ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Core Strategies Channel
  2. AVSE at Crossroad of Emerging Markets, ESG
Core Strategies Channel
Share

AVSE at Crossroad of Emerging Markets, ESG

Tom LydonMay 31, 2022
2022-05-31

When evaluating equity-based environmental, social, and governance (ESG) exchange traded funds, investors typically lean into domestic stock strategies, extending home country bias.

However, a growing number of ESG ETFs address international stocks, including emerging markets. The Avantis Responsible Emerging Markets Equity ETF (AVSE ), which debuted in March, is part of that group.

While AVSE is a new ETF, investors may want to consider the fund’s potential benefits rather than its lack of age. The actively managed fund attempts to beat the widely observed MSCI Emerging Markets Index.

AVSE “limits the investable universe of companies by screening out those that raise concerns based on the team’s evaluation of multiple Environmental, Social and Governance (ESG) metrics and pursues the benefits associated with indexing but with the ability to add value by making investment decisions using information based on proprietary evaluations,” according to Avantis Investors.

Previously, some studies indicated that the marriage of ESG and emerging markets is a practical one on multiple levels. First, some developing economies are only now beginning to address long-running environmental issues. Second, a slew of old guard emerging markets stocks are tied to state-owned enterprises (SOEs).

Those points underscore the notion that some traditional emerging markets can expose investors to undue ESG risk. On a related note, the higher the ESG risk — regardless of region or market status — the more volatility and slack returns an investor could encounter over longer holding periods. Fortunately, there are signs that more emerging markets companies are prioritizing ESG.

“We are starting to see many of the corporates become more proactive in their targets and engagements.  And regulators in emerging markets have begun to outline sustainability and ESG disclosure requirements, as seen in some parts of Europe and the Americas,” according to Morgan Stanley research. “While the increased adoption of ESG goals, sustainability reports and better disclosures will likely be a multi-year journey, positive signs are already showing from those companies we own and from those on our radar screen.”

AVSE allocates 27% of its weight to Chinese stocks. While still sizable, that’s underweight to China compared to some traditional emerging markets ETFs. The fund devotes 30% of its total weight to South Korea and Taiwan — two of the more credible ESG players among developing economies. Home to 1,615 stocks, AVSE allocates 26% of its roster to financial services names, while the technology and consumer discretionary sectors combine for almost a third of the fund’s roster.

For more news, information, and strategy, visit the Core Strategies Channel.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X