Sound Investing Bootcamp #9 - Best-in-Class ETF Recommendations
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Mar 5, 2025 Chris Pedersen, Director of Research who builds Best‑in‑Class ETF analysis using factor-based, transparent quantitative methods. He explains the factor-driven selection process, introduces a new relative factor expected return metric, and walks through recent ETF swaps and why Avantis and DFA choices may offer edge. Practical tips on accessibility, portfolio configurator tools, and why disciplined long-term commitment matters are also discussed.
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Relative Expected Return Added To Sheets
- Chris Pedersen adds a relative factor predicted expected annual return beside each fund to show expected return versus the worst fund in its group.
- This helps investors judge whether switching funds (with costs or taxes) is worth the expected gain.
Prefer Higher Predicted Return Funds
- Avantis funds replaced several prior recommendations because their factor-predicted expected returns and methodology look stronger for those asset classes.
- If your platform lacks an Avantis ETF, use the listed alternatives rather than forcing a switch with costs.
Five-Factor Science Drives Picks
- Pedersen uses the Fama–French five-factor model to attribute fund returns to market, size, value, profitability, and investment factors.
- He models funds by multiplying exposures by historical premiums to get factor-predicted expected returns.
