Avantis International Equity's broad portfolio and mild factor tilts should provide a long-term edge. The management team's consistency in delivering this fund's intended risk exposures warrants a People Pillar upgrade to Above Average from Average. It earns a Morningstar Medalist Rating of Silver.
The fund offers extensive exposure to stocks of all sizes listed in foreign developed markets, and it tilts toward those with lower price/book multiples and higher profitability. To accomplish this, the managers assign weights based on a stock’s market cap and a market-cap multiplier. They apply larger multipliers to stocks with lower valuations and higher profitability, while those with opposite characteristics receive smaller multipliers. This technique has two advantages. It emphasizes factors that should have stronger performance over the long run while cutting back on turnover and trading costs. Overall, this is one of the best diversified and lowest turnover portfolios in the foreign large-blend Morningstar Category.
The portfolio’s emphasis on stocks with lower valuations has been persistent. But its preference for profitable firms has been less obvious because cheaper stocks tend to be less profitable than their larger and faster-growing counterparts. However, incorporating profitability paints a more complete picture about each stock's expected return and should steer the portfolio away from risky names with poor earnings. These factor tilts may push the portfolio toward more cyclical segments of the market and add to its volatility.
Stocks trading at lower valuations have been an advantage for the fund since early 2021 and compensated for the portfolio’s incremental risk. It outperformed the MSCI ACWI ex USA Index by 3.3 percentage points per year between January 2021 and May 2023 as global markets recovered from the coronavirus-driven drawdown. Its 0.23% expense ratio lands within the cheapest decile of the category and should provide a long-term edge over many of its peers.

Analyst Rating

A solid core holding with a value orientation.

Senior Analyst

Daniel Sotiroff

Rogers

Moelis

UBS Group AG

Saratoga Investment Corp - 6.25% NT REDEEM 31/08/2025 USD 25

National Energy Services Reunited

Canadian Natural Resources

Dollar General

Autoliv

AAR CORP.

MoneyLion

This well-diversified fund uses a cost-conscious approach that leans toward stocks trading at lower valuations and higher profitability. Both traits should provide a modest advantage over the MSCI ACWI ex USA Index. It earns an Above Average Process Pillar rating.

Above Average

Process

The Avantis team has grown, and management responsibilities are spread across more individuals, earning a People Pillar upgrade to Above Average from Average. Key-person risk appears lower than it had been when the team was first formed, and it has consistently delivered on its funds’ targeted risk exposures.
Daniel Ong, Mitchell Firestein, Ted Randall, and Eduardo Repetto are the fund's named portfolio managers. All four joined Avantis in 2019 and had managed similar strategies at DFA. Repetto is the group's chief investment officer and previously served as DFA's co-CEO and co-CIO. The four jointly manage the firm's equity strategies, along with relative newcomer Matthew Dubin.
These managers have access to much of American Century's infrastructure, including a central trading desk, data collection, and compliance teams. The group built out a new portfolio management system that helps automate the managers' workflow and improve efficiency. It allows managers to spend less time on routine tasks and focus on items around the edges that can improve performance, such as cost-efficient execution and voluntary corporate actions.
The management processes appear to be working as intended. The funds managed by this group have followed expected performance patterns. None of the equity ETFs overseen by this team had made capital gains distributions as of May 2023.

People

An evolution is taking hold at American Century, but some pluses and minuses continue, supporting a continued Parent rating of Average.
The firm entered the ETF market in 2019 by launching Avantis Investors, led by former executives from Dimensional, a strong firm that manages semi-passive strategies with value tilts and low fees. Avantis is now running roughly a dozen ETFs with similar features, while American Century’s in-house teams manage another 16 active ETFs. This effort is still fairly new and small as a percentage of assets under management, as most ETFs have been launched since 2019, but they help American Century compete with lower-cost passive and strategic-beta funds.
The bulk of the firm’s assets remain in U.S. mutual funds run by its internal boutiques. The U.S. value team has long been a standout, with tenured, stable management and good long-term results, but other investment teams haven’t produced consistently distinctive portfolios or performance, and some have continued to endure investment-professional turnover.
The firm’s ownership structure is noteworthy and supports a long-term strategy. While the firm has worked with a few large minority shareholders, including current 41% stakeholder Nomura, The Stowers Institute for Medical Research owns 45% of the firm but holds 70% of the equity voting rights. Employees own the rest, which should encourage retention.

Average

Parent

Avantis International Equity ETF

AVDE is an actively managed portfolio of non-US companies from developed markets, of all market capitalizations, focusing on smaller, value companies.

Capital Group International Focus Equity ETF

iShares MSCI EAFE Growth ETF

Schwab Fundamental International Large Co. Index ETF

Schwab International Equity ETF

Fueled by a rise in household income, driven by moderating inflation levels globally and favorable financial conditions have led to rating agencies upgrading their forecasts for global growth. Improving near-term global growth prospects makes these global equity ETFs attractive.

Use ETFs to Ride the Rising Global Growth Optimistic Wave

AVDE provides exposure to securities from developed nations outside the United States, acting as a simple diversification tool. It's fairly liquid (SA shows an average volume of just over 220k), but a little expensive for some straightforward exposure to outside markets. My biggest issue: The timing isn't right to invest in AVDE due to economic challenges in its target markets and this being the wrong phase of the value cycle.

Avantis International Equity ETF: The Value Cycle Is Not Here Yet

The Avantis International Equity ETF is an actively managed fund that invests in foreign stocks from developed markets. The fund has favorably outperformed category benchmarks in recent years as evidence of the strategy's effectiveness. AVDE is a good option for investors seeking long-term exposure to developed markets that can work in the context of a broader diversified allocation.

AVDE: A Good Option For International Developed Market Equity Exposure

Avantis Emerging Markets Equity ETF

Avantis All Equity Markets ETF

Avantis International Large Cap Value ETF

Avantis US Large Cap Value ETF

Avantis US Equity ETF

Large caps dominated in 2023. But as investors continue to seek opportunities in 2024, international equities could be extending last year's rally.

Get Worldwide Equities Exposure in the Convenience of One ETF

Avantis Responsible International Equity ETF

With various economies around the globe operating at varying economic cycles, getting international exposure is an ideal option given the current market environment. American Century has a pair of exchange traded funds (ETFs) that can offer just that.

Tap Into International Equities Upside With These 2 ETFs

Dimensional US Core Equity 2 ETF

Global X U.S. Infrastructure Development ETF

Global X S&P 500 Covered Call ETF

In this week's edition of the ETF Issuer League, firms across multiple ETF AUM tiers have reason to celebrate. Shops including Avantis, Dimensional, Mirae's Global X suite, and boutique Summit Investments all hit strong weekly inflows for their sizes.

ETF Issuer League: Avantis, GlobalX, Summit Up

Is this time different? U.S. debt ceiling negotiations are struggling, and with GOP members of Congress gone for Memorial Day weekend, prospects seem bleak.

Avoid U.S. Default Risk in Foreign Equity ETF AVDE

Avantis International Small Cap Value ETF

Tired of all the Fed watch back and forth? Investors appear to be turning away from reading the FOMC tea leaves and instead looking abroad from U.S. equities to international offerings.

How an Active International ETF Trio Can Help Your Portfolio

Avantis U.S. Small Cap Value ETF

This week, Avantis Investors, an investment offering from global asset manager American Century Investments, reached the three-year anniversary of bringing its first five equity ETFs to the market. And at the three-year mark, each of the five initial Avantis ETFs has surpassed $1 billion in assets under management.

3 Years After Their Launch, 5 Avantis Funds Have More Than $1 Billion in Assets

KANSAS CITY, Mo. , Sept. 29, 2022 /PRNewswire/ -- This week, Avantis Investors ®, an investment offering from global asset manager American Century Investments®, reached the three-year anniversary of bringing its first five equity ETFs to the market.

AVANTIS REACHES THREE-YEAR ANNIVERSARY, CONTINUES TO EXPAND OFFERING

With several countries in various stages of their respective economic cycles, getting international exposure offers investors an option to expand beyond the realm of U.S. equities. Furthermore, implementing an active management strategy eases the burden when looking at the seemingly endless opportunities overseas.

2 Active Options Worth Considering for International ETF Exposure

The Commerce Department's recently released GDP numbers are fanning fears that the U.S. economy may already be in a recession. Gross domestic product fell at an inflation and seasonally adjusted annual rate of 0.9% in the second quarter.

Be Proactive With Your Equity Investments Amid a Potential Recession

Although growth equity stocks outperformed value in 2021, both types of strategies saw returns averaging over 25%, so both had stellar years. But with the conversation about rising rates coming back into the forefront, a correlating narrative centered around value stocks is also returning.

Value Funds See Growth Amidst Talk of Rising Rates

American Century Quality Diversified International ETF

International stock exchange traded funds strengthened on Monday after European markets ended higher, breaking a five-day losing streak. The pan-European STOXX 600 index was higher after dipping to a three-week low last week, Reuters reports.

A Rebound in Europe Helps Lift International Stock ETFs

International stock exchange traded funds are enjoying a great boost from Eurozone markets as Europe's record-breaking earnings season also came with a jump in number of company share repurchases. The buyback announcements were the cherry on top after Europe's near 150% quarterly profit surge, the best since Refinitiv IBES records began in 2012.

Europe Share Buybacks Could Support International ETF Momentum

European markets are on their fourth consecutive week of gains and pushed to new highs on Friday, lifting international stock exchange traded funds. The pan-European STOXX 600 index hit a record high of 476.16 on Friday and gained for the tenth consecutive session, matching its best winning streak since December 2006, despite concerns over the [.

Europe's Winning Streak Help Lift International ETFs

International stock exchange traded funds were higher Monday after European markets posted record highs on growing mergers and acquisitions, along with a string of strong financial sector earnings. European equities were off to a strong start to August with the pan-European STOXX 600 index ending at a record closing high of 464.45, Reuters reports.

International Stock ETFs Advance after European Markets Close at New Highs

International equities gained Thursday, with emerging markets and related exchange traded funds taking charge as updated Chinese economic growth data fueled expectations of more liquidity. Chinese stocks, which make up the lion's share of major emerging market benchmarks, rallied as investors looked to more liquidity measures from the People's Bank of China, following second quarter [.

Emerging Market ETFs Break Out

International markets, notably European stocks, led the charge on Wednesday after the previous session's sharp selling, with higher commodity prices and the earnings season supporting gains. Investors can also use exchange traded funds to capture these international moves.

News for Avantis International Equity ETF ETF (AVDE)