Given the relatively shaky performance of the U.S. market this year, many investors are looking to branch out their portfolios.
In order to do so, some advisors are starting to move more equity assets into international companies. International equities can intrinsically offer a lower correlation to disturbances among U.S. companies.
Among international equities, one potentially particularly underrated strategy at the moment is emerging markets. Tapping into emerging markets can help advisors and investors foster significant long-term portfolio growth.
That being said, emerging markets tend to carry more risk potential than other international strategies. These markets can be tough to navigate, especially through a traditional indexing strategy.
This is especially true for emerging market portfolios that include Chinese companies. Normally, China has served as one of the more relied-upon emerging market countries for building a portfolio. However, ongoing tariff threats are making companies within China a harder sell these days.
How AVXC Tempers Emerging Market Risk
Keeping this all in mind, it could prove prudent to use emerging market ETFs that can play around these risks. Notably, the Avantis Emerging Markets ex-China Equity ETF (AVXC ) could offer an emerging market strategy with lower volatility.
AVXC solves the problem of emerging market risk in two different ways. To start, the fund is actively managed. An active ETF with an experienced portfolio team can look beyond an index to find investing opportunities while handling a consistent risk profile.
Additionally, as the fund’s title implies, AVXC excludes emerging market companies domiciled in China from its portfolio. Instead, some of the fund’s top country exposures include Taiwan, India, and South Korea. As such, this fund can let advisors and investors tap into emerging markets while being less exposed to ongoing tariff negotiations.
Lately, more and more investor capital has continued to flow into AVXC. Since the beginning of April, the fund has seen over $25 million in net flows. These flows highlight how advisors and investors are looking to AVXC as a reliable option for building a more balanced portfolio.
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