AVUV ETF Review - Avantis U.S. Small Cap Value ETF

Рет қаралды 6,731

Күн бұрын

AVUV is a relatively new targeted factor ETF from Avantis for U.S. small cap value stocks. I review it here.
// TIMESTAMPS:
00:00 - Intro
00:06 - Primer on Factors
01:19 - The Case for AVUV and Avantis
02:12 - AVUV Performance
02:36 - AVUV Factor Loadings
02:55 - Conclusion - Is AVUV a Good Investment?
// SUMMARY:
By sheer assets, VBR from Vanguard seems to be the most popular choice for U.S. small cap value stocks. If you're reading this post, there's a pretty good chance you already own it.
Unfortunately, VBR is neither very small nor very value-y. That is, it basically tilts mid-cap and has smaller factor loadings compared to other options in the space, of which there are many now. I'll go ahead and give away the punchline. I compared a handful of the most popular small cap value funds in a separate post here and crowned AVUV the winner.
Dimensional Fund Advisors (DFA for short) have long been the gold standard for factor funds. A few years back, some folks from Dimensional left to create Avantis, so it shares DFA pedigree. Avantis have quickly boasted their competency as a fund providers in creating some of the best factor funds around.
Enter AVUV, their offering for ultra-targeted factor exposure in U.S. small cap value stocks.
I think AVUV is a fine choice for those wanting superior factor tilts with U.S. small cap value stocks, even for Bogleheads. To offer some social proof, savvy investors much smarter than myself within the Rational Reminder community (the forum for the eponymous podcast from Ben Felix and Cameron Passmore of PWL Capital) like this fund a lot, and it's even part of their model portfolio.
That said, I'm of the mind that one should always understand and be comfortable with what they're buying to hold for the long term. AVUV is arguably for the more advanced, die-hard factor investor who can stay the course without feeling unease or tracking error regret, not only from comparing AVUV to its indexed competitors, but also from potentially seeing the small cap value segment as a whole underperform for extended periods.
Assess whether or not you want to factor tilt at all, and if so, whether or not you want to use a young, pricier, ultra-targeted fund to do so. I can't answer that for you.
Read the blog post here: www.optimizedportfolio.com/avuv/
#smallcapvalue #factorinvesting #etfs
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Пікірлер: 76

@OptimizedPortfolio Жыл бұрын

What do you think of AVUV from Avantis? Do you own it or any other ETFs for small cap value stocks?

@JohnnyBananas7x 11 ай бұрын

I own and i like

@groseromedia Ай бұрын

I just started buying AVUV today to complement my S&P 500 holding. It's a part of my "growth allocation" haha. Your videos have helped a lot in terms of my research for Small Cap value and this specific fund. Thank you sir!

@OptimizedPortfolio Ай бұрын

Thanks for sharing!

@4tomop 5 ай бұрын

terrific series of videos - Thank you for making this information so accessible.

@OptimizedPortfolio 5 ай бұрын

Glad you like them!

@TJ-Stackin Жыл бұрын

AVUV is my favorite! Thanks for the great video.

@OptimizedPortfolio Жыл бұрын

Thanks, TJ! Hard not to love this fund. Others apparently feel the same, because it is Avantis's most popular.

@TJ-Stackin Жыл бұрын

@@OptimizedPortfolio Yes! I have it avuv 25% in my Roth and HSA 👍

@maxk3062 Жыл бұрын

Great video. Love the new background

@OptimizedPortfolio Жыл бұрын

Thanks!

@animaldonut Жыл бұрын

Great video! I like your “Value Investor” meme checking out AVUV. That’s awesome. I’m a subscriber already, really enjoy your videos! ✨ 🏆

@OptimizedPortfolio Жыл бұрын

Thanks so much! Really glad you're enjoying them! :)

@deanturnertraining Жыл бұрын

Great video, John. Thank you for all the content you put out. You will have 100k+ subs in no time!

@deanturnertraining Жыл бұрын

Follow up: I think a short video discussing the nature of Avantis Funds’ “active management” could be a big winner for you. Plenty of people have been scared out of active management due to ARK-type strategies + the general narrative surrounding passive/active. You did a great job of briefly summarizing in this video but a video specifically dedicated to that topic could be great IMO!

@OptimizedPortfolio Жыл бұрын

Thanks! That would be nice. 👍🏻

@OptimizedPortfolio Жыл бұрын

@@deanturnertraining Great point. Thanks for the suggestion! Video coming sometime in the future on this idea of the myth of "passive": www.optimizedportfolio.com/passive-is-a-myth/

@bsquadrider Жыл бұрын

Great info, I've had all of my small cap value invested in vbr before I learened of avuv. Now I have about 1/2 in each.

@OptimizedPortfolio Жыл бұрын

Thanks for sharing, Brandon!

@christopherriccobono1419 Жыл бұрын

Avuv is an amazing fund as are many of the Avantis funds. Keep up these videos

@OptimizedPortfolio Жыл бұрын

Thanks!

@stephengerrard6412 Жыл бұрын

Excellent. Your videos are always add so much value. Who is the custodian? Looking forward a key question is whether AI will negatively impact small cap value more than large cap growth

@OptimizedPortfolio Жыл бұрын

Thanks, Stephen! American Century Investments backs Avantis.

@floridaboy7273 Жыл бұрын

DCA into AVUV ETF on a monthly basis. In it for long term . Great review.

@OptimizedPortfolio Жыл бұрын

Thanks!

@analyticsx3 Жыл бұрын

I have both AVUV and international AVDV. Great long term funds. Would love to hear your opinion on GRID as a long term hold.

@OptimizedPortfolio Жыл бұрын

Thanks for sharing. Hadn't heard of GRID but looks like a pricey narrow industry play.

@DIXIFREELY 11 ай бұрын

Im trying to decide b/w going with AVUV which has exposure to both small and mids or going with a combo of RWJ and RFV. Thanks for the video.

@OptimizedPortfolio 11 ай бұрын

Thanks for watching!

@seanharrington4768 Жыл бұрын

Great Piece - I added $AVUV to my Roth IRA account earlier this year !!

@OptimizedPortfolio Жыл бұрын

Thanks!

@johnjoe_247 Жыл бұрын

Got it ! still holding VBR until it gets out of the red , purchasing only AVUV from here on out DCA'ing

@OptimizedPortfolio Жыл бұрын

Awesome!

@m.morininvestor9920 Жыл бұрын

I hesitate between AVUV and SPHQ Quality factor etf

@Ehhhh123 3 ай бұрын

How does the increased popularity of passive investing into index funds and the increased number of investors who soley invest into the s&p 500(large cap) or tech funds affect the small cap value premium going into the future? Can small cap value keep its history of outperformance if investors are mainly taught these days to just blindly keep investing into the s&p 500 (large cap)and tech (qqq)? Where will capital inflows come in to increase scv value if all the money will consistently keep pouring into s&p 500/ tech by the new generation of passive investors?

@OptimizedPortfolio 3 ай бұрын

It doesn't. It sounds like you might think AUM = price discovery; it doesn't. See my video here: kzfaq.info/get/bejne/rNGUq8Sa392rfKM.html

@kylel8954 Жыл бұрын

Great video… I’ve struggled between picking between AVUV and SLYV. I’m currently SLYV. That “active” tag and short lifespan give me pause. Although Avantis really seems to be filling some spaces in my optimal portfolio, for example AVDV. Really looking forward to seeing how this company performs going forward.

@OptimizedPortfolio Жыл бұрын

Thanks, Kyle! SLYV is definitely a great choice too. I used to own that index via VIOV. I'd even venture to say its index construction is just as "active" as AVUV.

@kylel8954 Жыл бұрын

@@OptimizedPortfolio Gotcha! I went with SLYV over VIOV because of the smaller bid/ask/spread, but I am definitely getting more comfortable with the idea of swapping out SLYV for AVUV. I’m hoping they come out with a EM small cap value at some point too. Similar to DFAs DEMSX fund, but obviously in an ETF. Currently using EWX to fill that space.

@OptimizedPortfolio Жыл бұрын

@@kylel8954 Have you looked at AVES or DGS?

@kylel8954 Жыл бұрын

@@OptimizedPortfolio I have. I looked into both of those after another of your videos! AVES was too large for what I wanted. If I were going to swap currently it’d be to DGS. I’m using M1 finance and following Paul Merriman/Chris Pedersen’s aggressive 2 funds for life strategy. The 2nd “pie” I currently have built to work with the TDF is 70% SLYV, 20% AVDV, and 10% EWX.

@OptimizedPortfolio Жыл бұрын

@@kylel8954 I gotcha. Cool cool.

@foodguy3435 Жыл бұрын

I’d love to see an analysis of SYLD

@6toolbaseball Жыл бұрын

You mean SLYV?

@foodguy3435 Жыл бұрын

@@6toolbaseball no Syld it’s called Cambria shareholder yield

@OptimizedPortfolio Жыл бұрын

Thanks for the suggestion!

@jaymckay88 8 ай бұрын

Just bought around 15 shares planning on investing weekly

@OptimizedPortfolio 8 ай бұрын

Thanks for watching, Jason!

@Wbrundog Жыл бұрын

I just moved my Roth to M1 and replaced VBR with AVUV 👍👍

@OptimizedPortfolio Жыл бұрын

Thanks for sharing!

@Wbrundog Жыл бұрын

@@OptimizedPortfolio thanks for all your work and videos. I learn from you!

@OptimizedPortfolio Жыл бұрын

@@Wbrundog Thanks for the kind words! Glad you're learning! :)

@jakal911 3 ай бұрын

10-12% of my liquidity is in AVUV. I like it.

@OptimizedPortfolio 3 ай бұрын

Awesome!

@DavidJacobs-io8sk Ай бұрын

With AUM of over $10 billion, at what size do you think AVUV becomes too large that it may impact alpha potential?

@OptimizedPortfolio Ай бұрын

If we believe small cap value delivers true systematic risk premia, it wouldn't.

@bradyschroeder5435 Жыл бұрын

Still waiting for a video overview of the Ginger Ale Portfolio ;)

@OptimizedPortfolio Жыл бұрын

Will do that one at some point. :)

@Ehhhh123 6 ай бұрын

I noticed that in your ginger ale portfolio you held developed markets scv and emerging markers scv at equal weightings. Is there a reason you did that instead of mirroring the weighting of vxus/vtiax which has emerging markets at 25% and developed markets at 75%?

@OptimizedPortfolio 6 ай бұрын

I explained that in my post on that portfolio - basically the lower correlation and expected premium of Emerging Markets.

@Ehhhh123 6 ай бұрын

@@OptimizedPortfoliothank you, your videos have been really helpful

@OptimizedPortfolio 5 ай бұрын

@@Ehhhh123 Glad to hear it!

@conrad_t Жыл бұрын

If you’re capable of holding 10+ years of underperforming if the value and size premium “disappear” AVUV is a no brainier

@OptimizedPortfolio Жыл бұрын

Fingers crossed.🤞

@DK-pr9ny Жыл бұрын

Small caps have been lagging this year. Hopefully they turn around soon.

@OptimizedPortfolio Жыл бұрын

Indeed. Jan. and Feb. were good. March and April weren't.

@jasonhobbs2405 Жыл бұрын

I like and own AVUV. But I kinda wish people would stay quiet about it (glare at John). I worry that if AUM grows too much it will hinder its ability to enter and exit positions without moving the prices too much. John, are my concerns unfounded?

@OptimizedPortfolio Жыл бұрын

Haha wouldn't worry about that too much.