Style Is Tricky

Sorry I haven't posted in a few days. It's been very busy (good busy), and I haven't seen a whole lot that would spur a blog post. Here's a quick something, though. 

The weighting is microscopic, but still, what's the deal? Dave Nadig weighed in. It's a long article, so the TLDR is "SpaceX (SPCX) was added to the Schwab U.S. Large‑Cap Value ETF (SCHV) not because it looks cheap, but because the Dow Jones style methodology couldn’t classify it as growth—so it defaulted into value by process of elimination."

That comes on the heels of our conversation the other day about the VLUE ETF having 22% in Micron (MU). If Dave is right, it's value because it's not growth, then to the point we made the other day, there's not much utility to the growth or value labels. 

That may not matter as much with an actively managed stock-picking fund. To buy that sort of fund is to buy the manager. The SpaceX weighting is so small in SCHV that if the company went out of business tomorrow, it probably would not be detectable in the NAV, but for anyone trying to build a style-oriented portfolio, it is tricky, maybe trickier than it should be.