Could global markets potentially follow the U.S. into a soft landing? With U.S. rate cuts in motion, U.S. investors are looking forward to continued economic durability next year. At the same time, however, concentration risk continues to loom domestically as just a few firms have driven much of the S&P 500. A global soft landing, then, could entice investors abroad, with the particular slant of the international small cap ETF AVDV offering particular appeal.
See more: Avantis Celebrates 5-Year Anniversary
Where many investors may get their international equities exposure via traditional, broad index funds, AVDV presents a more specific alternative. The Avantis International Small Cap Value ETF (AVDV ) recently celebrated its fifth anniversary as a fund. The international small cap ETF charges 36 basis points (bps) for its services, applying a value tilt to its category.
Look to AVDV's Active International Small Cap ETF
A small cap value approach particularly could benefit from that active approach. Where passive funds simply track indexes that infrequently adjust, active ETFs can adapt. Whether that means macroeconomic or geopolitical events, that flexibility can prove especially useful investing abroad. What’s more, active managers can leverage their experience and fundamental research, which can help sift through complicated foreign markets to identify standout opportunities.
So, while global markets look to be on track for a soft landing, an active international small cap ETF could prove a differentiator. After all, while a soft landing implies positive news, the global market is not a uniform body.
Active management can help a fund find sources of alpha. Especially in small caps, seasoned, agile management can outperform small cap indexes. AVDV has returned 15.25% YTD, per Avantis Investors data, beating its benchmark. With U.S. investors facing large cap concentration risk, a strategy like AVDV can offer some helpful diversification as well as opportunities for upside from good news abroad.
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