Avantis All Equity Markets ETF's Average People Pillar and Process Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy’s management team earns an Average People Pillar rating. The strategy gets an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a considerable overweight position in liquidity exposure and volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Avantis US Equity ETF

Avantis US Large Cap Value ETF

Avantis International Equity ETF

Avantis Emerging Markets Equity ETF

Avantis International Large Cap Value ETF

Avantis U.S. Small Cap Value ETF

Avantis US Small Cap Equity ETF

Avantis Emerging Markets Value ETF

Avantis Real Estate ETF

Avantis International Small Cap Value ETF

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Avantis All Equity Markets ETF earns an Average Process Pillar rating. 

The most important driver of the rating is the parent firm's five-year risk-adjusted success ratio of 55%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The depth of the portfolio management team also supports the process. With five portfolio managers, the fund is well-staffed. Lastly, the process is limited by the experience of the management team, which averages seven years at this fund.

 This strategy leans toward smaller, deeper value companies than its average peer in the Global Large-Stock Blend Morningstar Category. Analyzing additional factors, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also exhibited a tilt toward high-volatility stocks over these years, meaning it has invested in companies that have a higher historical standard deviation of returns. This orientation tends to pay off most prominently when markets are hot. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. In addition, this strategy's holdings have included more companies with high dividend or buyback yields than peers over these years. Higher-yield stocks can provide steady income, but also have their risks. Dividend payers may cut payouts, for instance, if their earnings fall. In this month, the strategy also had more exposure to the Yield factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in energy and financial services relative to the category average by 5.7 and 3.5 percentage points, respectively. The sectors with low exposure compared to category peers are healthcare and technology, underweight the average by 5.2 and 4.5 percentage points of assets, respectively. The portfolio is positioned across 12 holdings and is relatively concentrated. In particular, 98.9% of the fund’s assets are housed within the top 10 holdings, as opposed to the typical peer's 24.1%.

Average

Process

Avantis All Equity Markets ETF earns an Average People Pillar rating. Daniel C. Ong, the longest-tenured manager on the strategy, boasts 18 years of portfolio management experience. The average Morningstar Rating of the strategies they manage is 4.0 stars, demonstrating excellent risk-adjusted performance versus category peers. Daniel C. Ong has an adequate backdrop of support, drawing on four additional listed managers, averaging seven years of portfolio management experience. As a team, they manage 11 investment vehicles together, with solid long-term prospects. The strategies average a Bronze asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha in aggregate. None of the portfolio managers here invest in this fund. This hurts the rating because manager investment would align their interests with the strategy's investors. 

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

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.

Parent

Avantis All Equity Markets ETF

AVGE is an actively managed fund-of-funds that seeks long-term capital appreciation through investments in equity portfolios holding a wide variety of securities with higher expected returns.

Avantis All Equity Markets Value ETF

Avantis Moderate Allocation ETF

Avantis All International Markets Equity ETF

Avantis All International Markets Value ETF

Avantis Investors has listed four new active ETFs on the New York Stock Exchange today. Each fund seeks long-term capital appreciation.

Avantis Launches 4 New Active ETFS

iShares MSCI ACWI ETF

The Avantis All Equity Markets ETF started last September and invests by holding 10 other Avantis ETFs. Besides sharing the allocation to each ETF held, a strategy description is provided for each of the ETFs held by AVGE.

AVGE: Avantis Enters Global Equity Field Against ACWI

Avantis Inflation Focused Equity ETF

American Century unit departs from familiar strategy with new products.

Avantis' Inflation-Fighting, Fund-of-Fund ETFs Launch

Avantis Investors, an investment offering from American Century Investments, has expanded its exchange traded fund platform with the listing of two new transparent active strategies: the Avantis Inflation Focused Equity ETF (NYSE Arca: AVIE) and the Avantis All Equity Markets ETF (NYSE Arca: AVGE).

News for Avantis All Equity Markets ETF ETF (AVGE)