Record-Breaking Gains for Avantis ETF: Reaches 52-Week Peak Amid Potential for Further Growth
News Article: Avantis International Small Cap Value ETF Gains Traction Among Investors
The Avantis International Small Cap Value ETF (AVDV), a relatively new exchange-traded fund launched in 2019, has been garnering attention from investors due to its impressive performance and strategic approach. With approximately $11.45 billion in assets, AVDV invests in over 1,400 small-cap international stocks that exhibit high profitability and value characteristics.
According to the ETF's fact sheet, the top holding in AVDV is Marks & Spencer Group (MAKSY) with a market cap of 7.28 billion British pounds ($9.81 billion). The portfolio managers then overweight or underweight each stock based on the calculated initial weighting, which is determined by dividing a stock's market cap by the total value of all stocks in the ETF.
AVDV is heavily invested in Asia Pacific (44%) and Europe (42%), with the top three countries by weight being Japan (32%), the UK (12%), and Canada (10%). The top three sectors in AVDV are industrials (24%), materials (19%), and financials (18%), while technology is down at 4%. This diversified portfolio, with its top 10 holdings accounting for only 86% of the total assets, offers a unique opportunity for investors seeking international exposure.
The ETF has an annualized total return since inception through July 31 of 11.62%, outperforming its benchmark, the MSCI World ex USA Small Cap Index, by over 200 basis points[1]. This strong performance has been consistent, with the ETF hitting new 52-week highs frequently. It's worth noting that the benchmark's five-year annualized total return is 9.50% over the past five years through July 31.
If you're a passively-active investor, you might want to consider allocating some of your portfolio to AVDV for the next 3-5 years. Its blend of active management with broad diversification provides exposure to a wide array of international small-cap companies with a value tilt, offering the potential for higher expected returns while maintaining low turnover and relatively low fees (around 0.36% expense ratio)[1][2][3].
Charles Shriver, a portfolio manager at T. Rowe Price, recently stated that markets are expensive and they have lower return expectations for the next 12 months. In such a market, AVDV's focus on value stocks and smaller market capitalizations could prove to be a wise choice for those seeking better returns than passive indexes but who want to avoid the risks and complexity of fully active stock picking.
The Avantis International Small Cap Value ETF (AVDV) is one of the reasonably priced investments in value stocks, international stocks, small-cap stocks, and high-yield bonds, as highlighted in an article published by Morningstar.com[4]. With its diversified portfolio, strategic selection process, and strong track record, AVDV presents an attractive option for investors seeking a "best of both worlds" strategy: diversified international small-cap exposure, value and profitability focus, and active management's potential to add alpha, all within an ETF structure that remains cost-effective and scalable over a multi-year horizon[1][2][3].
[1] Avantis Investors. (2021). Avantis International Small Cap Value ETF Fact Sheet. Retrieved from https://www.avantisinvestors.com/wp-content/uploads/2021/04/AVDV-Fact-Sheet-April-2021.pdf
[2] Morningstar. (2021). Avantis International Small Cap Value ETF (AVDV). Retrieved from https://www.morningstar.com/us/etfs/AVDV/overview
[3] ETF.com. (2021). Avantis International Small Cap Value ETF (AVDV). Retrieved from https://www.etf.com/ETFs/AVDV
[4] Morningstar.com. (2021). Cheap Value Stocks Are a Great Buy Now. Retrieved from https://www.morningstar.com/articles/1045447/cheap-value-stocks-are-a-great-buy-now
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