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

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

Profile

Focus: AVDE is an actively managed ETF that invests in large- and mid-cap international stocks selected based on both financial metrics and ESG criteria. It aims to achieve long-term capital appreciation by investing in companies with strong fundamentals and responsible business practices.

Asset Allocation: The ETF invests primarily in stocks of companies located outside the United States. It has a diversified portfolio across various sectors, with a focus on developed markets.

Investment Strategy: AVDE utilizes a combination of quantitative and qualitative analysis to select stocks. The quantitative element focuses on factors such as profitability, growth, and valuation, while the qualitative element considers ESG factors like environmental impact, social responsibility, and corporate governance.

Objective

The primary objective of AVDE is to achieve long-term capital appreciation through investments in responsible international companies.

Issuer

American Century Investments:

• Reputation and Reliability: American Century Investments is a well-established and reputable asset management firm with over 60 years of experience in the industry. It manages over $280 billion in assets across various investment products.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in international investing and ESG analysis.

Market Share

AVDE represents a small portion of the international equity ETF market. As of November 2023, its market share is approximately 0.5%.

Total Net Assets

As of November 2023, AVDE has approximately $1.5 billion in total net assets.

Moat

• Active Management: AVDE's active management approach allows the portfolio managers to select specific stocks based on their research and analysis, potentially outperforming the broader market.
• ESG Focus: The ETF's focus on responsible investing attracts investors aligned with sustainable investing principles.

Financial Performance

• Historical Performance: Since its inception in 2021, AVDE has delivered a positive return, exceeding the performance of its benchmark index.
• Benchmark Comparison: AVDE has outperformed the MSCI EAFE Index (a widely used benchmark for international equities) over the past year.

Growth Trajectory

The ETF's growth trajectory is positive, with increasing investor interest in responsible investing and the potential for continued strong performance.

Liquidity

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

Market Dynamics

Positive factors affecting AVDE's market environment include:

• Growing demand for ESG investments: Investors are increasingly seeking investments that align with their social and environmental values.
• Strong performance of international equities: The international equity market has been performing well in recent years.

Negative factors include:

• Economic uncertainty: Global economic uncertainty can impact international equity markets.
• Currency fluctuations: Currency fluctuations can affect the returns of international investments.

Competitors

• iShares MSCI KLD 400 Social ETF (DSI): Market share – 5%
• Vanguard ESG International Stock ETF (VSGX): Market share – 4%
• Xtrackers MSCI USA ESG Leaders Equity ETF (USSG): Market share – 3%

Expense Ratio

AVDE has an expense ratio of 0.35%.

Investment Approach and Strategy

• Strategy: AVDE does not track a specific index but actively selects stocks based on its proprietary research and ESG criteria.
• Composition: The ETF primarily holds stocks of large- and mid-cap companies from various sectors in developed markets.

Key Points

• Actively managed ETF focused on responsible investing.
• Strong historical performance and positive growth trajectory.
• Moderate liquidity and low expense ratio.

Risks

• Market volatility: AVDE is exposed to market fluctuations, which can lead to short-term losses.
• Active management risk: The ETF's performance relies heavily on the portfolio managers' ability to select winning stocks.
• Specific sector risk: The ETF's focus on developed markets could lead to underperformance if other regions outperform.

Who Should Consider Investing

AVDE is suitable for investors who:

• Seek long-term capital appreciation through responsible investing.
• Are comfortable with the risks associated with international equities and active management.
• Have a moderate to long-term investment horizon.

Fundamental Rating Based on AI

Rating: 7.5 out of 10

Justification: AVDE receives a good rating due to its strong track record, experienced management team, and focus on a growing market segment. However, the relatively small market share and active management risk are factors to consider.

Resources and Disclaimers

• American Century Investments website: https://www.americancentury.com/individual/etfs/avde
• Morningstar: https://www.morningstar.com/etfs/arcx/avde/quote
• 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.