Where to next for ETF investors? As the second half of the year gets started in earnest, investors have plenty of ETF options to consider. That being said, some stand out better than others. Concentration risk in the U.S. equity space, an AI bubble, and the potential for rate-cut disappointment all underline the draw of foreign equities as a diversifier. Looking abroad, one particular active international equity ETF stands out: the Avantis International Equity ETF (AVDE ).
See more: What Advisors Told VettaFi in First Half
AVDE charges 23 basis points. The ETF, which launched in 2019, considers ex-U.S. firms in developed markets. It emphasizes smaller, high-profitability, or value names therein. The active international equity ETF looks at criteria like cash flow, price-to-book, and shares outstanding. So why might investors want to consider it right now?
Technical Analysis
The strategy’s tech chart is showing some strong momentum. Currently, per YCharts, its price sits above both its 50- and 200-day simple moving averages. It currently costs $64.59 for investors to invest in the strategy. Intriguingly, it also has not reached overbought territory, per its relative strength index (RSI), for almost two months.
An Active International Equity ETF Approach
The ETF’s active approach could also help it stand out. By investing actively, its managers can under- or overweight specific stocks to adjust for headwinds or tailwinds. An active approach could also offer a particular benefit to foreign investing, too. Taking a deeper look at foreign equities can help the strategy outperform more simplistic indexes, especially given the lack of information available in foreign equities compared to domestic offerings.
Outperformance
AVDE has those other factors in its favor, certainly. Its performance may stand out the most, however, especially compared to other foreign indexes. Per YCharts, the ETF has outperformed the MSCI ACWI Ex USA Net Total Return Index (MSACXUSNTR) over the last five years. AVDE has returned 47.2% in that time compared to 38.1% for the latter index.
Taken together, AVDE presents an intriguing case as a foreign equity ETF. For those looking to get more diversification, it could be one to consider for the second half of the year.
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