Avantis rolls out four multi-factor ETFs-of-ETFs

Jul 4th, 2023 | By | Category: Alternatives / Multi-Asset

Avantis Investors, a subsidiary of American Century Investments, has launched four new actively managed ETFs-of-ETFs delivering multi-factor strategies diversified across regions and asset classes.

Eduardo Repetto, Chief Investment Officer of Avantis Investors

Eduardo Repetto, Chief Investment Officer of Avantis Investors.

Listed on NYSE Arca, the four funds are the Avantis All Equity Markets Value ETF (AVGV US), which comes with an expense ratio of 0.26%; Avantis All International Markets Equity ETF (AVNM US), 0.31%; Avantis All International Markets Value ETF (AVNV US), 0.34%; and Avantis Moderate Allocation ETF (AVMA US), 0.21%.

The strategies are managed by Chief Investment Officer Eduardo Repetto; Senior Portfolio Managers Mitchell Firestein, Daniel Ong, and Ted Randall; and Portfolio Manager Matthew Dubin.

All four ETFs are constructed exclusively using Avantis’s existing line-up of multi-factor equity and fixed income ETFs.

Avantis’s multi-factor equity ETFs seek to harvest returns from size, profitability, and value risk premia by employing modest tilts to constituent weights compared to conventional market cap-weighted indices.

The firm’s fixed income funds, meanwhile, seek to maximize return and manage risk more effectively compared to traditional benchmarks by tilting group weights according to factors such as sector, credit rating, and duration.

The ETFs

The Avantis All Equity Markets Value ETF targets a 60% allocation to US equity ETFs, 30% to developed ex-US equity ETFs, and 10% to emerging market equity ETFs. The underlying ETFs for each target geographic region focus initially on value-oriented stocks before applying the firm’s multi-factor approach.

The Avantis All International Markets Equity ETF targets a 70% allocation to developed ex-US equity ETFs and a 30% allocation to emerging market equity ETFs. The underlying ETFs focus either on broad-based equities or value-oriented stocks before applying the firm’s multi-factor approach.

The Avantis All International Markets Value ETF targets the same geographic allocations as above but invests only in multi-factor ETFs focused on value stocks.

The Avantis Moderate Allocation ETF targets a 67% allocation to equity ETFs and a 33% allocation to core fixed income ETFs. Within equities, the ETF targets a 47% allocation to US equity ETFs, a 12% allocation to developed ex-US equity ETFs, a 6% allocation to emerging market equity ETFs, and a 2% allocation to real estate ETFs – each target region may consist of broad equity ETFs or ETFs focused on value stocks.

Commenting on the new listings, Eduardo Repetto said: “It has always been our goal to offer a well-rounded suite of value-added funds for investors. We are excited to add these four new ETFs to our line-up and expand the range of low-cost, tax-efficient solutions available to our clients.”

Mitchell Firestein added: “I believe the ETF of ETF concept really offers the best of both worlds. Investors get access to a range of our underlying, low-cost active funds with the added benefit of professional and tax-efficient rebalancing inside a single ETF. It helps streamline allocations for investors.”

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