Where might investors want to go in their equity allocations to start 2025? If 2024 was the year of large-cap tech dominating the markets, 2025 may see other segments strike back. Not only might other areas, like small-cap value, offer a more appealing entry point, but also, they can offer some degree of diversification from tech-driven concentration risk. One standout small-cap value ETF, AVUV, could be seeing an attractive entry point for investors and advisors right now.
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The Avantis US Small Cap Value ETF (AVUS ) currently sits at more than $15 billion in AUM. Its price, meanwhile, recently fell to about $96.05 from a post-election high of more than $107, per YCharts data. Intriguingly, that moved the strategy’s relative strength index very close to “oversold” territory, according to the ETF’s technical chart. Its $96.05 price also represents a support point for the ETF, with the price around where it was prior to the post-election market rally.
Small-Cap Value ETF AVUV Can Appeal in 2025
Looking at the whole of 2025, however, the small-cap value ETF offers upside for this year and beyond. That lower price offers a cheaper way into its approach, with a relatively low expense ratio for an active fund, as well.
AVUV looks for long-term capital appreciation via small-cap value stocks screened for fundamentals. Those fundamentals include shares outstanding, cash flow, revenue, and price-to-book value, among others. With its active approach, the small-cap fund can identify those small-cap names poised to benefit most from rate cuts given their existing value status. Its approach looks to produce the benefits of indexing, like diversification and transparency, with that active adaptability and fundamental focus, too.
That approach has helped the ETF return 14.1% over the last five years on an average annual NAV basis, per Avantis Investors data. Taken together, with a relatively low price, now could be an apt time to dive into the fund, especially given the market’s large-cap concentration risk.
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