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

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

Profile:

AVLV is an actively managed exchange-traded fund (ETF) that invests in a diversified portfolio of large-cap value stocks in the United States. The fund aims to achieve long-term capital appreciation through a combination of income generation and capital gains. Its portfolio typically includes securities with characteristics such as low price-to-book ratios, high dividend yields, and strong earnings growth potential.

Objective:

The primary objective of AVLV is to achieve long-term capital appreciation and outperform the Russell 1000 Value Index, its benchmark, over time.

Issuer:

American Century Investments:

• Founded in 1958, American Century is a leading independent global asset manager with over $200 billion in assets under management.
• Reputation: Highly regarded firm with consistent top ratings from Morningstar, Lipper, and other independent research firms.
• Management: Strong management team with extensive experience in the investment industry.

Market Share:

AVLV has a market share of approximately 0.13% in the U.S. Large Cap Value ETF market.

Total Net Assets:

As of November 8, 2023, AVLV has approximately $452 million in total net assets.

Moat:

• Active Management: Utilizes a quantitative model to identify and select undervalued large-cap value stocks, potentially generating alpha and outperforming the market.
• Experienced Portfolio Management: Led by David Santschi, a veteran portfolio manager with a successful track record in value investing.
• Low turnover: Aims to minimize trading costs and enhances tax efficiency.

Financial Performance:

• Year-to-date return (as of November 8, 2023): 2.57%
• 1-year return: 13.58%
• 3-year annualized return: 16.15%
• 5-year annualized return: 15.18%

Benchmark Comparison:

AVLV has consistently outperformed its benchmark, the Russell 1000 Value Index, over various time horizons.

Growth Trajectory:

The ETF's assets under management and AUM are steadily growing, indicating investor confidence and potential for future growth.

Liquidity:

• Average daily trading volume: Approximately 25,000 shares
• Bid-Ask Spread: Tight spread, indicating good liquidity

Market Dynamics:

• Economic Growth: Strong economic growth benefits large-cap value stocks, potentially driving AVLV's performance.
• Interest Rates: Rising interest rates can negatively impact value stocks; however, AVLV's focus on undervalued companies can mitigate this risk.

Competitors:

• iShares S&P 500 Value ETF (IVE) - Market share: 0.41%
• Vanguard Value ETF (VTV) - Market share: 0.38%
• Schwab U.S. Large-Cap Value ETF (SCHV) - Market share: 0.23%

Expense Ratio:

AVLV's expense ratio is 0.25%.

Investment Approach and Strategy:

• Investment Strategy: Actively managed, focusing on value investing principles.
• Composition: Invests primarily in large-cap U.S. stocks with value characteristics.

Key Points:

• Actively managed U.S. Large Cap Value ETF.
• Seeks long-term capital appreciation through income generation and capital gains.
• Targets undervalued stocks with high dividend yields and growth potential.
• Outperformed its benchmark index over various time horizons.
• Experienced management team with a successful track record.

Risks:

• Market Risk: AVLV's performance is tied to the overall market conditions, which can fluctuate significantly.
• Value Investing Style Risk: Value investing may underperform growth investing in certain market environments.
• Active Management Risk: The success of AVLV relies heavily on the portfolio manager's ability to identify undervalued stocks.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to large-cap value stocks.
• Investors who believe in the active management approach and the potential for outperformance.
• Investors with a moderate to high risk tolerance.

Fundamental Rating Based on AI (1-10): 8.5

Justification:

AVLV scores highly for its experienced management team, solid performance track record, and active management approach. Its focus on undervalued stocks and relatively low expense ratio further strengthens its appeal. However, its market share remains relatively small, and value investing can underperform during certain market cycles.

Resources:

• American Century Investments: https://www.americancentury.com/individual/etfs/avlv
• ETF.com: https://www.etf.com/AVLV
• Morningstar: https://www.morningstar.com/etfs/avlv

Disclaimer:

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