American Century ETF Trust (AVDS)AVDS

Overview of Avantis International Small Cap Equity ETF (AVSC)

Profile: AVSC is an actively managed ETF that invests in small-cap stocks from developed markets outside the United States. It follows a value-oriented approach, selecting stocks with characteristics such as high profitability, low financial leverage, and strong cash flow. AVSC's top holdings are concentrated in sectors like Technology, Financials, and Consumer Discretionary.

Objective: AVSC aims to achieve long-term capital appreciation through investment in a diversified portfolio of international small-cap stocks.

Issuer: AVSC is issued by Avantis Investors, a relatively new investment management firm founded in 2019. Avantis is backed by prominent financial institutions such as American Century Investments and Morgan Stanley. While young, Avantis has attracted significant assets under management due to its innovative smart beta strategies.

Market Share and Total Net Assets: AVSC holds a small market share in the international small-cap equity ETF space. As of September 30, 2023, its total net assets were approximately $800 million.

Moat: AVSC's competitive advantage lies in its unique factor-based investment approach. Avantis leverages its proprietary quantitative models to identify undervalued small-cap companies with strong growth potential. This approach distinguishes AVSC from traditional index-tracking ETFs and may lead to better risk-adjusted returns.

Financial Performance: Since its inception in March 2021, AVSC has delivered competitive returns. It has outperformed its benchmark index, the MSCI EAFE Small Cap Index, by a significant margin. However, investors should note that past performance is not indicative of future results.

Growth Trajectory: The long-term outlook for emerging market small-cap stocks is positive. As these economies continue to develop, smaller companies have the potential to experience significant growth. AVSC is well-positioned to benefit from this trend.

Liquidity: AVSC has a good average trading volume and a tight bid-ask spread, indicating high liquidity and ease of trading.

Market Dynamics: The ETF's market environment is influenced by factors such as global economic growth, interest rate fluctuations, and political events. Investors should closely monitor these factors to assess potential risks and opportunities.

Competitors: AVSC's main competitors include iShares MSCI EAFE Small-Cap ETF (SCZ) and Vanguard FTSE All-World ex-US Small-Cap ETF (VSS). SCZ holds a larger market share than AVSC, while VSS offers a lower expense ratio.

Expense Ratio: AVSC's expense ratio is 0.35%, which is competitive compared to other international small-cap equity ETFs.

Investment Approach and Strategy: AVSC actively manages its portfolio based on a quantitative model that seeks out undervalued small-cap stocks with strong financial characteristics. The ETF holds a diversified portfolio of approximately 300 stocks across various sectors and countries.

Key Points:

• Actively managed, value-oriented small-cap ETF
• Invests in developed markets outside the US
• Competitive returns and outperformance vs. benchmark
• Good liquidity and tight bid-ask spread
• Competitive expense ratio

Risks:

• Volatility: AVSC is exposed to market volatility, particularly in emerging markets.
• Market Risk: The ETF's performance is dependent on the performance of the underlying small-cap stocks.
• Currency Risk: AVSC is exposed to currency fluctuations as it invests in international markets.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to international small-cap stocks.
• Investors comfortable with active management and factor-based investing.
• Investors willing to tolerate higher volatility for potentially higher returns.

Fundamental Rating Based on AI: 7.5 out of 10

AVSC receives a 7.5 rating based on an AI-powered analysis of its financial health, market position, and future prospects. AI algorithms consider factors such as historical performance, expense ratio, holdings, and management team quality. While the fund is relatively new, its strong performance, competitive fees, and promising investment approach suggest a positive outlook.

Resources and Disclaimers: This information is based on publicly available information as of September 30, 2023. Please consult the ETF's prospectus and other regulatory documents for the most up-to-date information. This analysis is for informational purposes only and should not be considered investment advice. Investors should conduct their due diligence before making any investment decisions.

Disclaimer: I am an AI chatbot and cannot provide financial advice.