Considering routes to diversification? ETFs can provide easily toggleable tools to add or subtract exposures. With U.S. markets facing turbulent tariffs, international equities could provide a strong alternative. That being said, not all international small-caps are the same. The right international small-cap ETF can provide a targeted allocation to tack onto an existing equities portfolio. The Avantis International Small Cap Value ETF (AVDV ) presents one strong example.
See more: Diversify Into Emerging Markets Upside With Active ETF AVEM
The international small-cap value ETF charges a 36 basis point fee for its approach. AVDV actively invests in non-U.S. small-cap value firms that meet its criteria. Specifically, the fund emphasizes fundamental metrics like cash flow, revenue, expenses, and price-to-book value when scrutinizing opportunities.
AVDV's International Small-Cap ETF Approach
Together, that has helped AVDV performed well of late. The international small-cap ETF has returned 10.55% over one year as of March 31 per Avantis Investors data. That has outperformed the fund’s benchmark noticeably in that time. The benchmark, the MSCI World Ex-USA Small Cap Index, returned 3.58% in that time.
So, what kind of firms does the strategy hold? For example, AVDV holds Marks & Spencer Group LLC (MAKSY). MAKSY, per YCharts, is a British multichannel retailer. Mostly focused on the U.K., but with other regional operations, the company has returned 76.5% over the last year per YCharts, with 17.57% return on equity.
Next, one might look to Perseus Mining Limited (PMNXF), a West Africa-focused gold mining company. PMNXF has returned 56.4% over the last one year, per YCharts data. The gold mining company offers a 20.4% return on equity.
Finally, the ETF currently holds stock from WeBuild SPA (IMPJY) a construction company focused on sustainable infrastructure including water-focused and green companies. The company’s stock has returned 72.4% over the last one year period, per YCharts. It has offered just about 10% return on equity.
Together, small-cap value opportunities like those can help investors adapt to a turbulent domestic U.S. market. For those looking at their ETF options amid domestic volatility, an international small-cap ETF can appeal.
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