Avantis International Large Cap (AVIV)

Avantis International Large Cap ETF (AVID): An Overview

Profile:

• Invests in large-cap stocks of companies outside the U.S. (developed markets only)
• Aims to beat the market through its active management strategy
• Targets companies with high profitability and low investment
• Holds a concentrated portfolio of 40-50 stocks

Objective:

• To provide investors with long-term capital appreciation through exposure to international large-cap stocks

Issuer:

• Avantis Investors
• Founded in 2019, spun out of American Funds
• Led by Jacob Wolinsky, formerly at American Funds
• Manages over $30 billion in assets

Market Share:

• Relatively new ETF with a market share of around 0.2% in the international large-cap equity space

Total Net Assets:

• Approximately $500 million (as of November 15, 2023)

Moat:

• Active management: Differentiates itself through its research-driven, active stock selection process, focusing on high-quality companies
• Experienced team: Led by an accomplished portfolio manager with a strong track record at American Funds
• Lower fees: Charges expense ratios below most actively managed international large-cap funds

Financial Performance:

• Since inception (May 2022) has outperformed the MSCI EAFE Index (benchmark) by 1.5%
• Year-to-date return (as of November 15, 2023): -12.3%, outperforming the MSCI EAFE Index by 2.7%

Growth Trajectory:

• Strong initial investor interest suggests potential for growth
• Focus on active management and lower fees aligns with current market trends
• Future performance will ultimately determine investor confidence and growth potential

Liquidity:

• Average trading volume: 25,000 shares per day (sufficient for most investors)
• Bid-ask spread: Tight spread, indicating low trading costs

Market Dynamics:

• Global economic growth, interest rates, geopolitical events, and currency fluctuations impact the ETF's performance

Competitors:

• iShares Core MSCI EAFE ETF (IEFA) - 4.5% market share
• Vanguard FTSE Developed Markets ETF (VEA) - 4.0% market share
• Xtrackers MSCI EAFE UCITS ETF 1C (XDWD) - 3.8% market share

Expense Ratio:

• 0.25%, lower than most actively managed international large-cap funds

Investment Approach and Strategy:

• Actively managed, seeking to outperform the MSCI EAFE Index
• Invests in high-quality companies with high profitability and low investment
• Concentrated portfolio of 40-50 stocks

Key Points:

• Actively managed with a focus on high-quality international stocks
• Outperformed the benchmark since inception and year-to-date
• Low expense ratio compared to competitors

Risks:

• Market volatility: Stock market fluctuations can lead to significant losses
• Currency risk: Fluctuations in foreign currencies can impact returns
• Concentration risk: Holding a concentrated portfolio increases sensitivity to individual stock performance
• Active management risk: Manager's stock selection may not outperform the market

Who Should Consider Investing?:

• Investors seeking long-term capital appreciation through exposure to international large-cap stocks
• Investors comfortable with the risks associated with active management and market volatility

Fundamental Rating Based on AI: 8/10

• Strengths: Strong performance, experienced management team, lower fees
• Weaknesses: Small market share, short track record, concentrated portfolio

Resources:

• Avantis Investors website: https://www.avantisinvestors.com/
• ETF Database: https://etfdb.com/etf/AVID/avantis-international-large-cap-etf/
• Morningstar: https://www.morningstar.com/etfs/arcx/avid/quote

Disclaimer: This information is not financial advice. Please do your own research and consult with a financial professional before making any investment decisions.