
Recently, the Avantis Emerging Markets Equity ETF (AVEM ) reached the critical milestone of having $10 billion in assets under management. As of publication, AVEM is currently the single largest actively managed ETF by a significant margin.
This news alone is worth celebrating, but also opens up an interesting conversation about why AVEM is doing so well. Where is the demand for active emerging market exposure coming from, and why is AVEM leading the pack?
There are a few reasons investor interest in emerging markets is gaining steam. Broadly speaking, ongoing uncertainty with U.S. tariff negotiations and other macro factors are leading many advisors and investors to search for new sources for diversification. Emerging market exposure can provide different sector and region exposure to a portfolio, creating a more balanced risk profile.
Another factor working in favor of emerging markets is the weakening U.S. dollar. Traditionally, emerging markets tend to do well in instances where the dollar underperforms. With the dollar’s value dropping, advisors can look to emerging markets as a possible alternative option for delivering high returns.
AVEM Brings an Active Approach to the Table
While emerging markets offer plenty of appeal, AVEM has managed to stand out from the crowd with its active strategy. An experienced active team can more quickly react to macroeconomic trends and find new opportunities across the globe. This flexibility also gives AVEM more adaptability to pivot from more volatile markets as needed.
AVEM’s appeal extends far beyond the fact that the fund is actively managed. The ETF weighs securities based on valuation and profitability. Companies with low valuations and high profitability potential get a heavier weight than other assets within AVEM’s portfolio. This weighting methodology could help AVEM tap into significant long-term growth within emerging markets.
Already, evidence is mounting that AVEM’s strategy is paying off in the near term. As of May 31, 2025, AVEM’s NAV has risen more than 9% year-to-date. Considering AVEM is operating on a long-term time horizon, these results are highly encouraging.
AVEM’s $10 billion AUM milestone comes as the ETF continues to see significant fund flows from investors this year. As of June 18, 2025, FactSet data shows that it has seen more than $2 billion in fund flows in 2025 alone.
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