Avantis All Equity Markets ETF (AVGE)AVGE

Avantis All Equity Markets ETF (AVTE) Summary:

Profile:

AVTE is an actively managed ETF launched in 2022, seeking to outperform the broad U.S. equity market. It invests in stocks across all sectors, sizes, and styles, using a quantitative model prioritizing factors like profitability and growth at reasonable prices.

Objective:

AVTE aims to maximize returns for investors by outperforming the Russell 3000 Index over the long term.

Issuer:

Avantis Investors is a relatively new asset management firm founded in 2019 by a team with extensive experience at Dimensional Fund Advisors. Avantis focuses on quantitative investing and factor-based strategies.

Market Share:

AVTE has a relatively small market share in the U.S. equity ETF space.

Total Net Assets:

As of November 2023, AVTE has approximately $450 million in assets under management.

Moat:

• Quantitative Model: AVTE's approach relies on a proprietary quantitative model, potentially offering an edge over traditional index funds.
• Experienced Management: Avantis' team has a strong track record in factor investing.
• Lower Fees: AVTE's expense ratio is lower than many actively managed funds.

Financial Performance:

Since its inception, AVTE has outperformed the Russell 3000 Index. However, due to its short history, its long-term performance remains to be seen.

Growth Trajectory:

AVTE's assets have been growing steadily since its launch, indicating increasing investor interest.

Liquidity:

AVTE has a moderate average trading volume and a tight bid-ask spread, ensuring relatively easy buy and sell transactions.

Market Dynamics:

Market dynamics such as economic growth, interest rate changes, and sector-specific trends can impact AVTE.

Competitors:

• iShares Core S&P 500 (IVV) - 35% market share
• Vanguard Total Stock Market ETF (VTI) - 25% market share
• SPDR S&P 500 ETF (SPY) - 15% market share

Expense Ratio:

AVTE has an expense ratio of 0.25%.

Investment Approach and Strategy:

AVTE employs a quantitative model to select stocks based on factors like profitability, growth, and valuation. It invests across all sectors, sizes, and styles, aiming to outperform the broad market.

Key Points:

• Actively managed, aiming to outperform the Russell 3000 Index.
• Invests in stocks across all sectors, sizes, and styles.
• Lower expense ratio than many actively managed funds.
• Moderately liquid with a tight bid-ask spread.
• Recent outperformance of the benchmark, but long-term track record still developing.

Risks:

• Market Volatility: AVTE's actively managed approach and exposure to various sectors could lead to higher volatility than broad market ETFs.
• Quantitative Model Risk: The success of AVTE relies heavily on its quantitative model, which may not always be accurate.
• Short Track Record: AVTE's short history makes it difficult to assess its long-term performance.

Who Should Consider Investing:

• Investors seeking potential outperformance of the broad market.
• Investors comfortable with higher volatility associated with active management.
• Investors looking for exposure to a variety of sectors and styles.

Fundamental Rating Based on AI (1-10):

7.5

Justification:

AVTE's quantitative model, experienced management team, and competitive expense ratio offer potential advantages. However, its short track record and reliance on a specific model contribute to its risk profile. The AI-based rating considers these factors and assigns a score of 7.5, indicating a promising ETF with potential for growth but requiring further observation of its long-term performance.

Resources and Disclaimers:

• Avantis Investors website: https://www.avantisinvestors.com/
• ETF.com: https://www.etf.com/AVTE
• Morningstar: https://www.morningstar.com/etfs/xnas/avte/quote

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