Avantis adds US large-cap ETF to factor-enhanced suite

Oct 10th, 2023 | By | Category: Equities

Avantis Investors, a subsidiary of American Century Investments, has launched a new ETF that aims to capture alpha by incrementally harvesting factor returns across the US large-cap equity segment.

Avantis adds US large-cap ETF to factor-enhanced suite

Avantis has launched a new factor-enhanced ETF targeting US large-cap equities.

The Avantis US Large Cap Equity ETF (AVLC US) has been listed on NYSE Arca with an expense ratio of 0.15%.

AVLC invests in a comprehensive portfolio of US large-cap companies diversified across market sectors and industry groups. The fund seeks to enhance expected returns by harnessing Avantis’s expertise in factor analysis to overweight securities trading at lower valuations and with higher profitability ratios.

Avantis defines the targeted factors through various ratios that utilize both reported and expected data as inputs. The portfolio is continually monitored and regularly adjusted based on these characteristics, offering a dynamic, responsive approach to investing.

Overall. the strategy delivers the benefits of indexing, such as diversification and low turnover, with the potential for incremental active value creation, compounded over time.

Avantis offers another US large-cap equity ETF – the $1.5 billion Avantis US Large Cap Value ETF (AVLV US) – which similarly tilts towards companies with lower valuation and higher profitability ratios but begins its selection process from a subset of US large-cap stocks that have been identified as being aligned with the value factor. AVLV also has an expense ratio of 0.15%.

AVLC is the sixth new factor-enhanced ETF from Avantis this year. The firm’s earlier launches included four new fund-of-fund ETFs, which were introduced in June, and the Avantis International Small Cap Equity ETF (AVDS US), which debuted in July.

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