As active ETFs continue to make strides in the ETF ecosystem, certain strategies have stood out. Active funds have contributed significantly to inflows for ETFs over the last few years as investors move out of mutual funds. One strategy that is standing out right now, the active equity ETF AVUS, recently reached a new AUM milestone that may invite investors to revisit its merits.
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The Avantis U.S. Equity ETF (AVUS ) recently surpassed $7 billion in total AUM. The strategy, which launched in September, 2019, has returned 20.5% over the last one year period per YCharts. Per VettaFi data, it has seen its AUM change on net by $2.5 billion over the last one year. The active equity ETF owes its AUM growth to both price influence and inflows, adding $1.35 billion in flows over the last one year.
What about the strategy, then, is drawing attention? Certainly, its performance has appealed, beating its benchmark over the last three years. Per Avantis Investors data, the strategy has returned 8.3% in that time compared to just 8.05% for its benchmark. The active equity ETF’s strategy, however, may stand out in particular.
AVUS actively invests, leaning into smaller firms with high profitability or value traits. It uses fundamental analysis, emphasizing criteria like shares outstanding, cash flow, revenue, expenses, and more. The strategy’s active approach can help it avoid certain firms or lean into others as needed. What’s more, that flexibility could help the strategy avoid potential headwinds like concentration risk. At the same time, its active remit can allow its managers to lean into potential tailwinds, too, like rate cuts, which impact sectors differently.
AUM may not be the be all, end all for all investors. However, for the active equity ETF AVUS, its new AUM threshold represents a milestone, and for some, a comforting amount of liquidity.
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