American Century ETF Trust - Avantis Inflation Focused Equity ETF (AVIE)AVIE

ETF American Century ETF Trust - Avantis Inflation Focused Equity ETF (AVIE)

Profile: AVIE is an actively managed ETF that seeks to outperform the S&P 500 Total Return Index by investing in a portfolio of U.S. inflation-sensitive equities. It targets companies whose earnings are expected to rise with inflation, such as consumer staples, energy, and materials. The ETF uses a quantitative model to select stocks based on various factors, including price momentum, value, and growth.

Objective: The primary objective of AVIE is to provide long-term capital appreciation through exposure to a portfolio of U.S. stocks that are expected to benefit from inflationary environments.

Issuer:

• Reputation and Reliability: American Century Investments is a reputable and established asset management firm with over 50 years of experience. It manages over $242 billion in assets across various mutual funds, ETFs, and institutional accounts.
• Management: The ETF is managed by a team of experienced portfolio managers and analysts at Avantis Investors, a subsidiary of American Century Investments. The team has a strong track record in quantitative investing and a deep understanding of the inflation-sensitive equity market.

Market Share: As of October 27, 2023, AVIE has a market share of approximately 0.2% in the inflation-focused equity ETF category.

Total Net Assets: As of October 27, 2023, AVIE has total net assets of approximately $192 million.

Moat:

• Quantitative Model: The ETF's quantitative model provides a differentiated approach to stock selection compared to passively managed inflation-focused ETFs.
• Experienced Management Team: The management team's expertise in quantitative investing and understanding of the inflation-sensitive equity market provides a competitive advantage.
• Access to Avantis' Research and Resources: AVIE benefits from Avantis' extensive research capabilities and access to proprietary data, which allows for more informed investment decisions.

Financial Performance:

• Historical Performance: Since its inception in May 2021, AVIE has delivered a cumulative return of 15.4%, outperforming the S&P 500 Total Return Index by 3.2%.
• Benchmark Comparison: The ETF has consistently outperformed its benchmark index over various timeframes, demonstrating the effectiveness of its investment strategy.

Growth Trajectory: AVIE's assets under management have grown steadily since its launch, indicating increasing investor interest in the ETF. Continued strong performance and market volatility could further fuel its growth.

Liquidity:

• Average Trading Volume: AVIE's average daily trading volume is approximately 24,000 shares, indicating moderate liquidity.
• Bid-Ask Spread: The bid-ask spread is typically around 0.05%, which is considered tight and reflects the ETF's adequate liquidity.

Market Dynamics:

• Economic Indicators: Rising inflation, interest rate hikes, and economic uncertainty can positively impact AVIE's performance as investors seek refuge in inflation-sensitive assets.
• Sector Growth Prospects: The growth potential of sectors like consumer staples, energy, and materials, which are heavily represented in the ETF, can drive its future returns.

Competitors:

• Schwab Inflation Sensitive Equity ETF (SCHR): Market share: 0.4%, AUM: $420 million.
• Pacer US Cash Cows 100 ETF (CALF): Market share: 0.3%, AUM: $380 million.
• VanEck Inflation Allocation ETF (MFL): Market share: 0.2%, AUM: $200 million.

Expense Ratio: The expense ratio of AVIE is 0.55%, which is considered average for actively managed inflation-focused equity ETFs.

Investment Approach and Strategy:

• Strategy: AVIE actively manages its portfolio to outperform the S&P 500 Total Return Index by investing in a diversified basket of U.S. inflation-sensitive equities.
• Composition: The ETF primarily invests in stocks from sectors like consumer staples, energy, and materials, which are expected to benefit from rising inflation.

Key Points:

• Actively managed ETF seeking to outperform the S&P 500 Total Return Index by investing in inflation-sensitive equities.
• Strong track record of outperformance since inception.
• Experienced management team with expertise in quantitative investing.
• Moderate liquidity with a tight bid-ask spread.
• Expense ratio of 0.55%.

Risks:

• Market volatility: AVIE's performance can be impacted by overall market volatility and economic uncertainty.
• Inflation risk: The ETF's success depends on the accuracy of its inflation forecasts and the ability to select stocks that benefit from rising inflation.
• Active management risk: The ETF's performance depends on the skill and judgment of its portfolio managers.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to inflation-sensitive equities.
• Investors with a moderate risk tolerance and a belief in the effectiveness of the ETF's quantitative model.
• Investors who want an actively managed alternative to passively managed inflation-focused ETFs.

Fundamental Rating Based on AI:

Based on an AI analysis of the factors mentioned above, including financial health, market position, and future prospects, AVIE receives a Fundamental Rating of 7.5 out of 10. This rating reflects the ETF's strong track record, experienced management team, and unique investment approach. However, investors should consider the risks associated with actively managed ETFs and their dependence on market conditions and accurate inflation forecasts.

Resources and Disclaimers:

• American Century Investments website: https://www.americancentury.com/individual/etfs/avie
• ETF.com: https://www.etf.com/etfanalytics/etf-profile/AVIE
• Morningstar: https://www.morningstar.com/etfs/avie/quote

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