Small And Value Data For A Big World


You never quite know what the reception will be like when you post data into the internet void, but I wanted to thank everybody that has taken the time to contact me regarding the latest global site update.  Your feedback and encouragement are valuable and extremely appreciated!

Judging from the number of Merriman fans I’ve heard from in the last few weeks, it’s clear that a few assets like international small and value are quite a bit more popular than perhaps I previously understood.  I definitely got the message, and while it took a bit longer to assemble the right type of data that I can personally vouch for, I’m happy to report that the Merriman Ultimate is back.  And it marks the return of several assets as well — World Small and World Value.  

Long-time Portfolio Charts fans may notice that the terms have changed slightly, as they used to be called International Small and International Value.  But “international” is a bit of a loaded term in the US market, as it most often implies a world fund excluding the US.  To fit with the global focus, I’ve switched to the more neutral term “world” and split the assets into two variants — All and ex-US.  All represents the total cap-weighted developed market, while ex-US represents the same index excluding the United States.

As a result, there are actually four new assets to keep track of.  So in order to keep the calculators from becoming unnecessarily complicated I’ve built in a new feature that requires a quick explanation.




Do you see the black box in the bottom right corner labeled “World”?  That’s a new asset table setting that applies to the three international assets world, world small, and world value.  The default setting is ex-US just like previous versions of the tool, but there’s a new option as well — All.




Set the input to All, and you’ll notice that there’s no longer an ex-US note on those assets.  In this setting, the three world assets follow the total developed world market including the US.  This should be useful not only for non-US investors looking for world exposure including the United States, but also to US investors interested in a single cap-weighted global fund rather than a typical US/international fund pairing.

For anyone wondering, the replacement assets used in older years when no direct data is available also adjust with the world inclusion setting.  So when set to “xUS”, world ex-US is used as a replacement for small and value (when necessary) but it switches to world when set to “All”.  This is to try to match the design intent of the portfolio as closely as possible.  For all replacement assets, the verified returns calculations work the same as always.

By now I’m sure non-US investors may be wondering  — why not also include options that exclude other home countries?  Well not only does it really complicate the data but it’s also unnecessary.  The US is a particularly large percentage of the world stock market, so it’s easy to see how doubling up on a US and world fund would create a lot of overlap.  But other countries represent a relatively small percentage of the world index and any overlap is less noticeable.  For example, Canada only represents about 3% of the global market.  For precision-oriented investors, simply account for that extra 3% of Canadian stock included in the World asset in your modeled asset allocation and the calculators can continue to represent your portfolio quite well even if you personally use an ex-CAN fund.

And as a side note, in the process of updating the calculators I also took the time to correct a bug that a perceptive user alerted me to where non-invested cash (zeroes in all assets) did not display properly in the charts for all countries.  I don’t anticipate many people want to stuff money under the mattress, but those images can still be good for studying how inflation works and I’m happy to make them as accurate as possible.

As always, please contact me if you spot any bugs.  I occasionally miss a few things in large updates like this, and I appreciate the extra eyes.

Enjoy the new calculators!