1/10. Some mutual funds will be distributing a LOT OF TAX PAIN in 2021.
ETFs will deliver a lot less pain but THEY ARE NOT PERFECT in all situations.
Here are some reasons why you might see ETF distributions: 2/10. Some stocks cannot be transacted 'in-kind' and must be settled in cash. The bigger markets (e.g., US/dev) can settle 'in-kind' which means ETFs can exchange stocks back and forth without tax consequences...some markets need to settle in cash, which triggers a tax event.

Interesting fact regarding @MorningstarInc fundamental statistics. These are calculated as simple 'averages', NOT holdings-weighted averages.

So the real P/E ratio on SPY is ~27x, not ~20x.

Lesson: if you are looking at mkt-cap-wgt strategies, MSTAR may not be the best source Why does this matter?

Well, a LOT of investment products are mkt-cap-weighted, which means equal-wgt fundamental stats won't capture reality.

e.g. VBR -- small-cap 'value' p/e ~26x, NOT 13.2x as per Morningstar.

Know what you own.

Cliff started an interesting convo regarding the discussion of the value spread around the globe:
aqr.com/Insights/Resea…

We dug into our portfolio architect tool to do a deep dive into the topic... 1/ first the broad passive indexes
spy is definitely expensive...dev/em are similar

I had a great conversation with Roger Mortimer, a long-term hydrogen investor, and an ardent ESG fan.

1/ What I learned was counterintuitive and very relevant for those who invest in 'ESG'.

2/ Key takeaway? STOP investing in ESG portfolios if you want to be a good ESG investor! 3/
Not intuitive, right? I'll explain.

Let's establish the ultimate ESG investor goal: earn higher returns and create positive ESG change.

"Do well by doing good" is what the investment hippies call it.

#MFTF 2021 Announcement:

We are going to MARCH FOR THE FALLEN next Fall.

Save the date: September 25, 2021.

Sign up for updates: alphaarchitect.com/mftf/

cc @JLGronski

Please spread the word. Enjoy Memorial Day! My personal challenge:
--28 mile ruck w/ 35lb+ pack.
--Each mile there is a hero marker. Hit 50 burpees to honor their sacrifice.
--Making this public to ensure I stay disciplined.
My goals are 100% irrelevant to other people.
Everyone has a personal summit. #getafterit

Making no negative judgements here: in fact, I have a POSITIVE bias towards anything that comes from AQR and team.

But I am curious to hear what stories people have that attempt to explain why this chart is a "V" and centers on the end of 2017.

Anything alt, dies. Very weird. I know it is impossible, but if we can refrain from personal attacks and di#$head responses, I'd appreciate it. Looking for geniune ideas on why this may have happened