Avantis Responsible International Eq 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 sizable 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.  Momentum is the premise that stocks that have recently outperformed will continue to do so. With low momentum exposure, the portfolio is holding stocks that managers believe to be undervalued. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. 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

Moelis

Rogers

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

Royal Bank of Canada

UBS Group AG

ClearBridge American Energy MLP Fund, Inc.

MoneyLion

Credit Suisse

Bank of Nova Scotia

National Energy Services Reunited

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 Responsible International Eq ETF earns an Average Process Pillar rating. 

The most substantial contributor to the rating is the firm's five-year retention rate of 83% over the period. The size of the portfolio management team also supports the rating. 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 modest success ratio suggests that the firm could do better across its fund lineup.

 This strategy tends to hold smaller, more value-oriented companies than its average peer in the Foreign Large Blend Morningstar Category. Analyzing additional factors, this strategy has had relatively low exposure to momentum stocks compared with Morningstar Category peers continually in the last few years. Momentum strategies typically bet that stocks that have recently outperformed will continue to do so, and those that have recently underperformed will keep lagging. Avoiding the former and buying the latter could indicate that managers are averse to chasing momentum. In the latest month, the strategy was also less exposed to the Momentum factor compared with Morningstar Category peers. This strategy has also favored low-quality stocks. This means the fund avoids holding companies that are consistently profitable, growing, and have solid balance sheets. Lacking this ballast, the fund's prospects could rest on its ability to surpass peers during economic booms. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. This orientation tends to pay off most prominently when markets are hot. 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 financial services and consumer cyclical relative to the category average by 7.2 and 3.8 percentage points, respectively. The sectors with low exposure compared to category peers are energy and consumer defensive, underweight the average by 4.7 and 2.7 percentage points of assets, respectively. The portfolio is composed of 2,117 holdings and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 8.6% of the strategy's assets were concentrated in the top 10 fund holdings, as opposed to the category average's 15.4%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 8% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Average

Process

Avantis Responsible International Eq 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 strategies they currently manage have an average Morningstar Rating of 2.9 stars, demonstrating disappointing risk-adjusted performance compared with category peers. 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 30 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 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 Responsible International Equity ETF

AVSD actively invests in companies of all market capitalizations in developed markets outside of the US. Holdings are screened for multiple ESG metrics and selected based on fundamental criteria. 

Avantis 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

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

American Century Quality Diversified International ETF

American Century Focused Dynamic Growth ETF

American Century Multisector Income ETF

When trading ETFs, there are many criteria to consider, such as the use of limit orders, market volatility, when to trade if the underlying markets are closed, and the liquidity of the ETF. Advisors typically look at the on-screen liquidity, which is gauged by its average daily volume (ADV).

Using a Block Desk for Large Trades

Avantis Responsible US Equity ETF

Investors around the world have been pumping money into climate-themed funds at an extraordinary pace lately. Citing a report from Morningstar, InvestmentNews is reporting that in the U.S., climate mutual funds and ETFs reached $31 billion in assets at the end of 2021, up 45% from the roughly $22 billion the year before.

Consider These ESG-Focused Funds on Earth Day

While the demand for sustainable and responsible investing is growing, there's still some confusion among investors over which funds truly incorporate environmental, social and governance principles. While Morningstar reports that U.S. sustainable funds grew by nearly $70 billion in 2021, up 35% from 2020, the financial research and analysis firm removed the ESG tag from 1,200 funds, [.

Invest Responsibly With These ETFs

Avantis Investors, a $10 billion investment offering from global asset manager American Century Investments, today announced the launch of its third environmental, social, and governance exchange traded fund: the Avantis Responsible Emerging Markets Equity ETF (NYSE Arca: AVSE). The fund, which launches today on the New York Stock Exchange, invests primarily in a diverse group [.

Avantis Investors Launches Third ESG ETF With AVSE

Avantis Investors, a $9.2 billion investment offering from global asset manager American Century Investments, today launched two new funds based on feedback and demand from clients. The Avantis Responsible U.S. Equity (AVSU) and the Advantis Responsible International Equity (AVSD) each listed on the NYSE on March 17 with expense ratios of 15 basis points and [.

News for Avantis Responsible International Equity ETF ETF (AVSD)