It’s one thing to count the rampant growth of active ETFs. It’s another to take stock of just how well active ETFs have done. Since 2020, the category has expanded massively both in AUM and in count, and this year especially they’ve stepped up for investors. The spring swoon for markets saw active international ETFs like AVDV boost portfolios. Perhaps most significant, however, is that performance is more than a flash in the pan — it’s the culmination of years of outperformance.
See more: VIDEO: ETF of the Week: AVDV
The Avantis International Small Cap Value ETF (AVDV ) charges a 36 basis point fee for its approach. The strategy, which leans on its active managers and the firm’s systematic, fundamental research approach, targets ex-U.S. small-cap value opportunities.
Active International ETFs
That helped investors this year, with the fund returning 34% YTD, according to ETF Database. That didn’t just outperform its ETF Database Category and FactSet Segment averages in that time. It also outperformed the SPDR S&P 500 ETF Trust (SPY ) in that time frame, which is up 10.3% in that same time period, per YCharts data.
What’s important to understand, however, is that performance isn’t just the result of tariff panic. Active international ETFs — and AVDV, in particular — have delivered for years. Returning to the fund’s ETF Database data, AVDV has returned 20.2% over three years and 16.1% over five years. That also outperformed its averages. Its averages returned 14.6% and 19.8% over three years and 10% and 5.35% over five years, respectively.
The strategy has done so thanks to active management targeting fundamental criteria like shares outstanding, cash flow, price-to-book value, and more. Its ascendance offers an example of how active international ETFs are just part of the overall rise of active ETFs delivering on their promise.
“When we entered the industry in early 2018, all of the active assets in the industry had less than $50 billion total,” said American Century Investments Head of ETF Product and Strategy Sandra Testani. “If you fast-forward to where we are today, we crossed over that $1.1 trillion mark in the U.S.”
“It’s been significant growth,” she added. “Year to date, we’re seeing almost 40% of the flows being attracted to the active space. It’s just been really impressive to see this evolution in the industry.”
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