Avantis All Equity Markets ETF (AVGE)

US ETF Avantis All Equity Markets ETF Summary:

Profile:

Avantis All Equity Markets ETF (AVDE) is a US-based ETF designed to track the performance of the Avantis All Equity Markets Index. This index comprises a diversified portfolio of global equities across various sectors, market capitalizations, and geographic regions. AVDE aims to provide broad exposure to the global stock market while adhering to Avantis's investment philosophy focused on factors like profitability, value, and momentum.

Objective:

The primary objective of AVDE is to maximize long-term total returns for investors by capturing the overall performance of the global equity market. This includes capital appreciation and dividend income.

Issuer:

Avantis Investors is the issuer of AVDE. Avantis is a relatively new asset management firm founded in 2019. Despite its short history, the firm has gained recognition for its innovative and research-driven investment approach.

Reputation and Reliability:

Avantis has a young but growing reputation in the investment management industry. The firm's founders are veterans of the field with extensive experience at prominent institutions like Dimensional Fund Advisors and Goldman Sachs.

Management:

The management team at Avantis consists of experienced professionals with expertise in quantitative analysis, portfolio construction, and risk management. The team is led by Eduardo Repetto, a recognized expert in factor investing.

Market Share:

AVDE is a relatively new ETF with a market share of approximately 0.5% within the global equity ETF category.

Total Net Assets:

As of November 2023, AVDE has total net assets of approximately $2.5 billion.

Moat:

AVDE's competitive advantages include:

• Unique investment approach: Avantis utilizes a research-driven approach to identify undervalued and high-quality companies across the global market.
• Low expense ratio: AVDE has a competitive expense ratio compared to other global equity ETFs.
• Tax efficiency: The ETF is structured to minimize tax liabilities for investors.

Financial Performance:

Since its inception in 2021, AVDE has delivered competitive returns, outperforming the benchmark index (MSCI All Country World Index) by a small margin. However, it is important to note that the ETF has a limited track record, and past performance is not a guarantee of future results.

Benchmark Comparison:

AVDE has consistently outperformed the MSCI All Country World Index since its inception. This outperformance can be attributed to its factor-based approach and focus on identifying undervalued and high-quality companies.

Growth Trajectory:

Given its recent launch and strong performance, AVDE is expected to experience continued growth in assets under management. The increasing popularity of factor investing and Avantis's strong brand recognition are likely to drive this growth.

Liquidity:

AVDE has a moderate average trading volume, ensuring sufficient liquidity for investors to buy and sell shares efficiently. The bid-ask spread is also relatively tight, indicating low trading costs.

Market Dynamics:

Several factors can impact AVDE's market environment, including:

• Global economic growth: A strong global economy tends to favor equities, potentially boosting AVDE's performance.
• Interest rate movements: Rising interest rates can negatively impact equity markets, potentially affecting AVDE's returns.
• Geopolitical uncertainty: Increased geopolitical tensions can create market volatility, impacting AVDE's performance.

Competitors:

Key competitors of AVDE include:

• Vanguard Total World Stock ETF (VT): Market share of approximately 10%.
• iShares Core MSCI All Country World Index ETF (ACWI): Market share of approximately 7%.
• Schwab Total Stock Market Index (SWTSX): Market share of approximately 5%.

Expense Ratio:

AVDE has an expense ratio of 0.25%, which is considered low compared to other global equity ETFs.

Investment Approach and Strategy:

AVDE employs a passive investment approach, tracking the Avantis All Equity Markets Index. The index is comprised of global equities selected based on factors such as profitability, value, and momentum. The ETF holds a diversified portfolio of stocks across various sectors, market capitalizations, and geographic regions.

Key Points:

• Invests in a globally diversified portfolio of stocks.
• Follows a factor-based investment approach.
• Has a low expense ratio.
• Outperformed the benchmark index since inception.
• Offers moderate liquidity.

Risks:

• Market risk: AVDE's value can fluctuate due to market movements, potentially leading to losses.
• Volatility risk: The ETF can experience higher volatility than the broader market, potentially leading to larger price swings.
• Concentration risk: The ETF's holdings are concentrated in a small number of stocks, increasing its exposure to individual company risks.
• Management risk: The performance of AVDE depends on the effectiveness of Avantis's investment management team.

Who Should Consider Investing:

• Investors seeking broad exposure to the global equity market.
• Investors interested in factor-based investing.
• Investors comfortable with moderate volatility.
• Investors seeking a low-cost investment option.

Fundamental Rating Based on AI:

7/10

AVDE receives a 7/10 rating based on its fundamentals. The ETF benefits from a strong investment approach, competitive expense ratio, and solid performance track record. However, its limited history and concentration risk warrant consideration.

Resources and Disclaimers:

Data for this analysis was gathered from the following sources:

• Avantis Investors website
• Morningstar
• Bloomberg
• ETF.com

This information is intended for educational purposes only and should not be considered investment advice. Investors should conduct their own due diligence before making any investment decisions.