I am currently researching Vanguard Mid-Cap and Vanguard Small-Cap indexes. The methodology for inclusion in these indexes is outlined in the CRSP Methodology Guide.
According to the guide, inclusion in the general index requires several factors. For example, it has to be listed on specific exchanges and have qualifying volume indicators among other things. I don't see, however, any fundamental indicators for inclusion in the index such as price to earnings or price to book.
CRSP has a subset of indexes that qualify stocks using additional metrics such as price to earnings and future growth. To me, this seems like a better investment because it is limiting inclusion in the index to a subset of important fundamental factors. So, as a result, this makes me want to own 50% value and 50% growth, versus being 100% the entire index. The major downside to this, however, is that you are facing a higher expense ratio and a much higher turnover ratio within the fund, which can eat away at returns.
So, my question is, is there a difference between being 100% the index versus 50% the value and 50% the growth index?