Avantis All International Mkts Val 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 lowest fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy merits an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight momentum exposure and quality exposure compared with category peers. Momentum exposure is attributed to holding stocks currently on a winning streak and selling those that are on a downtrend. And a high quality exposure is rooted in holding stocks with low financial leverage and strong returns on equity. 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 International Large Cap Value ETF

Avantis Emerging Markets Value 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 benchmark on a risk-adjusted basis over the long term. Avantis All International Mkts Val ETF earns an Average Process Pillar rating. 

The largest contributor to the rating is the firm's five-year retention rate of 84% over the period. The size of the portfolio management team also contributes to 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 beat 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, over time, has opted for smaller market-cap companies, compared with others in the Foreign Large Value Morningstar Category.  But in terms of style (value/growth) exposure, it is similar. Looking at additional factor exposure, this strategy has continually had exposure to high-momentum stocks compared with Morningstar Category peers in the last few years. Momentum approaches bet that rising stocks will continue to rise and that lagging stocks will continue to lag. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. This strategy also has had a position favoring high-quality stocks in recent years, which could contribute to higher downside risk protection. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets. Compared with category peers, the strategy also had more exposure to the Quality 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 basic materials and consumer cyclical relative to the category average by 4.8 and 4.1 percentage points, respectively. The sectors with low exposure compared to category peers are consumer defensive and healthcare, underweight the average by 4.9 and 4.8 percentage points of assets, respectively. The strategy has only reported a handful of holdings, and is in a category where 14.4% of assets are typically concentrated in the top 10 holdings. And in closing, in terms of portfolio turnover, on a year-over-year basis, 0% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Average

Process

Avantis All International Mkts Val ETF earns an Above Average People Pillar rating. Daniel C. Ong, the longest-tenured manager on the strategy, boasts 19 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 3.1 stars, indicating that their risk-adjusted returns have been in line with the category average. Daniel C. Ong has an adequate backdrop of support, drawing on four additional listed managers, averaging seven years of listed portfolio management experience. As a team, they manage 31 investment vehicles together, with a Bronze asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha in aggregate. The highest personal investment by any of the strategy's managers is between $50,000 and $100,000. That is too low to promote alignment of their interests with the fund'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 All International Markets Value ETF

AVNV is an actively managed fund-of-funds that invests in international equity portfolios, typically heavily weighted towards developed markets outside the US. It seeks long-term capital appreciation through factor-investing, focusing on securities with value characteristics and higher expected returns.

Avantis Emerging Markets Equity ETF

Avantis All International Markets Equity ETF

With the expectation of Federal Reserve rate cuts to come this year, global central banks could also follow suit. This could pave the way for international equities to run higher, giving investors upside while also getting diversified exposure.

These 2 ETFs Provide Active, Diversified International Exposure

Avantis All Equity Markets ETF

Avantis All Equity Markets Value ETF

Avantis Moderate Allocation 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 All International Markets Value ETF ETF (AVNV)