U.S. investors have many different ETF options available to them, with the number of strategies growing almost daily. ETFs provide a wide variety of themes and exposures, which could prove particularly helpful right now given how expensive U.S. tech is. Many investors are relying on U.S. tech stocks to drive a core part of their portfolios, but they may be overvalued. Amid a growing universe of ETFs, an international equity ETF like the Avantis International Equity ETF (AVDE) could provide a solution.
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The fund recently crossed over the $5 billion mark in AUM for the first time. The international equity ETF, which will hit its fifth year of operation this September, charges a 23 basis point fee for its approach. The strategy actively invests in non-U.S. firms from developed markets, broadly focusing on small value firms. It uses fundamental criteria like cash flows and revenues, for example, to assess companies.
Digging Into International Equity ETF AVDE
While on an initial viewing it appears that the fund has relied more on the influence of price increases in its portfolio, on net it has relied almost entirely on inflows over the last one-year period to drive up its AUM, per ETF Database data. The fund has gathered $1.4 billion in net inflows over the last one-year period.
Given those inflows, how has the strategy performed? The international equity ETF has returned 11.8% over the last one-year period, per Avantis Investors data. The strategy has outperformed its benchmark’s return of 10.8% in that time, as well.
What case, then, does the strategy have for the rest of this year? The market sell-off earlier this month, though incited by the yen carry trade unwinding, may have signaled a deeper concern about tech stocks and the U.S. stock market more broadly. Whatever the outlook, those stocks remain quite expensive, with an international equity ETF like AVDE offering diversification.
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