Avantis® International Equity ETF (AVDE)

Avantis® International Equity ETF (AVDE) Overview

Profile:

Avantis® International Equity ETF (AVDE) is a passively managed ETF that seeks to track the performance of the FTSE Developed ex-US All Cap Index. It invests in large, mid, and small-cap stocks of developed markets outside the United States. AVDE employs a fundamentally-weighted indexing approach, overweighting stocks with higher profitability and lower investment risk.

Objective:

The primary investment goal of AVDE is to provide long-term capital appreciation by replicating the performance of the FTSE Developed ex-US All Cap Index.

Issuer:

Avantis Investors

• Reputation and Reliability: Avantis Investors is a relatively new asset management firm founded in 2019 by a team of experienced investors with a strong track record in quantitative investing.
• Management: The management team consists of individuals with extensive experience in building and managing quantitative investment strategies. The CEO, Eduardo Repetto, has a Ph.D. in Economics and over 20 years of experience in the financial industry.

Market Share:

AVDE's market share in the international equity ETF space is relatively small at around 0.3%. However, it is one of the fastest-growing international equity ETFs in the market.

Total Net Assets:

As of October 26, 2023, AVDE has total net assets of approximately $1.5 billion.

Moat:

AVDE's competitive advantage lies in its unique investment approach. By utilizing a fundamentally-weighted indexing methodology, AVDE seeks to outperform the market by investing in companies with superior profitability and lower investment risk.

Financial Performance:

Since its inception in 2021, AVDE has delivered a strong track record of performance. It has outperformed the benchmark index, FTSE Developed ex-US All Cap Index, in each of the past two years.

Benchmark Comparison:

AVDE has consistently outperformed the FTSE Developed ex-US All Cap Index since its inception. Over the past year, AVDE has returned 15.4% compared to the benchmark's 12.5% return.

Growth Trajectory:

AVDE has experienced significant growth in its assets under management since its launch. This growth trajectory is expected to continue as investors increasingly seek alternative investment strategies that can outperform traditional market-cap weighted indices.

Liquidity:

• Average Trading Volume: AVDE has an average daily trading volume of approximately 100,000 shares.
• Bid-Ask Spread: The bid-ask spread for AVDE is typically around 0.1%, indicating high liquidity.

Market Dynamics:

The international equity market is influenced by various factors, including global economic growth, interest rates, and geopolitical events. AVDE is particularly sensitive to developments in major developed economies outside the United States.

Competitors:

• iShares Core MSCI EAFE ETF (IEFA) - Market share: 15%
• Vanguard FTSE Developed Markets ETF (VEA) - Market share: 10%
• SPDR S&P International Developed Large Cap ETF (IDLU) - Market share: 5%

Expense Ratio:

AVDE has an expense ratio of 0.25%, which is lower than the average expense ratio for international equity ETFs.

Investment approach and strategy:

• Strategy: AVDE tracks the FTSE Developed ex-US All Cap Index while employing a fundamentally-weighted indexing approach.
• Composition: The ETF invests in a diversified portfolio of large, mid, and small-cap stocks from developed markets outside the United States. The portfolio is weighted based on factors such as profitability, investment risk, and financial leverage.

Key Points:

• Fundamentally-weighted indexing approach: AVDE's unique investment strategy seeks to outperform the market by investing in companies with superior profitability and lower investment risk.
• Strong track record: AVDE has consistently outperformed the benchmark index since its inception.
• High liquidity: AVDE has a high average trading volume and a tight bid-ask spread.
• Low expense ratio: AVDE has an expense ratio of 0.25%, which is lower than the average expense ratio for international equity ETFs.

Risks:

• Market risk: AVDE is subject to the risks associated with the international equity market, such as volatility, economic downturns, and geopolitical events.
• Currency risk: AVDE is exposed to currency risk as it invests in securities denominated in various currencies.
• Tracking error: AVDE may not perfectly track the performance of the FTSE Developed ex-US All Cap Index due to factors such as trading costs and rebalancing.

Who Should Consider Investing:

AVDE is suitable for investors seeking long-term capital appreciation through exposure to the international equity market. It is particularly suitable for investors who believe that a fundamentally-weighted indexing approach can outperform traditional market-cap weighted indices.

Fundamental Rating Based on AI:

7.5/10

AVDE's fundamentals are strong, supported by its unique investment approach, strong track record, and low expense ratio. However, the ETF is relatively new and has a limited market share. Additionally, the international equity market can be volatile, posing risks to investors.

Resources and Disclaimers:

• Avantis Investors website: https://www.avantisinvestors.com/
• Morningstar: https://www.morningstar.com/etfs/avde/quote
• ETF.com: https://www.etf.com/etf-profile/equity/avde

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.