# Ben Felix Model Portfolio: Constructing a U.S. Version with ETFs
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## Introduction
In this video, we dive into the Ben Felix Model Portfolio and how to construct a U.S. version of it using ETFs. We’ll explore the reasons behind the portfolio, the ETFs to use, and the potential benefits of investing in it.
## Who Is Ben Felix?
Ben Felix is a portfolio manager at PWL Capital in Canada. He is widely known for his YouTube channel [Common Sense Investing](https://www.youtube.com/benfelixcsi) and his Rational Reminder podcast alongside Cameron Passmore. Ben Felix’s investment philosophy is rooted in evidence-based approaches and data-driven decision-making. He advocates for index investing and has a particular focus on small cap value investing, following in the footsteps of renowned investors like Larry Swedroe and Paul Merriman.
## Understanding the Ben Felix Model Portfolio
The Ben Felix Model Portfolio is a lazy portfolio designed by Ben Felix and Cameron Passmore of PWL Capital. It combines globally diversified index funds with factor tilts, emphasizing factors such as Size, Value, and Profitability. The portfolio aims to optimize expected returns by diversifying across both geographic regions and risk factors, as supported by the Fama-French 5 Factor Model. To learn more, you can read their paper on the proposed factor portfolio [here](https://www.pwlcapital.com/wp-content/uploads/2020/12/Five-Factor-Investing-with-ETFs.pdf).
## U.S. Translation of the Model Portfolio
Since Ben Felix and PWL Capital are based in Canada, the original model portfolio primarily consists of Canadian index funds. However, in this video, we provide a U.S. translation of the portfolio to cater to U.S.-based investors. The U.S. version of the portfolio includes allocations to U.S. stocks, international (ex-US) developed markets, emerging markets, U.S. Small Cap Value, and international (ex-US) Small Cap Value.
The U.S. Translation of the Ben Felix Model Portfolio:
– 42% U.S. Stock Market
– 24% International (ex-US) Developed Markets
– 12% Emerging Markets
– 14% U.S. Small Cap Value
– 8% International (ex-US) Small Cap Value
## How To Build the Portfolio with ETFs
To implement the Ben Felix Model Portfolio in the U.S., we recommend using the following ETFs:
– U.S. Stock Market: [Vanguard US Total Market ETF – VUN](ETF_URL)
– International (ex-US) Developed Markets: [iShares Core MSCI EAFE IMI Index ETF – XEF](ETF_URL)
– Emerging Markets: [iShares Core MSCI Emerging Markets IMI Index ETF – XEC](ETF_URL)
– U.S. Small Cap Value: [Avantis U.S. Small Cap Value ETF – AVUV](ETF_URL)
– International (ex-US) Small Cap Value: [Avantis International Small Cap Value ETF – AVDV](ETF_URL)
For accessing the portfolio and further details, you can visit: [optimizedportfolio.com/go/ben-felix-model-portfolio](portfolio_URL)
For a full performance backtest and a comprehensive understanding of constructing the portfolio with ETFs, watch the video.
## Resources and References
For more information and resources related to the Ben Felix Model Portfolio and factor investing, refer to the following links:
– [Blog Post: Ben Felix Model Portfolio](https://www.optimizedportfolio.com/ben-felix-model-portfolio/)
– [Blog Post: Factors Guide](https://www.optimizedportfolio.com/factor-investing/)
– [PWL Capital Paper: Five-Factor Investing with ETFs](https://www.pwlcapital.com/wp-content/uploads/2020/12/Five-Factor-Investing-with-ETFs.pdf)
– [Ben Felix YouTube Channel](https://www.youtube.com/benfelixcsi)
– [Rational Reminder Podcast](https://rationalreminder.ca/)
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Get this portfolio here: https://optimizedportfolio.com/go/ben-felix-model-portfolio
I’m a huge fan of Ben Felix and his proposed factor tilts. Here we’ll look at how to construct a U.S. version of his proposed model portfolio, ETFs to use, and why you might want to invest in it.
// TIMESTAMPS:
00:00 – Intro
00:10 – Who Is Ben Felix?
00:37 – What Is the Ben Felix Model Portfolio?
02:16 – Asset Pricing Models
03:08 – Risk Factor Premia
04:28 – “Factor” ETFs
05:05 – Model Portfolio Asset Allocation
05:39 – U.S. Translation
06:16 – Performance Backtest
06:44 – How To Build with ETFs
07:04 – Outro
// SUMMARY:
Ben Felix is a portfolio manager at PWL Capital in Canada. He is perhaps better known for his YouTube channel Common Sense Investing (@BenFelixCSI) and his Rational Reminder podcast (@rationalreminder) alongside Cameron Passmore.
Felix is a proponent of objectively looking at the evidence and data to inform and optimize investing decisions. For example, he is a proponent of index investing and small cap value, just like famous investors like Larry Swedroe and Paul Merriman.
The Ben Felix Model Portfolio, as the name suggests, is a lazy portfolio designed by Ben Felix and Cameron Passmore of PWL Capital that utilizes globally diversified index funds plus factor tilts, particularly for Size, Value, and Profitability. You can find the paper here for the proposed factor portfolio. They discuss the merits of this portfolio across many episodes of their Rational Reminder podcast.
Since Ben Felix and PWL Capital are in Canada, the proposed model portfolio is based largely around Canadian index funds:
30% iShares Core S&P/TSX Capped Composite ETF – XIC
30% Vanguard US Total Market ETF – VUN
10% Avantis U.S. Small Cap Value ETF – AVUV
16% iShares Core MSCI EAFE IMI Index ETF – XEF
6% Avantis International Small Cap Value ETF – AVDV
8% iShares Core MSCI Emerging Markets IMI Index ETF – XEC
A U.S. translation looks like this:
42% U.S. Stock Market
24% International (ex-US) Developed Markets
12% Emerging Markets
14% U.S. Small Cap Value
8% International (ex-US) Small Cap Value
► Get this portfolio here: https://optimizedportfolio.com/go/ben-felix-model-portfolio
► Read the blog post here: https://www.optimizedportfolio.com/ben-felix-model-portfolio/
► Factors guide blog post: https://www.optimizedportfolio.com/factor-investing/
► PWL paper: https://www.pwlcapital.com/wp-content/uploads/2020/12/Five-Factor-Investing-with-ETFs.pdf
► Ben Felix YouTube: https://www.youtube.com/benfelixcsi
► Rational Reminder podcast: https://rationalreminder.ca/
#lazyportfolio #modelportfolio #factorinvesting
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What do you think of Ben Felix and his and Cameron's model portfolio from their Rational Reminder podcast?
Additionally, listen to Rick Ferri’s 2 episode podcast with the white coat investor and paul merriman. Factors are the icing or the sprinkles. Ben likes to make factors appear more relevant than they are.
Ah – so you are imitating Ben. You should slow the talking speed down. Its a little too fast. Ben is arrogant and rude and disrespectful in his community. Not a great role model
Hi I guess Ben Felix dropped the SCV from his portfolio. He tells about it in one of the Rational Reminder video
What about using dimensional ETFs like DFSV and DISV?
thanks for the effort and the sharing. i am a fan of paul merriman and ben felix adds his version to the value/size tilt. i am an appreciative subscriber. thumbs up.
Bro- great leadership FANTASTIC piece !!
What do you think of QMOM/IMOM, given that MOM is an anomaly, but still very real.
Commenting for the algorithm
I would like to thank you for your videos and your efforts , but after i watched punch of your videos I noticed you are a fan of Avantis Funds ? Is that for a specific purpose.?
My portfolio is this! Give or take a few % using all Avantis funds.
Wonderful video! Thanks a lot. I follow his podcast and like his approach. If Brandon is reelected I will have to add international exposure… Socialism sucks ass
Used your link on your website for m1. Didnt know they offer 5% on deposits
Why not replace the VTI, VEA, and VWO with VT? Is it so that we don't like the ratio VTI to VEA to VWO that's inside of VT?
Thank-you for a thorough and concise presentation of this portfolio and its underlying rationale. It seems the FF-3 model provides sufficient explanation of the variance in returns, which makes fund selection and allocation a bit easier. As you alluded, this portfolio looks similar to the aggressive Ginger Ale portfolio.
Thanks always for your sensible, informative content! 👍🏼
Which way you end up going with, give it a good long time.
I am Ben Felix follower as well. Thanks for your so much density information.