this post was submitted on 07 Jun 2026
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What do you think about value mutual funds like these?
https://www.schwab.com/research/mutual-funds/tools/schwab-funds/index-funds/fundamental
I'm moving most of my US stock holdings to these funds. It's still US market exposure, so there will be some risk from the AI bubble. But the key thing is that these indices are not trying to track the Dow Jones, the NASDAQ, etc. They don't actively manage funds - they don't pick winners and losers. They are a passive investment blindly applying uniform rules - just like index funds. However, they don't weight by market cap. Instead they weight stocks in the index based on fundamental values - actual sales, retained earnings, book value, etc. The actual share price of the companies isn't factored in at all. And you can't even get into one of these indices until your company is profitable.
The expense ratios are higher than I'm used to. The low-cost index funds I've traditionally used have expense ratios more like 0.01-0.02%. This is 0.25%. This is still well below the 1% most managed funds use. But that is a downside of this.
With how tightly the whole global financial system is tied together, I'm not under any illusions that moving to these funds will eliminate my exposure to the AI bubble. But I hope at least to ameliorate it.