In yet another indication of investors’ desire for foreign diversification, international small-cap value ETF AVDV has surpassed $10 billion in AUM. The Avantis International Small Cap Value ETF (AVDV ) reached that new threshold, thanks to almost $1 billion in flows over the last month. The fund’s rapid ascent this year, with almost $2.5 billion in net inflows YTD per ETF Database, speaks to growing interest in diversification.
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AVDV, which launched in 2019, charges a 36 basis point fee. The international small-cap value ETF actively invests in its segment, focusing on non-U.S. equities. AVDV emphasizes small-cap firms that meet value standards using fundamental criteria. Specifically, the strategy emphasizes metrics like shares outstanding, revenue, cash flow, expenses, and price-to-book value.
Together, that approach has helped the fund meet that new AUM milestone, but also perform, too. The ETF has returned 27.7% on a YTD basis, according to ETF Database. That outperformed the fund’s ETF Database Category average of 23.3% in that same time frame.
What about the fund’s approach might be driving that performance and its appeal? It’s one thing to invest in foreign firms, diversifying away from significant domestic bias. It’s another to find the right fund to do it. AVDV’s active approach can help it dig deeper into small-cap value contenders. Especially when looking abroad, an active approach can prove an important differentiator compared to just tracking an index.
The strategy joins the firm’s other $10-billion plus strategies, including the Avantis Emerging Markets Equity ETF (AVEM ). AVEM, which recently crossed that threshold, provides a broader international equities view than AVDV’s more specific approach. Looking ahead, funds like AVDV and AVEM can serve as strong building blocks for a portfolio’s non-U.S. holdings.
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