DRAG
Roundhill China Dragons ETF
stock BATS

As you said, OP, AVUV is all the rage. I don't trust AVUV or FSEV as much. I'll keep this about FSEV. I've posted on AVUV before. Some points overlap

They are active management, plain and simple. They pinky promise they will be great at selecting small value + other factors, but they have no transparent, replicable rules

Some people are replacing sizeable portions of their portfolios on a “these guys are gonna make me some money” bet.


Granted, some factors did very well in selected historical tests. Still, for this kind of fund to work, when contrasted to a basic global equities benchmark, they need to overcome:

1 - FEES: FSEV charges 0.28% every year. That additional cost is guaranteed. The additional return is not

2 - INTERNAL COSTS: Likely higher.

Some providers say they can save on transaction costs. That theoretical advantage is borderline irrelevant in 2026, against realistic and implementable alternatives. VT is an example. 5 year tracking difference was even smaller than TER; VT's internal transaction costs might be minuscule.

No matter how skilled the management, wider bid-asks and more market impact are an inherent part of the small cap journey.

3 - VOL DRAG: Potentially greater volatility drag, which damages geometric compounding. Lose 50% and then gain 50%, and you are still down 25%, even though the arithmetic average return was zero. Future arithmetic returns must overcome this as well.


And some caveats:

Small value might have been the lucky winner out of a billion things tested by every single researcher in decades. The returns might be explainable by chance. Genuinely out of sample results are much weaker and often not statistically convincing

It must resist crowding (too many players know the "edge")
All in all, it is very much an active bet, on a single fund. It is more expensive than more passive approaches. And it doesn't really diversify well (it's still US equities).

As you said, OP, AVUV is all the rage. I don't trust AVUV or FSEV as much. I'll keep this about FSEV. I've posted on AVUV before. Some points overlap

They are active management, plain and simple. They pinky promise they will be great at selecting small value + other factors, but they have no transparent, replicable rules

Some people are replacing sizeable portions of their portfolios on a “these guys are gonna make me some money” bet.


Granted, some factors did very well in selected historical tests. Still, for this kind of fund to work, when contrasted to a basic global equities benchmark, they need to overcome:

1 - FEES: FSEV charges 0.28% every year. That additional cost is guaranteed. The additional return is not

2 - INTERNAL COSTS: Likely higher.

Some providers say they can save on transaction costs. That theoretical advantage is borderline irrelevant in 2026, against realistic and implementable alternatives. VT is an example. 5 year tracking difference was even smaller than TER; VT's internal transaction costs might be minuscule.

No matter how skilled the management, wider bid-asks and more market impact are an inherent part of the small cap journey.

3 - VOL DRAG: Potentially greater volatility drag, which damages geometric compounding. Lose 50% and then gain 50%, and you are still down 25%, even though the arithmetic average return was zero. Future arithmetic returns must overcome this as well.


And some caveats:

Small value might have been the lucky winner out of a billion things tested by every single researcher in decades. The returns might be explainable by chance. Genuinely out of sample results are much weaker and often not statistically convincing

It must resist crowding (too many players know the "edge")
All in all, it is very much an active bet, on a single fund. It is more expensive than more passive approaches. And it doesn't really diversify well (it's still US equities).