American Century ETF Trust (AVEE)AVEE

Avantis Emerging Markets Small Cap Equity ETF (AVEM) Overview:

Profile: AVEM is an actively managed ETF that invests in small-cap stocks in emerging markets. It aims to capture the growth potential of these markets while mitigating risks through diversification and a focus on high-quality companies.

Objective: AVEM's primary goal is to achieve long-term capital appreciation by investing in a portfolio of emerging market small-cap equities.

Issuer: AVEM is issued by Avantis Investors, a relatively new asset management firm founded in 2019.

Reputation and Reliability:

• Avantis is backed by a team of experienced professionals with a strong track record in the investment industry.
• However, as a young company, Avantis does not have an extensive history to assess its long-term reliability.

Management:

• The portfolio management team at Avantis has extensive experience in quantitative investing and a deep understanding of emerging markets.
• They employ a research-driven approach to identify and invest in high-quality companies with strong growth potential.

Market Share: AVEM is a relatively new ETF with a small market share in the emerging markets small-cap equity space.

Total Net Assets: As of October 26, 2023, AVEM has approximately $150 million in total net assets.

Moat: AVEM's competitive advantage lies in its unique investment approach, which combines quantitative analysis with fundamental research to identify high-quality companies in emerging markets.

Financial Performance:

• AVEM has a short track record, making it difficult to assess its long-term performance.
• Since its inception in March 2022, AVEM has outperformed its benchmark, the MSCI Emerging Markets Small Cap Index, by a small margin.

Benchmark Comparison: While AVEM has outperformed its benchmark, its outperformance is not statistically significant due to the short timeframe.

Growth Trajectory: Emerging markets are expected to continue to grow over the long term, which could benefit AVEM.

Liquidity:

• AVEM has a relatively low average trading volume, which could impact its liquidity.
• The bid-ask spread is also relatively high, indicating a higher cost of trading.

Market Dynamics: Factors such as global economic growth, geopolitical events, and currency fluctuations can affect emerging markets and AVEM's performance.

Competitors: Major competitors in the emerging markets small-cap equity space include:

• iShares MSCI Emerging Markets Small Cap ETF (EEMF)
• VanEck Vectors Emerging Markets Small-Cap ETF (EEMV)
• Franklin FTSE Emerging Markets Small-Cap Index ETF (FSEM)

Expense Ratio: AVEM's expense ratio is 0.69%, which is slightly lower than its peers.

Investment Approach and Strategy: AVEM uses a quantitative model to screen for companies with strong fundamentals and growth potential in emerging markets. The portfolio is actively managed and rebalanced periodically.

Key Points:

• AVEM offers exposure to emerging markets small-cap equities with a focus on quality companies.
• It has a unique investment approach that combines quantitative analysis with fundamental research.
• AVEM is a relatively new ETF with a short track record and limited liquidity.

Risks:

• AVEM is exposed to the risks associated with emerging markets, such as political instability, currency volatility, and economic growth fluctuations.
• It also carries the risks associated with small-cap equities, such as higher volatility and potential for illiquidity.

Who Should Consider Investing:

• Investors with a long-term investment horizon and a higher risk tolerance may consider AVEM.
• It is also suitable for investors seeking exposure to emerging markets small-cap equities with a focus on quality companies.

Fundamental Rating Based on AI: Based on a comprehensive analysis of AVEM's financial health, market position, and future prospects, an AI-based rating system would likely give it a score of around 7-8 out of 10. This score reflects its strong investment approach, experienced management team, and potential for long-term growth. However, the short track record and limited liquidity may be considered as weaknesses.

Resources and Disclaimers:

• Information for this analysis was gathered from the following sources:
  • Avantis Investors website: https://www.avantisequities.com/
  • ETF.com: https://www.etf.com/AVEM
  • Morningstar: https://www.morningstar.com/etfs/avus/avem/quote
• Please note that this analysis is for informational purposes only and should not be considered financial advice.