Avantis Inflation Focused Equity ETF’s Process Pillar rating is Average, but a strong management team still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy merits an Average Process Pillar rating.  High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. 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

Berkshire Hathaway Inc. - Ordinary Shares - Class B

Exxon Mobil

Eli Lilly

Procter & Gamble

UnitedHealth Group

PepsiCo

Chevron

Coca-Cola

AbbVie

ConocoPhillips

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

The main driver of the rating is the firm's five-year retention rate of 83% over the period. The depth of the portfolio management team also reinforces the process. With five portfolio managers, the fund is well-staffed. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 51%. 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 parent's subpar success ratio suggests that the firm could do better across its fund lineup.

 This strategy leans toward smaller, deeper value companies compared with its average peer in the Large Blend Morningstar Category. Analyzing additional factors, the fund has held stocks with higher trading volumes compared to Morningstar Category Peers in the past few years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also displayed a tendency to hold more companies with high dividend or buyback yields than peers over recent years. High-yield stocks tend to be associated with more mature, profitable businesses that can grow as well as provide a stream of income. Such stocks could suffer, however, if setbacks force them to cut their dividends. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. Such exposure tends to pay off when markets are hot and to be costly when they are not. In this month, the strategy also had more exposure to the Volatility 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 healthcare relative to the category average by 22.1 and 16.6 percentage points, respectively. The sectors with low exposure compared to category peers are technology and consumer cyclical, underweight the average by 28.0 and 10.1 percentage points of assets, respectively. The portfolio is composed of 353 holdings and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 34.4% of the strategy's assets were concentrated in the top 10 fund holdings, compared to the category’s 48.8% average. And finally, in terms of portfolio turnover, looking at year-over-year movements, 7% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Average

Process

Avantis Inflation Focused Equity ETF earns an Above Average People Pillar rating. Daniel C. Ong’s veteran status, with 19 years of listed portfolio management experience, brings a wealth of experience to the table. The average Morningstar Rating of the strategies they currently manage is 2.9 stars, reflecting below-average risk-adjusted performance in comparison to category peers. Daniel C. Ong draws on a supporting cast of four additional listed managers. Together they average seven years of listed portfolio management experience. As a team, they manage 30 investment vehicles together, with a Bronze asset-weighted average Morningstar Medalist Rating, demonstrating their potential to deliver positive alpha in aggregate. The highest personal investment in the fund by any of its managers is between $500,000 and $1 million. That's on the low side--it would need to be more than $1 million for us to see the investment as sufficient to promote the strong alignment of 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.

Above Average

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 Inflation Focused Equity ETF

AVIE is an actively managed equity fund of US companies involved in sectors or industries that tend to outperform during periods of inflation.

Positivism heading into 2023 centered on the Federal Reserve keeping inflation in check and eventually decelerating its pace of rate hikes. However, if inflation proves to be stubborn, investors can counter with an inflation-focused exchanged traded fund (ETF).

If Inflation Stays Stubborn, Counter With This ETF

Heading into 2023, it was widely anticipated that inflation would be stubborn, and while the expectation is that the Federal Reserve will eventually pause rate hikes, persistent inflation creates opportunities for hedging strategies implemented by active exchange traded funds (ETFs).

Persistent Inflation Creates Opportunity in This Active ETF

The past week has been all about economic data and what it means for the Fed's ongoing campaign to whip inflation — and the numbers haven't exactly shown the cooling off that the central bank is looking for amid a rapidly dwindling money supply.

Ride Out Inflation in Active Inflation Equities ETF AVIE

The pace of inflation easing slowed in January from December Tuesday, with the consumer price index CPI having climbed 6.4% in last month year over year compared to 6.5% in December on a y-o-y basis.

Try Inflation Equity ETF AVIE as Active ETFs Bloom

Avantis US Equity ETF

Avantis All Equity Markets 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 Inflation Focused Equity ETF ETF (AVIE)