Pure Indexing, Flirting with Factors, and Finding Intermediaries: Thoughts on Addressing Three-Fund Portfolio Inefficiencies
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After reading Ang’s ‘Asset Management: A Systematic Approach to Factor Investing’ and rereading the newest 50th anniversary edition of Malkiel’s ‘A Random Walk,’ I wanted to explore how funds like Dimensional’s DFUS address indexing inefficiencies without fully committing to factor tilts. The goal: capture market beta with index inefficiencies such as adverse selection addressed. DFUS works for US equities, but finding a VXUS replacement remains unsolved. This is not financial advice and I am just your average retail investor.