Avantis® Emerging Markets Equity ETF (AVEM)

Overview

The Avantis Emerging Markets Equity ETF (AVEM) seeks to provide long-term capital appreciation by investing primarily in emerging market equity securities. It employs a quantitative investment process, aiming to capture the potential growth offered by companies in developing economies, focusing on factors such as value, size, and momentum.

Reputation and Reliability

Avantis ETFs, part of American Century Investments, are known for their quantitative-driven investment approach. American Century Investments has a long-standing reputation in the asset management industry, emphasizing disciplined and research-based strategies.

Management Expertise

The ETF is managed by Avantis Investors, a team within American Century Investments with significant expertise in quantitative portfolio management and a deep understanding of factor-based investing.

Goal

The primary investment goal of the Avantis Emerging Markets Equity ETF is to achieve long-term capital growth.

Investment Approach and Strategy

Strategy: AVEM aims to track the performance of an index that represents emerging market equities, but it does not passively replicate an index. Instead, it uses a quantitative approach to select securities based on specific factors that have historically been associated with higher returns.

Composition The ETF primarily holds common stocks of companies located in emerging market countries. Its holdings are diversified across various sectors and geographies within emerging markets, with a focus on companies exhibiting characteristics of value, size, and momentum.

Market Share: Specific market share data for AVEM within the emerging markets ETF sector is not readily available in a standardized public format, but it is a growing player in this segment.

Total Net Assets (AUM): 2500000000

Key Competitors

• Vanguard FTSE Emerging Markets ETF (VWO)
• iShares Core MSCI Emerging Markets ETF (IEMG)
• iShares MSCI Emerging Markets Small-Cap ETF (EEMS)
• Schwab Emerging Markets Equity ETF (SCHE)

Competitive Landscape

The emerging markets ETF landscape is highly competitive, dominated by large players like Vanguard and iShares. Avantis competes by offering a differentiated, factor-based approach which may appeal to investors seeking a more refined selection of emerging market equities beyond simple market-cap weighting. Its advantage lies in its quantitative methodology and potential for enhanced returns through factor tilting, while its disadvantage might be its relatively smaller AUM and shorter track record compared to established giants.

Historical Performance: AVEM has demonstrated solid historical performance since its inception, often outperforming broad emerging markets benchmarks due to its factor-based strategy. For example, its 1-year, 3-year, and 5-year annualized returns have been competitive.

Benchmark Comparison: AVEM typically aims to outperform broad emerging market indices by systematically identifying and investing in securities that exhibit desirable factor characteristics. Performance relative to benchmarks like the MSCI Emerging Markets Index has been a key focus for investors evaluating this ETF.

Expense Ratio: 0.35

Average Trading Volume

The ETF exhibits healthy average daily trading volume, indicating good liquidity for most investors.

Bid-Ask Spread

The bid-ask spread for AVEM is generally tight, reflecting efficient market pricing and low transaction costs for active traders.

Market Environment Factors

Emerging markets are influenced by global economic growth, commodity prices, geopolitical stability, currency fluctuations, and domestic policy changes. AVEM's performance is thus tied to these broad factors, as well as the specific growth prospects within the emerging economies it invests in.

Growth Trajectory

Avantis has shown a consistent growth trajectory since its inception, attracting significant assets under management. Its strategy has remained focused on factor investing, with adjustments to holdings based on ongoing quantitative analysis of market conditions and security characteristics.

Competitive Edge

AVEM's competitive edge stems from its sophisticated quantitative methodology, which systematically targets factors like value, size, and momentum to identify potentially mispriced securities in emerging markets. This disciplined, research-driven approach aims to deliver diversified exposure while potentially enhancing returns beyond passive index tracking. The backing of American Century Investments further lends credibility and operational strength to the fund.

Volatility

As an emerging markets ETF, AVEM exhibits higher historical volatility compared to developed market ETFs due to the inherent risks in these economies, including political instability, currency depreciation, and less developed regulatory environments.

Market Risk

The specific market risks for AVEM include fluctuations in emerging market currencies against the US dollar, potential for sovereign debt defaults, and varying levels of economic development and market transparency across the countries it invests in. Geopolitical events can also significantly impact emerging market performance.

Ideal Investor Profile

The ideal investor for AVEM is one seeking long-term capital appreciation from emerging markets, with a tolerance for higher volatility and a belief in the potential of factor-based investing. Investors should have a moderate to aggressive risk tolerance.

Market Risk

AVEM is best suited for long-term investors who are looking to diversify their portfolio with exposure to high-growth emerging markets and believe in the efficacy of systematic, quantitative investment strategies to potentially enhance returns.

The Avantis Emerging Markets Equity ETF (AVEM) offers a quantitatively driven approach to capturing long-term growth from emerging markets. It seeks to outperform broad emerging market benchmarks by focusing on factors such as value, size, and momentum. While subject to higher volatility inherent in emerging economies, AVEM provides a disciplined strategy for investors with a long-term horizon and a moderate to aggressive risk tolerance, backed by the expertise of Avantis Investors.

Data Sources:

• Avantis Investors Official Website
• Financial Data Aggregators (e.g., Morningstar, ETF.com)
• SEC Filings

Disclaimers:

This JSON output is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investors should consult with a financial advisor before making any investment decisions. Data accuracy is based on available public information and may be subject to change.