Forecasting a recession seems to be the primary talk swirling in the capital markets these days, but whether economic growth stagnates or not, getting active management can benefit any portfolio whether markets trend higher or lower.
A pair of funds to consider: the Avantis U.S. Large Cap Value ETF (AVLV ) and the Avantis U.S. Equity ETF (AVUS ). Active management doesn’t have to be an expensive option, especially when both funds come with a low 0.15% expense ratio.
Under the supervision of experienced portfolio managers, active ETFs like AVLV and AVUS give investors dynamic exposure to the markets. Holdings can be adjusted on the fly when market conditions warrant a change, offering flexibility as opposed to rigidity from a passive approach.
Broad-Based Options With Defined Exposure
Both ETFs offer broad-based exposure to large-cap equities in the U.S., but one primary discerning feature is AVLV’s obvious tilt towards value. Value has been outperforming growth for much of the year amid inflation fears, but as markets become more emboldened as recession talks dissipate, growth could make a comeback.
Nonetheless, value can still capture the upside when markets continue to rally. On the flip side, should a recession hit, value-oriented equities with bigger market capitalizations can help mute the impact with less volatile market movements.
For more diversified exposure, AVUS fits the bill. It spreads its holdings across a wide spectrum of market capitalizations so investors get varied exposure to capture upside in mid- and small-cap equities, which can make amplified moves compared to their larger-cap peers.
Either way, both funds can slot into any portfolio for investors seeking active management. More specifically, active management at a low cost.
Benefits of AVLV:
- Invests in a broad set of U.S. large-cap companies and is designed to increase expected returns by focusing on firms trading at what are believed to be low valuations with higher profitability ratios.
- Pursues the benefits associated with indexing (diversification, low turnover, transparency of exposures), but with the ability to add value by making investment decisions using information in current prices.
- Efficient portfolio management and trading process that is designed to enhance returns while seeking to reduce unnecessary risks and costs for investors.
- Built to fit seamlessly into an investor’s asset allocation.
Benefits of AVUS:
- Invests in a broad set of U.S. companies across all market capitalizations and is designed to increase expected returns by overweighting securities that are believed to be trading at lower valuations and with higher profitability ratios.
- Pursues the benefits associated with indexing (diversification, low turnover, transparency of exposures), but with the ability to add value by making investment decisions using information in current prices.
- Efficient portfolio management and trading process that is designed to enhance returns while seeking to reduce unnecessary risks and costs for investors.
- Built to fit seamlessly into an investor’s asset allocation.
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