Avantis Moderate Allocation 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 gets an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in the North America region and has a substantial underweight in developed markets regions compared with category peers. 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 Core Fixed Income 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

Morningstar's evaluation of this fund's process seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle. Avantis Moderate Allocation ETF earns an Average Process Pillar rating. The most notable contributor to the rating is the firm's five-year retention rate of 84% over the period. The scale of the portfolio management team also strengthens 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 produces a fixed-income weighting that hews closely to the typical Moderate Allocation peer but holds more assets in equities, with a 30% to 65% fixed-income to equity composition. Its equity sleeve has a meaningful tilt toward both smaller market-cap and value-oriented companies compared with the category average. The strategy has three region or sector biases compared to category peers. The most notable is its consistent underexposure to the North America region. It also maintains an underweight bias to developed markets regions. Lastly, the strategy has a large and consistent overweight in the basic materials sector. 

 The portfolio is overweight in energy and industrials relative to the category average by 4.7 and 3.6 percentage points, respectively. The sectors with low exposure compared to category peers are technology and healthcare, underweight the average by 9.5 and 6.3 percentage points of assets, respectively. The portfolio is overweight in Emerging Asia and Developed Asia regions relative to the category average by 3.9 percentage points and 2.8 percentage points, respectively. The regions with low exposure compared to their category peers are North America and United Kingdom, with North America underweight the average by 11.9 percentage points and United Kingdom similar to the average.

 The fund’s fixed-income sleeve maintains lower credit risk as the fund’s average credit rating is A compared with the category average’s BBB.

Average

Process

Avantis Moderate Allocation ETF earns an Above Average People Pillar rating. The team is backed by Daniel C. Ong, the longest-tenured manager on the strategy, who provides 19 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.1 stars, demonstrating average risk-adjusted performance. 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 31 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. The highest personal investment in the fund by any of its managers is between $100,000 and $500,000. 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 Moderate Allocation ETF

AVMA is an actively managed, asset allocation fund-of-funds that invests with moderate risk in a broad basket of equity and fixed income ETFs.

Avantis All Equity Markets ETF

Avantis All Equity Markets Value 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

KANSAS CITY, Mo. , June 29, 2023 /PRNewswire/ -- Today, Avantis Investors ®, a $25 billion* investment offering from global asset manager American Century Investments®, expands its exchange traded fund (ETF) platform with the listing of four new actively managed ETFs: Avantis All Equity Markets Value ETF (AVGV), Avantis All International Markets Equity ETF (AVNM), Avantis All International Markets Value ETF (AVNV) and Avantis Moderate Allocation ETF (AVMA).

News for Avantis Moderate Allocation ETF ETF (AVMA)