AVMA ETF Review - Avantis 1-Fund Factor Portfolio (60/40 + Factors)
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2 ай бұрынIn this video I'm reviewing AVMA, a factor-tilted asset allocation ETF from Avantis with global stocks and bonds.
// SUMMARY:
I've made videos previously about factor investing, diversification, and asset allocation. Avantis has now combined all three in a single fund that they call their Moderate Allocation ETF. The ticker is AVMA.
I previously covered AVGE, the first fund of funds from Avantis, which is global equities. But that's still only one asset class.
But what about for the risk-averse investor or retiree? Enter AVMA, which adds global bonds to the mix for what should usually be around a moderate 60/40 allocation, meaning 60% stocks and 40% bonds. I say “usually” because the fund has the freedom to oscillate between 30 and 40 percent for the fixed income side. Technically it will probably usually fall somewhere in the middle around 65/35.
60/40 is thought to be a very reasonable balance of risk and expected return. Now these investors have a single fund solution for their entire portfolio that can be well-diversified across multiple assets globally.
AVMA's target allocations are as follows:
US stocks at 47% - range of 40% to 60%.
ex-US Developed Markets stocks at 12% - range of 7% to 20%.
Emerging Markets stocks at 6% - range of 3% to 10%.
REITs at 2% - range of 0% to 5%.
Fixed income at 33% - range of 30% to 40%.
AVMA holds 16 of Avantis's own funds. It does so to granularly access equities with greater expected returns across all cap sizes. Just like with AVGE, AVMA aims for roughly global market cap weights with a slight US bias.
The current fund-of-funds lineup for AVMA looks like this:
29% AVUS - Avantis U.S. Equity ETF
21% AVIG - Avantis Core Fixed Income ETF
10% AVLV - Avantis U.S. Large Cap Value ETF
10% AVSF - Avantis Short-Term Fixed Income ETF
7% AVDE - Avantis International Equity ETF
4% AVEM - Avantis Emerging Markets Equity ETF
4% AVIV - Avantis International Large Cap Value ETF
3% AVUV - Avantis U.S. Small Cap Value ETF
3% AVSC - Avantis U.S. Small Cap Equity ETF
3% AVES - Avantis Emerging Markets Value ETF
2% AVRE - Avantis Real Estate ETF
1 AVDV - Avantis International Small Cap Value ETF
1% AVMV - Avantis U.S. Mid Cap Value ETF
1% AVMC - Avantis U.S. Mid Cap Equity ETF
0.5% AVEE - Avantis Emerging Markets Small Cap Equity ETF
0.5% AVDS - Avantis International Small Cap Equity ETF
Read the blog post here: www.optimizedportfolio.com/avma/
#investingforretirement #factorinvesting #avantisetfs
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@OptimizedPortfolio 2 ай бұрын
What do you think of AVMA from Avantis? Do you own it or are you planning to buy it?
@MrDboydeluxe 2 ай бұрын
Interesting seeing this video today, I’m looking at AVNV, their international/EM value etf version of a fund of funds, as I need more foreign exposure. Been a holder of AVUV, their signature etf for quite a while. Tops around. Now their mid and large cap value ETF’s are doing likewise. Thanks for the video.
@OptimizedPortfolio 2 ай бұрын
Thanks for sharing!
@joshlevy2593 2 ай бұрын
Great video and info as always. Thank you
@OptimizedPortfolio 2 ай бұрын
Thanks, Josh!
@seanharrington4768 2 ай бұрын
Great piece !!
@OptimizedPortfolio 2 ай бұрын
Thanks, Sean!
@ebrahimhabib477 2 ай бұрын
Great video as always and very well presented I like the Fund and I would immediately get into it but the problem as you said it didn’t caught up and has only $10 million. I guess I have to wait
@OptimizedPortfolio 2 ай бұрын
Thank you! Indeed, unfortunately AUM seems concerningly low at this point.
@pavXX 2 ай бұрын
Interesting fund. Bond allocation too high for my taste but looks like a solid portfolio option. Well thought out.
@OptimizedPortfolio 2 ай бұрын
Agreed
@ia6723 2 ай бұрын
Hello, I really like your video. I also like avantis ETFs I purchased some AVGV and AVMV, but I noticed that the Trading volume is very low, is this something I need to pay attention to? Will there be any long-term effects?
@OptimizedPortfolio 2 ай бұрын
Thanks! Volume is not much of a concern if you're just buying and holding, but would affect the bid-ask spread when you buy and sell. We'd be more concerned with low AUM meaning risk of closure.
@redgatefarm1483 2 ай бұрын
John, thanks for the video. I sometimes see the low-AUM comments about a particular fund (and understand the concern), but I don't recall ever reading what happens when a low-AUM fund is closed down. Do the investors have any advance notice, or does the manager just sell all the assets at a time of their choosing and distribute proceeds to the shareholders?
@OptimizedPortfolio 2 ай бұрын
Yea you'd get plenty of notices and if you didn't take any action, that last one would happen. Rule of thumb is anything less than $100M is at risk of closure, but of course there are plenty of exceptions. And here it's just a fund of funds so not exactly a whole separate product.
@redgatefarm1483 2 ай бұрын
@@OptimizedPortfolio John, thanks for the quick reply. I looked at the fund info at Morningstar and it's somewhat reassuring to see that all five managers have their own money invested in the fund. One manager is shown as having his investment between $100K and $500K.
@OptimizedPortfolio 2 ай бұрын
@@redgatefarm1483 Awesome!
@ebrahimhabib477 2 ай бұрын
Would you explain what’s can be the difference between these fund and other ones you made videos about them before Like NTSX or AOR
@OptimizedPortfolio 2 ай бұрын
So specific to those, AVMA here is basically global 65/35 with tilts toward sources of risk we call "factors," both in equities and bonds. AOR is pretty straightforward 60/40 global - no factor tilts and slightly lower fee. NTSX is pretty different and is 90/60 US stocks and US treasuries. Maybe I'll do a video comparing different allocation ETFs.
@ebrahimhabib477 2 ай бұрын
@@OptimizedPortfolio Billions of thanks and you are a such wonderful person best of luck and god bless you
@OptimizedPortfolio 2 ай бұрын
@@ebrahimhabib477 Thanks :)
@mere_cat 2 ай бұрын
Would be an interesting one-fund solution for a retiree. Of course, if a single retiree had $10 million in assets and bought into the fund, they would double the AUM overnight. Not sure the fund could support that kind of purchase.
@OptimizedPortfolio 2 ай бұрын
Indeed, curious to see if AUM ever takes off.
@Omar-et7sb 2 ай бұрын
I wish Avantis had more of these. Like the Vanguard LifeStrategies series. I would consider an Avantis ETF equivalent of VASGX, but 60/40 is too much fixed income for my tastes.
@OptimizedPortfolio 2 ай бұрын
Wouldn't be surprised if they rolled out other allocations in the future, but that probably depends on the success of this one. 60/40 makes sense as the one to start with to test the waters.
@siegfriedfurtwanglerknappe6188 2 ай бұрын
I wonder how global $AVIG really is, I mean its prospects talks about US and non-US credit, but its holding are almost all US. I personally wouldn't consider the fixed income portion globally diversified. Would be interested in hearing your thoughts on this.
@OptimizedPortfolio 2 ай бұрын
I noticed this as well while glancing at it but didn't dig too deep. My guess is they're just looking for the "best" bonds that fit their screens, regardless of where those bonds are. I'll look deeper and report back.
@siegfriedfurtwanglerknappe6188 2 ай бұрын
@@OptimizedPortfolio The problem with this is, that if the US unexpectedly hikes rates, the price of bonds will fall, but at the same time Switzerland and the EU might cut, making those rise. There's diversification in being exposed to different yield curves, even when currency hedged. I don't think this is a "best" bond scenario, it looks more like they just want US rate exposure. It's not like DFA's $DFGP for example, which is also US focused, but far more diversified.
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