The age of large-caps may be over; has the age of small-caps begun? It certainly feels that way when looking at inflows into a small-cap value ETF like AVUV. The Avantis U.S. Small Cap Value ETF (AVUV ) already saw significant flows in the last month. Now, it has passed another impressive mark, with more than $5 billion in net inflows in just one year.
See more: Avantis Celebrates 5-Year Anniversary
The small-cap value ETF, which launched in September 2019, hit its fifth anniversary last month. The strategy charges a 25 basis point fee for its approach. AVUV actively invests in U.S. small-cap names based on fundamental criteria. It considers factors like cash flow, shares outstanding, revenue, and more. It aims to offer the benefits of indexing while also adding flexibility via active attributes.
Now, with its $5 billion of inflows, AVUV has surpassed $13 billion in AUM. The strategy may have seen its flows bump thanks to its five-year mark. It may, however, be benefiting from rate cuts benefiting smaller firms. Value small-caps, in particular, already underpriced by the market, could take those underrated advantages and lean on cheaper borrowing to push forward. AVUV has returned 15.7% over the last five years, per Avantis Investors. That has outperformed its benchmark’s 9.3% return in that time.
With many U.S. investors facing concentration risk with just a handful of large firms dominating, a small-cap value ETF could help. Looking ahead, AVUV could be poised to refresh portfolios. It also offers some notable momentum, with its price currently sitting above both its 50- and 200-day simple moving averages, per YCharts. With its own upside and potential to help diversify portfolios, the strategy may be one to watch.
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