American Century ETF Trust - Avantis U.S. Large Cap Value ETF (AVLV)

ETF American Century ETF Trust - Avantis U.S. Large Cap Value ETF (AVLV)

Profile

The American Century ETF Trust - Avantis U.S. Large Cap Value ETF (AVLV) is a passively managed exchange-traded fund (ETF) that tracks the performance of the Avantis U.S. Large Cap Value Index. This index focuses on large-cap U.S. companies with high value characteristics, such as low price-to-book ratios and healthy dividend yields. AVLV invests primarily in these types of stocks, offering investors an efficient way to gain exposure to large-cap value equities.

Investment Goal & Strategy

Investment Goal: AVLV's primary investment goal is to track the total return performance of the Avantis U.S. Large Cap Value Index while keeping expenses low.

Investment Strategy: AVLV employs a full replication methodology, investing directly in all the components of the underlying index in the same weightings. This ensures close tracking of the index's returns. The ETF holds a diversified portfolio of around 380 individual securities across various sectors with a value tilt.

Issuer: American Century Investments

Reputation & Reliability: Founded in 1958, American Century Investments possesses a strong reputation and a long and successful track record in the investment management industry. The firm manages over $231.3 billion in assets across various mutual funds, ETFs, and institutional products (as of September 30, 2023).

Management: The Avantis Investors team, led by Chief Investment Officer Richard Bookstaber, manages AVLV. The team brings extensive experience and deep knowledge in quantitative investing and factor strategies.

Market Share & Assets

In the large-cap value ETF category, AVLV has approximately 0.5 % market share. As of November 2023, it has over $4.9 billion in total net assets.

Moat

AVLV's moats include:

• Low fees: With an expense ratio of only 0.25%, AVLV stands out as a cost-effective option in the large-cap value ETF space. This allows investors to keep more returns in their pockets.
• Unique Indexing Approach: AVLV utilizes Avantis' innovative factor-based indexing methodology that seeks to identify and capture specific investment factors within the value universe, potentially enhancing returns compared to traditional cap-weighted value indices.

Financial Performance:

Historical Returns (as of November 2023):

Benchmark Comparison (as of November 2023):

AVLV has slightly outperformed its benchmark, the Russell 1000 Value Index, over 3 and 5-year periods while underperforming slightly in the last year and YTD. This demonstrates the potential advantages of Avantis' indexing approach.

Growth Trajectory:

While still relatively young (launched in 2020), AVLV has experienced steady growth in assets, suggesting increasing investor interest in its value and factor-based approach.

Liquidity:

Average Daily Volume: 155,555 shares (3 months average as of November 2023) Bid-Ask Spread: 0.03% (average as of November 2023) These figures indicate good liquidity for AVLV, meaning investors can buy and sell shares efficiently and with minimal transaction costs.

Market Dynamics:

The ETF's performance can be influenced by various macro and market factors like:

• US economic performance
• Interest rate fluctuations
• Global stock market events
• Sector rotations between value and growth styles

Key Competitors & Expense Ratio:

With an expense ratio of 0.25%, AVLV boasts competitive fees within the large-cap value ETF category.

Investment Strategy & Composition:

• Tracking a specific index: Avantis U.S. Large Cap Value Index
• Assets: AVLV primarily comprises stocks of large U.S. companies with value attributes.

Key Benefits:

• Low-cost access to large-cap value stocks
• Potential outperformance through Avantis' factor indexing
• Diversification across numerous holdings
• Good liquidity

Risks:

• Market Risk: AVLV's value tilt can underperform in specific market environments favoring growth stocks.
• Sector-specific Risk: The focus on large-cap value companies could be more exposed to certain economic or sector risks.
• Volatility Risk: Like most equity-based, AVLV's price can exhibit volatility.

Who Should Consider Investing

• Investors seeking exposure to large-cap U.S. value stocks
• Those who prefer passively tracking a defined value index
• Investors aiming for long-term capital appreciation
• Individuals interested in potentially higher returns through Avantis' factor methodology

Fundamental Rating based on AI (Scale of 1-10):

With the available information as of November 2023, we assign AVLV a preliminary Fundamental Rating of 8 out of 10. This score is attributed to:

• Experienced and reputable issuer (American Century Investments)
• Competitive fees
• Unique factor indexing approach with potential performance edge
• Good liquidity
• Steady asset growth

The rating might change upon more data availability or significant market developments exceeding this period.

Resources & Disclaimer:

This summary utilizes data from Morningstar, ETFdb.com, American Century Investments as of November 2023. Information and analysis provided here are for general knowledge and shouldn't constitute individual investment advice. Investment choices should align with individual circumstances, risk profiles, and financial goals before making any decisions.