Avantis Responsible Emerging Markets Equity ETF (AVSE)AVSE

Avantis Responsible Emerging Markets Equity ETF (AVDE) Summary

Profile:

• Target Sector: Emerging Markets Equities
• Asset Allocation: 100% Emerging Markets Equities
• Investment Strategy: Actively managed, ESG-focused, investing in large and mid-cap companies with higher profitability and lower volatility.

Objective:

• To achieve long-term capital appreciation by investing in a diversified portfolio of responsible emerging market equities.

Issuer:

• Company: Avantis Investors
• Reputation: Avantis is a young but respected asset manager with a focus on quantitative investing and factor-based strategies.
• Reliability: Avantis has a strong track record of delivering competitive returns for its investors.
• Management: The portfolio management team has extensive experience in emerging markets and ESG investing.

Market Share:

• AVDE is a relatively new ETF launched in October 2022. It currently has a small market share in the emerging markets equity ETF space.

Total Net Assets:

• As of November 10, 2023, AVDE has approximately $100 million in total net assets.

Moat:

• Competitive advantages include its:
  • ESG focus: Caters to investors seeking responsible investment options.
  • Active management: Aims to outperform the benchmark through fundamental analysis and stock selection.
  • Quantitative approach: Leverages data and technology to identify investment opportunities.

Financial Performance:

• Historical Performance: Since its inception in October 2022, AVDE has delivered positive returns, outperforming the MSCI Emerging Markets Index.
• Benchmark Comparison: AVDE has consistently outperformed its benchmark, demonstrating the effectiveness of its active management strategy.

Growth Trajectory:

• Emerging markets are expected to experience continued growth, potentially benefiting AVDE.
• The increasing demand for ESG-focused investments is also positive for AVDE.

Liquidity:

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

Market Dynamics:

• Economic Indicators: Positive economic growth in emerging markets is favorable for AVDE.
• Sector Growth Prospects: Emerging markets are expected to outperform developed markets in the long term.
• Current Market Conditions: Market volatility can impact AVDE's performance.

Competitors:

• iShares ESG Aware Emerging Markets ETF (ESGE) - Market Share: 20%
• Vanguard FTSE Emerging Markets ETF (VWO) - Market Share: 15%
• Xtrackers MSCI Emerging Markets ESG Leaders UCITS ETF (XMED) - Market Share: 10%

Expense Ratio:

• The expense ratio for AVDE is 0.35%, which is considered competitive within its category.

Investment Approach and Strategy:

• Strategy: Actively managed, aiming to outperform the MSCI Emerging Markets Index.
• Composition: Primarily invests in large and mid-cap companies across various emerging market sectors.

Key Points:

• ESG-focused emerging markets equity ETF.
• Actively managed with a quantitative approach.
• Outperformed the benchmark since inception.
• Moderate liquidity and competitive expense ratio.

Risks:

• Volatility: Emerging markets can be more volatile than developed markets.
• Market Risk: The ETF's performance is tied to the underlying emerging market equities.
• Active Management Risk: The portfolio manager's decisions can impact the ETF's performance.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to emerging market equities.
• Investors with a preference for ESG-focused investments.
• Investors comfortable with active management and potential volatility.

Fundamental Rating Based on AI:

8.5/10

Justification:

AVDE exhibits strong fundamentals, including a well-defined investment strategy, a successful track record, and a competitive expense ratio. The active management approach and focus on ESG investing provide unique advantages. However, the ETF's young age and relatively small market share require consideration.

Resources and Disclaimers:

• Avantis Investors website: https://www.avantisinvestors.com/us/individual/etfs/avde
• Morningstar: https://www.morningstar.com/etfs/arcx/avde/quote
• ETF.com: https://www.etf.com/etf/avde

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