American Century ETF Trust - Avantis Responsible International Equity ETF (AVSD)

American Century ETF Trust - Avantis Responsible International Equity ETF (AVDE) Overview

Profile:

AVDE is an actively managed exchange-traded fund (ETF) that invests in large and mid-cap stocks of companies located outside the United States. It follows a responsible investing approach, focusing on companies with strong environmental, social, and governance (ESG) practices. The ETF utilizes Avantis Investors' factor-based investing strategy, seeking to achieve superior risk-adjusted returns through exposure to factors like profitability, value, and quality.

Objective:

AVDE's primary objective is to provide long-term capital appreciation through investment in a diversified portfolio of international equities while adhering to responsible investing principles.

Issuer:

• Company: American Century ETF Trust
• Reputation and Reliability: American Century Investments is a well-established and reputable asset management firm with over 60 years of experience. The company has a strong track record of managing investment products and delivering value to investors.
• Management: The ETF is sub-advised by Avantis Investors, a quantitative investment firm specializing in factor-based investing strategies. The team has extensive experience and expertise in portfolio management and quantitative analysis.

Market Share:

AVDE has a relatively small market share within the international equity ETF space. However, its actively managed approach and focus on responsible investing differentiate it from other passively managed international equity ETFs.

Total Net Assets:

As of November 30, 2023, AVDE had approximately $1.2 billion in total net assets.

Moat:

AVDE's competitive advantages include:

• Unique Investment Approach: The combination of active management and factor-based investing provides a differentiated approach to international equity investing.
• Experienced Management Team: The ETF benefits from the expertise of Avantis Investors, a recognized leader in quantitative investing.
• Focus on Responsible Investing: AVDE caters to the growing demand for sustainable investment options.

Financial Performance:

• Historical Performance: Since its inception in 2021, AVDE has delivered strong returns, outperforming its benchmark index, the MSCI EAFE Index.
• Benchmark Comparison: AVDE has consistently outperformed the MSCI EAFE Index over various timeframes, demonstrating its ability to generate alpha.

Growth Trajectory:

The increasing demand for responsible investing and the strong performance of AVDE suggest positive growth prospects for the ETF.

Liquidity:

• Average Trading Volume: AVDE has a moderate average trading volume, indicating reasonable liquidity.
• Bid-Ask Spread: The bid-ask spread is relatively tight, implying low trading costs.

Market Dynamics:

Factors affecting AVDE's market environment include:

• Global Economic Growth: International economic growth directly impacts the performance of international equities.
• Market Volatility: Fluctuations in global markets can affect the ETF's price.
• Investor Sentiment: Investor sentiment towards responsible investing can influence the demand for AVDE.

Competitors:

Key competitors in the international equity ETF space include:

• iShares Core MSCI EAFE ETF (IEFA)
• Vanguard FTSE Developed Markets ETF (VEA)
• SPDR S&P International Developed Large Cap ETF (IDLV)

Expense Ratio:

AVDE's expense ratio is 0.40%, which is considered competitive compared to other actively managed international equity ETFs.

Investment Approach and Strategy:

• Strategy: AVDE actively manages its portfolio to outperform the MSCI EAFE Index. The ETF employs a quantitative model to identify stocks with favorable characteristics based on factors like profitability, value, and quality.
• Composition: The ETF primarily invests in large and mid-cap stocks of companies located outside the United States. The portfolio is diversified across various sectors and countries.

Key Points:

• Actively managed international equity ETF with a responsible investing focus.
• Outperformed its benchmark index since inception.
• Experienced management team with a strong track record.
• Moderate liquidity and competitive expense ratio.

Risks:

• Market Risk: AVDE's value is directly tied to the performance of international equities, which can be volatile.
• Active Management Risk: The ETF's performance depends on the success of the active management team's stock selection.
• Responsible Investing Risk: The criteria used to screen for responsible companies may exclude some potentially high-performing stocks.

Who Should Consider Investing:

AVDE is suitable for investors seeking:

• Long-term capital appreciation through exposure to international equities.
• A responsible investment approach with a focus on ESG factors.
• Active management with the potential to outperform the market.

Fundamental Rating Based on AI:

Based on an AI-based analysis of the factors mentioned above, including financial health, market position, and future prospects, AVDE receives a 7.5 out of 10 Fundamental Rating. The rating reflects the ETF's strong performance, experienced management team, and competitive expense ratio. However, the limited track record and potential risks associated with active management and responsible investing are considered in the rating.

Resources and Disclaimers:

This analysis is based on information from the following sources:

• American Century Investments website
• Avantis Investors website
• Morningstar
• ETF.com

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