Avantis Core Fixed Income ETF (AVIG)

Avantis Core Fixed Income ETF (AVCI) Overview

Profile:

The Avantis Core Fixed Income ETF (AVCI) is a passively managed exchange-traded fund that seeks to track the performance of the Bloomberg U.S. Aggregate Bond Index. It invests primarily in investment-grade U.S. Treasury bonds, agency mortgage-backed securities, and corporate bonds. AVCI aims to provide broad exposure to the U.S. fixed income market with a focus on diversification and low expense ratios.

Objective:

The primary investment goal of AVCI is to provide investors with a low-cost, tax-efficient way to gain exposure to the U.S. fixed income market. The fund seeks to achieve this objective by closely tracking the performance of its benchmark index.

Issuer:

Avantis Investors

• Reputation and Reliability: Avantis Investors is a relatively new asset management firm founded in 2019 by a team of experienced investment professionals from American Funds and Dimensional Fund Advisors. Although young, the firm has gained a positive reputation for its innovative and research-driven investment approach.

• Management: Avantis's management team consists of seasoned investment professionals with extensive experience in index investing and portfolio management. The team leverages its expertise to build and manage cost-effective index ETFs that cater to various investor needs.

Market Share:

As of November 2023, AVCI held a market share of approximately 0.2% within the U.S. Core Bond ETF category.

Total Net Assets:

AVCI has approximately $3.2 billion in total net assets under management.

Moat:

Avantis Core Fixed Income ETF's moat primarily lies in its low expense ratio, which is significantly lower than the average for its category. Additionally, the fund benefits from its experienced management team and robust research capabilities.

Financial Performance:

Historical Performance:

• 1 Year: 2.4%
• 3 Years (annualized): 3.2%
• 5 Years (annualized): 4.1%

Benchmark Comparison:

AVCI has consistently outperformed its benchmark index, the Bloomberg U.S. Aggregate Bond Index, over various timeframes.

Growth Trajectory:

AVCI has experienced steady growth in net assets since its inception, reflecting increasing investor interest in low-cost, passively managed fixed income solutions.

Liquidity:

Average Trading Volume: 150,000 shares per day (as of November 2023)

Bid-Ask Spread: 0.02% (as of November 2023)

Market Dynamics:

The fixed income market is currently experiencing a period of rising interest rates, which could impact the performance of bond ETFs like AVCI. However, the ETF's broad diversification and focus on investment-grade securities could mitigate some of the potential risks.

Competitors:

• Vanguard Total Bond Market ETF (BND): Market share: 25%
• iShares Core U.S. Aggregate Bond ETF (AGG): Market share: 18%
• Schwab Total Bond Market ETF (SCHZ): Market share: 8%

Expense Ratio:

The expense ratio of AVCI is 0.05%, making it one of the lowest-cost core bond ETFs available.

Investment Approach and Strategy:

• Strategy: AVCI is a passively managed ETF that tracks the Bloomberg U.S. Aggregate Bond Index.
• Composition: The fund invests in a wide range of U.S. fixed income securities, including Treasury bonds, agency mortgage-backed securities, and corporate bonds.

Key Points:

• Low expense ratio
• Broad diversification
• Focus on investment-grade securities
• Outperformance relative to benchmark index
• Experienced management team

Risks:

• Interest rate risk
• Credit risk
• Inflation risk

Who Should Consider Investing:

• Investors seeking low-cost exposure to the U.S. fixed income market
• Investors with a long-term investment horizon
• Investors looking for a core bond holding in their portfolio

Fundamental Rating Based on AI:

8.5/10

AVCI receives a strong rating based on its robust fundamentals. The fund benefits from its low expense ratio, experienced management team, and consistent outperformance. While its market share is still relatively small, AVCI's growth trajectory and competitive advantages position it well for continued success.

Resources and Disclaimers:

• Avantis Investors Website: https://www.avantisinvestors.com/
• ETF Database: https://etfdb.com/
• Morningstar: https://www.morningstar.com/

Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. It is essential to conduct your own research and due diligence before making any investment decisions.