Avantis® U.S. Equity ETF (AVUS)AVUS

Avantis® U.S. Equity ETF (AVUS) Overview

Profile:

Avantis® U.S. Equity ETF (AVUS) is a passively managed exchange-traded fund that aims to track the performance of the Morningstar US Target Market Exposure Index. This index focuses on capturing the size, style, and value premiums common in the U.S. equity market. AVUS invests in approximately 1,000 large and mid-cap U.S. stocks, with emphasis on companies that exhibit value and profitability characteristics.

Objective:

The primary investment goal of AVUS is to provide long-term capital appreciation through exposure to a diversified portfolio of U.S. equities.

Issuer:

Avantis Investors is the issuer of AVUS. Avantis is a relatively new asset management firm founded in 2019 by a team of experienced investment professionals from Robeco, American Century Investments, and Dimensional Fund Advisors. The firm focuses on providing factor-based investment solutions for institutional and individual investors.

Reputation and Reliability:

Avantis is a young firm, but its founders have a strong track record in the investment industry. Additionally, the firm adheres to high standards of corporate governance and transparency.

Management:

The management team of AVUS consists of experienced investment professionals with expertise in quantitative analysis, portfolio construction, and risk management.

Market Share:

AVUS has a relatively small market share in the U.S. equity ETF space, with approximately $1.5 billion in assets under management. However, it has experienced strong growth since its inception in 2020.

Total Net Assets:

As of November 8, 2023, AVUS has $1.5 billion in total net assets.

Moat:

AVUS's competitive advantages include:

• Unique Investment Strategy: AVUS utilizes a factor-based approach that focuses on size, style, and value premiums, which may offer the potential for enhanced returns compared to traditional market-cap weighted indices.
• Experienced Management Team: The team behind AVUS has a proven track record in the investment industry and deep expertise in factor investing.
• Low Fees: AVUS has an expense ratio of 0.25%, which is significantly lower than many actively managed U.S. equity funds.

Financial Performance:

AVUS has delivered strong returns since its inception. Over the past year, AVUS has outperformed the S&P 500 by a significant margin.

Benchmark Comparison:

AVUS has consistently outperformed its benchmark, the Morningstar US Target Market Exposure Index, since its inception.

Growth Trajectory:

AVUS has experienced strong asset growth since its launch, indicating increasing investor interest in its factor-based approach.

Liquidity:

AVUS has a relatively high average trading volume, indicating good liquidity. The bid-ask spread is also relatively tight, suggesting that investors can buy and sell shares of AVUS at a fair price.

Market Dynamics:

The U.S. equity market is currently experiencing a period of volatility due to concerns about inflation and rising interest rates. However, the long-term outlook for the U.S. equity market remains positive.

Competitors:

Key competitors of AVUS include:

• iShares Core S&P 500 (IVV)
• Vanguard S&P 500 ETF (VOO)
• SPDR S&P 500 ETF Trust (SPY)

Expense Ratio:

The expense ratio of AVUS is 0.25%.

Investment Approach and Strategy:

AVUS is a passively managed ETF that tracks the Morningstar US Target Market Exposure Index. The index is designed to capture the size, style, and value premiums common in the U.S. equity market. AVUS invests in approximately 1,000 large and mid-cap U.S. stocks, with emphasis on companies that exhibit value and profitability characteristics.

Key Points:

• AVUS offers exposure to a diversified portfolio of U.S. equities with a focus on size, style, and value premiums.
• The ETF has a low expense ratio and has outperformed its benchmark since its inception.
• AVUS is a relatively new ETF but is backed by a team of experienced investment professionals.

Risks:

• AVUS is subject to the risks associated with investing in equities, including market volatility, interest rate changes, and economic uncertainty.
• The factor-based approach of AVUS may not outperform the market in all market conditions.
• AVUS is a relatively small ETF, which may limit its liquidity.

Who Should Consider Investing:

AVUS is suitable for investors seeking long-term capital appreciation through exposure to a diversified portfolio of U.S. equities. Investors who believe in the potential of factor-based investing and are comfortable with a moderate level of risk may find AVUS attractive.

Fundamental Rating Based on AI:

8.5/10

AVUS receives a strong rating based on its fundamentals. The ETF has a solid investment strategy, a low expense ratio, and has outperformed its benchmark since its inception. The management team is experienced and the firm has a strong reputation. However, the ETF is relatively new and has a small market share.

Resources and Disclaimers:

This analysis is based on information from the following sources:

• Avantis Investors website
• Morningstar
• Bloomberg

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