On the lookout for ETFs that aren’t estimating cap gains distributions this year? It’s that time of year again, and for investors who feel that market uncertainty may still make value a smart play, a top active value ETF from American Century’s Avantis Investors Unit, the Avantis U.S. Small Cap Value ETF (AVUV) is currently not estimating that it will distribute capital gains.
Value-oriented strategies certainly picked up eyeballs over such a complicated 2022, from spiking inflation and supply constraints to geopolitical strife in Europe not seen in a generation. With several of those challenges remaining unresolved, an active value ETF from a trusted management team can be the right move.
Small-cap value ETFs saw an increase in performance over the last month with 6.7% in returns compared to -5.2% YTD, taking in $913 million in net inflows compared to $2.8 billion for the year so far. AVUV stands out among its active value ETF competitors with consistent returns so far this year, returning 1.5% YTD and 9.7% over one month. That makes AVUV the only ETF in the top twelve ranked by one month performance that has also seen positive returns YTD.
Notably, AVUV has the highest YTD, one month, and one week net inflows across all active value ETFs according to VettaFi, taking in $2.4 billion, $326 million, and $74 million respectively, charging a 25 basis point fee for its small-cap focused exposures.
The strategy aims to provide long-term capital appreciation via its small-cap value stock picks, which the management team assesses based on fundamental screens including shares outstanding and price-to-book value. The ETF’s team looks to offer the benefits of indexing with the addition of value from its active decisions and research.
As of October 31st, AVUV does not estimate that it will offer short or long-term capital gains per share, with ordinary income per share listed at 0.2162. AVUV adds in competitive annual dividend yields of 0.99%, close to the ETF Database Category Average and FactSet Segment Average of 1.05% and 1.06% respectively. Investors have been flying into the $4.8 billion AUM ETF so far this year, with its lack of capital gains distributions potentially icing on the cake for the value curious.
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