Avantis Investors, a newly established investment management subsidiary of Kansas City-based American Century Investments, has introduced five inaugural ETFs designed to fit seamlessly into investors’ asset allocations.
Eduardo Repetto, Chief Investment Officer, Avantis Investors.
Avantis Investors plans to offer a range of factor-based investment solutions, harnessing the quantitative investment expertise of Chief Investment Officer, Eduardo Repetto, who used to serve as co-Chief Executive Officer of Dimensional Fund Advisors, one of the pioneering firms in smart beta.
“Avantis Investors was established by American Century to help clients achieve their investment goals through a persistent focus on providing well-diversified investment solutions,” said Repetto.
“By combining the latest in financial science with efficient implementation of time-tested academic research, we believe our new low-cost solutions represent an evolutionary step forward for both passive and active approaches,” he added.
Avantis Investors’ ETFs share a common approach built upon an academically supported, market-tested framework that aims to identify securities with higher expected returns based on their current market prices and other company financial information.
As part of its portfolio management and trading processes, the team analyzes whether the perceived benefits of a trade overcome its associated costs and risk. This approach aims to harness return premiums while seeking to control implementation costs and mitigate portfolio risk to generate enhanced returns over time.
The five debut ETFs, all of which have been listed on NYSE Arca, are as follows:
Avantis International Small Cap Value ETF (AVDV US) — The fund primarily invests in a broad group of non-U.S. small-cap value companies believed to have higher expected returns across developed market countries, sectors and industries. The portfolio is designed to help investors achieve higher expected returns by investing in non-U.S. developed small-cap companies believed to be trading at low valuations and with higher profitability ratios, seeking broad diversification across companies, industrial sectors and countries in order to mitigate concentration risk. It comes with a fee of 0.36%.
Avantis International Equity ETF (AVDE US) — The fund primarily invests in a diverse group of companies of all market capitalizations, across non-U.S. developed market countries, sectors and industries, emphasizing investment in companies believed to have higher expected returns. The portfolio is designed to help investors achieve higher expected returns and broad diversification by investing in a broad set of large, mid and small capitalization companies across non-U.S. developed countries. To increase expected returns, the strategy deviates from market capitalization weights by overweighting securities trading at lower valuations and with higher profitability ratios. It comes with a fee of 0.23%.
Avantis Emerging Markets Equity ETF (AVEM US) — The fund primarily invests in a diverse group of companies of all market capitalizations, across emerging market countries, sectors and industries, emphasizing investment in companies believed to have higher expected returns. The portfolio is designed to help investors achieve higher expected returns and broad diversification by investing in a broad set of large, mid and small capitalization companies across emerging market countries. To increase expected returns, the strategy deviates from market capitalization weights by overweighting securities believed to be trading at lower valuations and with higher profitability ratios. It comes with a fee of 0.33%.
Avantis U.S. Equity ETF (AVUS US) — The fund invests primarily in a diverse group of U.S. companies of all market capitalizations, across sectors and industries, emphasizing investment in companies believed to have higher expected returns. The portfolio is designed to help investors achieve higher expected returns and broad diversification by investing in a broad set of U.S. large, mid and small capitalization companies. To increase expected returns, the strategy deviates from market capitalization weights by overweighting securities believed to be trading at lower valuations and with higher profitability ratios. It comes with a fee of 0.15%.
Avantis U.S. Small Cap Value ETF (AVUV US) — The fund primarily invests in a broad group of U.S. small-cap value companies believed to have higher expected returns across sectors and industries. The portfolio is designed to help investors achieve higher expected returns by investing in U.S. small-cap companies believed to be trading at low valuations and with higher profitability ratios, seeking broad diversification across companies and industrial sectors in order to mitigate concentration risk. It comes with a fee of 0.25%.
All five ETFs are co-managed by Repetto and his colleagues in the investment management team.