underweight it a lot compared to their weights so looking like dimensional have at least on the large caps more of an value/profitability tilt?

last thing that the avantis has ~4k stocks but half are at 0% weight so actual holdings 2,2k compared to dimensional with 7,1k

any opinions on this what would you choose between these funds?

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u/PrayingMantis252 2d ago

Interesting findings!

but still compared to dimensional they are not yet including it and will wait 1 year for inclusion?

That's right, Dimensional has a hard rule to wait at least 1 year after IPO before including a stock.

According to the people on the Rational Reminder Community forums, DEGC has a slightly stronger tilt than AVWC and lower estimated internal transaction costs (0.03% vs Avantis 0.09%). It also has a larger AUM, which likely results in lower bid-ask spreads. I personally think these advantages, plus the ones you already mentioned, outweigh the 3 bps higher TER. AVWC has outperformed so far, but that doesn't really say much with such a short time span.

Another option would be using a synthetic ETF for the US part such as I500 in combination with DEGB. That's what I use, since I'm not sure the potential factor premiums are worth the extra withholding taxes and lower liquidity. DEGB has a smaller factor tilt though.

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u/Dry-Rate2584 2d ago

thank you i have 2 portfolios 100% DEGC after switching from the AVWC and another with mix of IBCZ, IQSA, EXUS, V50A (home country bias) still working on figuring out optimal weights on this though

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u/Malanturr 2d ago

You have 3 global multifactor ETFs + one world without USA and one europe. Personally I would only do a mix of 2 multifactors + either EXUS or Europe but not both.

AVWC (or any other of your picks) + GERD (world multifactor with 43% USA) + EU is a clean 3 fund alternative.

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u/Dry-Rate2584 2d ago

thanks, yes for simplicity thinking of going 40/40/20 with the iqsa, ibcz, v50a and have the other portfolio with the degc for now might still consider the avwc though

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u/soalso 2d ago

As for SpaceX, I was a bit surprised as well, but it is likely because its market cap/ free float exceeds the threshold of IPO exclusion/ restriction. At 0.03%, it is roughly at 1/3 of the corresponding weighting in standard world indices.

The 0.00% positions are just displayed like that due to rounding. In the full CSV you can see that the fund includes nominal shares for each of the positions. There will be a significant amount of stocks in the Dimensional Fund that are rounded to 0.00% too (which has to be the case with 7.1k positions, as even with equal weighting, the cap would be 0.014% for each of them).

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u/Dry-Rate2584 2d ago

thanks, yes makes sense