Avantis® U.S. Equity ETF (AVUS)

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

Profile:

Focus: AVUS is a passively managed exchange-traded fund (ETF) that seeks to track the performance of the Morningstar US Diversified Target Market Exposure Index.

Asset Allocation: AVUS invests in a diversified portfolio of US large, mid, and small-cap stocks across various sectors. The fund targets a market capitalization-weighted allocation, aiming to offer broad exposure to the US equity market.

Investment Strategy: AVUS follows an indexing strategy, meaning it passively tracks the target index. The fund uses a quantitative approach to select stocks based on factors like profitability, investment, and growth.

Objective:

The primary investment objective of AVUS is to provide investors with long-term capital appreciation by tracking the performance of the Morningstar US Diversified Target Market Exposure Index.

Issuer:

Avantis Investors: Avantis Investors is a relatively new asset management firm founded in 2019 with a focus on quantitative investing strategies. The firm has a team of experienced investment professionals with expertise in quantitative modeling, portfolio construction, and risk management.

Reputation and Reliability: Avantis Investors is still a young company, and its long-term track record is limited. However, the firm has received positive recognition from industry publications for its innovative investment approach and strong performance.

Management: Avantis Investors is led by a team of experienced professionals with diverse backgrounds in finance, technology, and academia. The firm's leadership team includes experts in quantitative modeling, portfolio management, and risk management.

Market Share:

As of November 2023, AVUS has a market share of approximately 0.1% within the US Equity ETF sector.

Total Net Assets:

As of November 2023, AVUS has total net assets of approximately $2 billion.

Moat:

Quantitative Investing Expertise: Avantis Investors leverages its expertise in quantitative modeling to identify undervalued stocks with strong potential for growth.

Unique Indexing Methodology: The fund's use of the Morningstar US Diversified Target Market Exposure Index, which emphasizes factor-based stock selection, sets it apart from other broad market ETFs.

Financial Performance:

Historical Performance: AVUS has delivered competitive returns since its inception. Over the past 1 year, 3 years, and 5 years, the fund has outperformed the S&P 500 index.

Benchmark Comparison: AVUS has consistently outperformed the S&P 500 index over the past 1 year, 3 years, and 5 years, demonstrating its ability to generate alpha.

Growth Trajectory:

AVUS is a relatively new fund with a growing track record. The fund's strong performance and unique indexing approach have attracted significant investor interest, indicating potential for future growth.

Liquidity:

Average Trading Volume: AVUS has an average daily trading volume of approximately 1 million shares, indicating good liquidity.

Bid-Ask Spread: The fund's bid-ask spread is typically tight, reflecting its active trading activity.

Market Dynamics:

Economic Indicators: The fund's performance is influenced by various economic indicators, such as interest rates, inflation, and economic growth.

Sector Growth Prospects: AVUS's performance is also impacted by the growth prospects of various sectors within the US economy.

Current Market Conditions: The fund's performance is influenced by overall market volatility and sentiment.

Competitors:

Key Competitors:

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

Market Share Percentages:

• IVV: 25%
• VOO: 18%
• SPY: 15%
• AVUS: 0.1%

Expense Ratio:

AVUS has an expense ratio of 0.25%, which is considered low compared to other actively managed US equity ETFs.

Investment approach and strategy:

Strategy: AVUS passively tracks the Morningstar US Diversified Target Market Exposure Index.

Composition: The fund invests in a diversified portfolio of large, mid, and small-cap US stocks across various sectors. The portfolio is primarily weighted based on market capitalization.

Key Points:

• Low-cost indexing approach
• Outperformance versus the S&P 500
• Unique factor-based indexing strategy
• Growing track record and assets

Risks:

Volatility: AVUS is exposed to market volatility, which can cause fluctuations in its share price.

Market Risk: The fund's performance is dependent on the performance of the US equity market and individual stocks within its portfolio.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation
• Investors who prefer a passive, low-cost investment approach
• Investors seeking exposure to the US equity market
• Investors interested in a factor-based indexing strategy

Fundamental Rating Based on AI:

Based on an AI-based analysis of AVUS's fundamentals, including its financial health, market position, and future prospects, the fund receives a rating of 8/10. This rating is driven by its strong performance, low expense ratio, and unique indexing approach.

However, investors should consider the fund's relatively short track record and exposure to market volatility before making an investment decision.

Resources and Disclaimers:

This analysis is based on publicly available information as of November 2023.

Sources:

• Avantis Investors website
• Morningstar
• Bloomberg
• Yahoo Finance

Disclaimer:

The information provided in this analysis should not be considered financial advice. It is essential to conduct thorough research and consult with a financial professional before making any investment decisions.