VIDEO: ETF of the Week: AVDV

The Avantis International Small Cap Value ETF (AVDV) is gaining significant attention, having surpassed $10 billion in AUM and delivering over 25% returns through July, outperforming its all-country world small-cap index. This actively managed fund, with a 0.36% expense ratio and over 1,400 holdings, offers investors diversified exposure to international small-cap value companies, a segment often underexposed in portfolios. Its appeal is further enhanced by the local nature of its underlying companies, which provides potential insulation from broader tariff volatility, alongside Avantis's proven active management track record.

Analysis

The Avantis International Small Cap Value ETF (AVDV) has demonstrated significant momentum, evidenced by its assets under management crossing the $10 billion threshold and its strong year-to-date performance through July, with returns exceeding 25% and outperforming its all-country world small-cap index. As an actively managed fund, AVDV maintains a relatively low expense ratio of 36 basis points while offering a highly diversified portfolio of over 1,400 holdings. The investment strategy targets international small-cap companies with attractive valuations, high quality, and stable operations, a methodology backed by Avantis's strong track record in small and value investing and validated by a four-star Morningstar rating. A key strategic appeal is the fund's potential insulation from global trade tariff volatility, as its underlying companies are typically more locally-focused and less dependent on exporting to the United States. This positioning addresses a common gap in investor portfolios, which are often underexposed to the international small-cap segment.

Key Decisions for Investors

• Investors with limited international exposure should evaluate AVDV as a vehicle to diversify into the international small-cap value space, a segment where many portfolios are underexposed.
• The fund's focus on smaller, locally-oriented companies offers a potential defensive characteristic against global trade tariff volatility, making it a timely consideration for those concerned about geopolitical risks impacting large-cap multinationals.
• With a competitive expense ratio of 36 basis points and a four-star Morningstar rating, the fund presents a compelling case for accessing proven active management in the international small-cap market without incurring the high fees typical of many active strategies.