Avantis All Equity Markets ETF (AVGE)

Overview

The Avantis All Equity Markets ETF (AVGE) aims to provide long-term capital appreciation by investing in a broad and diverse portfolio of U.S. and international equity securities. It employs a market-cap-weighted approach with considerations for profitability and value characteristics.

Reputation and Reliability

Avantis Investors is a relatively new but well-regarded firm backed by American Century Investments. They are known for their systematic, value-oriented investment strategies.

Management Expertise

The management team consists of experienced investment professionals with expertise in quantitative and factor-based investing.

Goal

To seek long-term capital appreciation by investing in a broad portfolio of equity securities across global markets.

Investment Approach and Strategy

Strategy: The ETF uses a market-cap-weighted approach with tilts towards companies with smaller market capitalization and higher profitability relative to their price, with a focus on long-term value.

Composition The ETF primarily holds a diversified portfolio of global stocks, including both developed and emerging market equities.

Market Share: AVGE's market share is growing but relatively small compared to established broad market ETFs.

Total Net Assets (AUM): 2800000000

Key Competitors

• Vanguard Total World Stock ETF (VT)
• iShares MSCI ACWI ETF (ACWI)
• Schwab Total Stock Market ETF (SCHB)
• iShares Core S&P Total U.S. Stock Market ETF (ITOT)

Competitive Landscape

The ETF market for global equities is highly competitive, dominated by low-cost, passively managed ETFs from Vanguard and iShares. AVGE's competitive advantage lies in its factor-based approach, targeting profitability and value, potentially offering higher returns than pure market-cap-weighted ETFs. However, this active strategy may also result in higher volatility and higher fees compared to passive counterparts.

Historical Performance: Returns vary, but the ETF aims to outperform a broad global equity market cap weighted benchmark due to its value and profitability tilts.

Benchmark Comparison: The ETF's performance should be compared to a broad global equity index, like the MSCI ACWI IMI, to assess its effectiveness. The benchmark return data can be derived directly from MSCI.

Expense Ratio: 0.18

Average Trading Volume

The ETF's average trading volume is moderate, which can affect the ease of buying or selling large quantities of shares.

Bid-Ask Spread

The bid-ask spread is generally tight, indicating reasonable liquidity and lower transaction costs for typical investors.

Market Environment Factors

Economic growth, interest rates, inflation, and geopolitical events influence global equity markets and AVGE's performance. Sector growth prospects and investor sentiment also play a role.

Growth Trajectory

The ETF's growth depends on continued investor demand for factor-based global equity exposure. Changes in the underlying index or investment strategy could also affect its growth trajectory.

Competitive Edge

AVGE's competitive edge is its systematic approach that focuses on profitability and value factors, which are expected to provide higher risk-adjusted returns over the long term. This sets it apart from passive market-cap-weighted ETFs. Additionally, Avantis' investment approach is based on academic research and well-defined processes. It has a differentiated approach and can outperform its passive peers over a long time horizon. The approach is not guaranteed to be successful, but it has the potential to provide higher returns compared to passive investments.

Volatility

The ETF's volatility is likely to be comparable to a broad global equity market index, with potential for higher volatility due to its factor tilts.

Market Risk

Market risk is the primary risk, as the ETF invests in equities and is subject to fluctuations in global stock markets. Specific risks associated with the ETFu2019s underlying assets include the impact of changing global economic conditions on profitability and value stocks.

Ideal Investor Profile

The ideal investor is a long-term investor seeking broad global equity exposure with a tilt towards value and profitability, willing to accept potentially higher volatility and expense ratio for potentially higher returns.

Market Risk

The ETF is best suited for long-term investors seeking capital appreciation and diversification.

The Avantis All Equity Markets ETF (AVGE) provides broad global equity exposure with a focus on value and profitability factors through the use of an optimization of academic research. It offers a systematic approach, and it is designed to outperform passive market-cap-weighted indexes. The ETF is suitable for long-term investors seeking capital appreciation and diversified exposure, with the added benefit of potential excess returns from factor tilts. While its expense ratio is slightly higher compared to traditional passive funds, its potential for enhanced returns may justify the higher cost for some investors. The ETF's success depends on the continued effectiveness of its factor-based approach and its capacity to weather market volatility.

Data Sources:

• Avantis Investors Website
• ETF.com
• Morningstar
• MSCI

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Market share data is estimated and may not be precise. Investors should consult with a qualified financial advisor before making any investment decisions. Performance is not indicative of future results.