FAB vs VTV

FABCFirst Trust Multi Cap Value AlphaDEX Fund

VTVAVanguard Morningstar Value ETF

In short

FAB One of the original 2007 AlphaDEX funds: rather than buying value by size, it scores stocks on value and growth factors, cuts the weakest ranks, and tier-weights the roughly 700 survivors across large, mid and small caps.

VTV Value investing for three cents on every hundred dollars a year. Since 2004, VTV has run a passive, fully invested portfolio of roughly 300 large US companies that screen cheap, at a fee near the industry floor.

Stated mandate

FAB The Fund seeks to track, before fees and expenses, the price and yield performance of the Nasdaq AlphaDEX Multi Cap ValueTM Index. It normally invests at least 90% of net assets in securities comprising that Index.

VTV The fund seeks to track a large-capitalization U.S. value-stock benchmark through passive indexing and substantial replication of that index.

Why people hold it

• FAB The rules rank stocks on value and growth factors, drop the lowest-ranked names, then sort the keepers into five weight tiers, so higher-ranked picks get the bigger slice.sec.govnasdaq.com
• Weights follow rank, not market cap (equal weighting inside each tier), so the portfolio has a different shape than cap-weighted value peers like VTV and IWD.nasdaq.com
• Roughly 700 holdings reaching down into mid and small caps, a wider value net than a large-cap-only screen.
• It sticks to the job description: at least 90% of net assets in its Nasdaq index constituents, and it has tracked that index closely.

• VTV 0.03% a year, about a sixth of the 0.18% median for US value funds. Cost is the part of the outcome the fund actually controls.
• Same recipe, very different sticker: PRXV tracks the same declared value index and charges 0.36%, twelve times VTV's fee.
• Passively managed, full replication, fully invested. No manager hunches, no cash sitting idle, and the fund has tracked its benchmark closely.vanguard.com
• One of the largest and most actively traded funds in the US value aisle, the kind of scale that keeps bid-ask spreads thin for ordinary orders.

Worth knowing

• FAB At 0.66% a year it costs several times the roughly 0.20% median for US value ETFs. The quant screening and reweighting is what the fee buys.
• Shares change hands thinly, which can mean wider bid-ask spreads and more slippage on bigger orders than the giants of the category.
• The index is reconstituted and rebalanced quarterly, so the roster turns over faster than a slow-moving cap-weighted index, which can add trading and tax friction.sec.gov

• VTV Large caps only, about 300 of them. Cheap mid- and small-cap stocks live in separate funds (VOE, VTWV), so this is one slice of value, not the whole market.
• It is a value screen by design, so the priciest fast growers are largely filtered out. In growth-led stretches it can move very differently from a total-market fund.
• Income arrives quarterly, in four instalments rather than a monthly drip.

Full FAB profile⁠

Full VTV profile⁠