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9 Avantis ETFs for Reliably Targeted Factor Exposure (Review)

Last Updated: February 6, 2023 24 Comments – 5 min. read

Avantis is a new asset management firm created by former Dimensional Fund Advisors employees. Here we’ll review 9 Avantis ETFs for targeted, low-cost factor exposure.

Disclosure:  Some of the links on this page are referral links. At no additional cost to you, if you choose to make a purchase or sign up for a service after clicking through those links, I may receive a small commission. This allows me to continue producing high-quality, ad-free content on this site and pays for the occasional cup of coffee. I have first-hand experience with every product or service I recommend, and I recommend them because I genuinely believe they are useful, not because of the commission I get if you decide to purchase through my links. Read more here.

Contents

  • Introduction – Avantis ETFs
  • AVUS – Avantis U.S. Equity ETF
  • AVDE – Avantis International Equity ETF
  • AVEM – Avantis Emerging Markets Equity ETF
  • AVUV – Avantis U.S. Small Cap Value ETF
  • AVDV – Avantis International Small Cap Value ETF
  • AVES – Avantis Emerging Markets Value ETF
  • AVGE – Avantis All Equity Markets ETF
  • AVRE – Avantis Real Estate ETF
  • AVIG – Avantis Core Fixed Income ETF
  • Where To Buy These Avantis ETFs

Introduction – Avantis ETFs

Avantis Investors are the new kid on the block, but don’t think that means they lack experience or that they are in any way a suboptimal fund provider. Avantis was started by a few people who left Dimensional Fund Advisors (DFA), considered the gold standard for factor tilt funds. As such, Avantis shares Dimensional DNA, which is a good thing.

avantis etfs logo

Like DFA, Avantis provide relatively affordable but extremely reliable and appreciable factor exposure, specifically for Size, Value, and Profitability. So far, Dimensional’s new ETFs only provide all-cap, broad market exposure, specifically for the U.S., ex-US Developed Markets, and Emerging Markets. Avantis has those plus a couple more specifically for small cap value.

Just like Dimensional, Avantis draws on the most robust academic research in finance combined with expert implementation to overweight drivers of returns that we would expect to both beat the market and conveniently mitigate portfolio risk over the long term. As a result, investors get the benefits of low-cost, diversified index investing and purposefully targeted factor investing in one vehicle.

Avantis is arguably the first firm to bring these sorts of sophisticated methodologies to retail investors with an affordable price tag. Chief Investment Officer Eduardo Repetto, who spent nearly two decades at DFA and was their co-CEO, said:

Our experience has shown us that investors are looking for reliable, diversified strategies that can add value over indexes and are cost-effective. That’s what we plan to build.

Avantis is also backed by the well-known asset manager American Century Investments.

Now we’ll review the most popular Avantis ETFs.

AVUS – Avantis U.S. Equity ETF

As the name suggests, the Avantis U.S. Equity ETF (AVUS) aims to provide broad U.S. market exposure, with an active, light factor tilt toward stocks with strong profitability metrics (Profitability) and a lower relative price (Value). It also has a very small positive loading on Size, so its average market cap is lower than that of the market.

Think basically a U.S. stock market index fund that we would expect to beat the market (and have lower volatility and risk) over the long term based on the best academic research. I delved into AVUS in more detail in a separate post here.

In its extremely short lifespan thus far since January 2020, AVUS has outperformed the S&P 500 index. Hopefully the Value premium is making a resurgence.

Morningstar even named this fund their “favorite new launch of the year” in 2019.

AVUS has nearly $1 billion in assets, over 2,000 holdings, and an expense ratio of 0.15%.

AVDE – Avantis International Equity ETF

AVDE takes the same approach described for AVUS above, but this time for Developed Markets outside the United States. AVDE has an expense ratio of 0.23%. So far the factor loading on this one doesn’t look terribly different from plain ol’ VEA from Vanguard and may not be worth its higher fee (VEA is only 5 basis points). Bogleheads may want to stick with Vanguard funds for simplicity anyway. I plan to keep an eye on these.

AVEM – Avantis Emerging Markets Equity ETF

AVEM applies Avantis’s approach to Emerging Markets. I’m a fan of overweighting Emerging Markets relative to Developed Markets in a US-heavy portfolio, as Developed Markets are highly correlated to the U.S. and thus don’t offer as much of a diversification benefit as Emerging Markets.

Here too, though, this fund’s factor exposure doesn’t look materially different from that of Vanguard’s VWO, which costs 8 basis points. This may change as time goes on. That said, these first 3 are arguably good for the novice investor who wants to dip their toes into factor investing.

I might even prefer WisdomTree’s XSOE here, which seems to capture smaller, more profitable companies with more conservative investment policies (i.e. comparatively more exposure to Size, Profitability, and Investment).

AVEM has the highest expense ratio of the three at 0.33%.

AVUV – Avantis U.S. Small Cap Value ETF

Previously, the S&P SmallCap 600 Value Index (via IJS, VIOV, or SLYV) was the go-to index to capture U.S. small-cap value. AVUV is a very new product, but in its short lifetime, it has achieved slightly better exposure to the Value premium, and comparatively much more exposure to the Profitability factor. I delved into the details of these U.S. small value ETFs here, out of which AVUV seems like the clear winner. AVUV recently replaced VIOV in my own portfolio. I also covered AVUV specifically in its own separate post here.

In a nutshell, AVUV has been doing a great job so far of capturing small, undervalued stocks with strong financials. I think this one is where Avantis shines.

This has not gone unnoticed, as AVUV is Avantis’s most popular fund.

AVUV’s expense ratio is 0.25%, which is worth the superior factor loading in my opinion. 

AVDV – Avantis International Small Cap Value ETF

AVDV is the international version of AVUV above, targeting small cap value stocks in ex-US Developed Markets. The fund has over $500 million in assets and a fee of 0.36%.

AVES – Avantis Emerging Markets Value ETF

AVES is a newer Emerging Markets ETF from Avantis for more aggressive factor targeting than the previous AVEM. It has outperformed AVEM in its short lifespan since its launch in late 2021, but costs slightly more at 0.36%.

While I questioned whether AVEM is worthwhile over a cheaper, plain, indiscriminate index fund for Emerging Markets like VWO, AVES deviates much more and may indeed compensate investors for its greater fee via its vastly superior loadings.

AVGE – Avantis All Equity Markets ETF

AVGE is another newer fund from Avantis that launched in late 2022. This is a fund of funds – the first from Avantis – to essentially capture the entire global stock market with the addition of light factor tilts. That said, the fund does have home country bias for the U.S. with international exposure of only about 30%.

Also note that we’d consider this fund to be more truly actively managed than others on this list in terms of managers’ freedom to allocate among different assets within the fund.

Because it is a fund of funds, American AVGE investors should get the benefit of pass-through foreign tax credits on some of its holdings, whereas a plain indexed global equities fund like VT from Vanguard is not eligible for one.

I covered AVGE in more detail in a dedicated post here.

AVGE has an expense ratio of 0.23%.

AVRE – Avantis Real Estate ETF

It’s worth noting that broad Avantis funds like AVUS exclude REITs, so investors, particularly those focused on income, may want a dedicated REITs fund in their portfolio. AVRE is Avantis’s offering for global REITs exposure.

The fund has an expense ratio of 0.17%.

AVIG – Avantis Core Fixed Income ETF

Avantis also have a few offerings for fixed income assets, one of which is AVIG, which gets you covered globally with a variety of investment-grade debt obligations from multiple types of issuers.

AVIG has an effective intermediate duration of about 7 years and a fee of 0.15%.

Where To Buy These Avantis ETFs

Thankfully, all the above Avantis ETFs should now be available at any major broker. My choice is M1 Finance. The broker has zero trade commissions and zero account fees, and offers fractional shares, dynamic rebalancing, intuitive pie visualization, and a sleek, user-friendly interface and mobile app. I wrote a comprehensive review of M1 Finance here.


Disclosures: I am long AVUV and AVDV in my own portfolio.

Interested in more Lazy Portfolios? See the full list here.

Disclaimer:  While I love diving into investing-related data and playing around with backtests, I am in no way a certified expert. I have no formal financial education. I am not a financial advisor, portfolio manager, or accountant. This is not financial advice, investing advice, or tax advice. The information on this website is for informational and recreational purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. Do your own due diligence. Past performance does not guarantee future returns. Read my lengthier disclaimer here.

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About John Williamson

Analytical and entrepreneurial-minded data nerd, usability enthusiast, Boglehead, and Oxford comma advocate. I lead the Paid Search marketing efforts at Gild Group. I'm not a big fan of social media, but you can find me on LinkedIn and Reddit.

Reader Interactions

Comments

  1. James says

    October 4, 2022 at 3:14 pm

    Any thoughts on the new Avantis Global Equity ETF AVGE as an all-in one factor solution?

    Reply
    • John Williamson says

      October 4, 2022 at 8:50 pm

      AVGE looks like a nice one-fund solution. I’ll write it up at some point.

      Reply
    • John Williamson says

      October 20, 2022 at 3:33 pm

      James, I just published a post on AVGE here.

      Reply
  2. Andrew says

    June 3, 2022 at 11:32 am

    For my SCV tilt, is AVUV that different / preferable to VSIAX? Most of my money is at Vanguard so the funds there (incl. fractional purchases) is easier. But if AVUV is truly capturing the factors distinctly, I’ll work around that.

    Reply
    • John Williamson says

      June 6, 2022 at 2:03 pm

      Hey Andrew, I delved into that here.

      Reply
  3. Derek says

    April 8, 2022 at 7:16 am

    How crazy am I to use AVUV, AVDV and AVES in my taxable account? My allocation would look something like this:

    VTI – 55%
    VXUS 20%
    AVUV – 15%
    AVDV – 5%
    AVES – 5%

    How concerned should I be from a tax efficiency standpoint by adding the Avantis funds? Right now I’m VTI/VXUS. Thanks!

    Reply
    • John Williamson says

      April 9, 2022 at 4:44 pm

      Not too crazy but definitely less tax efficient.

      Reply
  4. Baron says

    March 25, 2022 at 5:16 pm

    Have you re-visited AVEM at all since you originally wrote this article? Sitting here in March 2022 it looks like they do now have more of an appreciable large (and mid) value tilt than VWO, looking at their Morningstar pages, but I’m curious what your thoughts are.

    Reply
  5. Brian Strong says

    December 9, 2021 at 7:27 am

    You are missing AVES. Sadly, at this time, is still not available on M1.

    Reply
    • John Williamson says

      December 9, 2021 at 9:49 am

      It’s pretty new.

      Reply
      • Dror Hazan says

        March 29, 2022 at 2:09 am

        Would love hearing your opinion regards AVES. I currently considering how to broaden my exposure to em, and puzzled between the 3 VWO, AVEM & AVES

        My protfolio
        60 vwra
        25 avuv
        15 avdv

        Reply
        • John Williamson says

          January 19, 2023 at 5:18 pm

          Dror, I just updated this post to include AVES.

          Reply
    • John Williamson says

      January 19, 2023 at 5:20 pm

      Just updated this post to include AVES.

      Reply
  6. Alan Koslowski says

    September 15, 2021 at 2:13 am

    While the factor tilts of AVUS, AVDE, and AVEM might seem modest, their average market cap is about 50% the size of Vanguard funds and have more of a value slant. As such they’re essentially value-enhanced index funds. Using them seems simpler than combing. AVUV and AVDV with conventional index funds, though of course the latter approach allows for a more pronounced small-cap value tilt.

    Reply
    • John Williamson says

      September 15, 2021 at 9:05 am

      Indeed. Good summary. Basically comes down to how much simplicity one desires.

      Reply
      • Alan Koslowski says

        September 26, 2021 at 12:13 am

        Yes, and I’m guessing Avantis structures them with a level of factor slant to both improve expected returns and reduce volatility. As Ben notes while a light to moderate factor slant increases expected risk adjusted returns while too much actually reduces it.

        Combining AVUS, AVDE, and AVEM with a total world bond market fund like BNDW seems like a great all weather portfolio. Something like this would likely produce consistent returns while limiting volatility.
        45% AVUS
        20% AVDE
        15% AVEM
        20% BNDW

        Reply
  7. tom V waldron says

    August 10, 2021 at 8:05 pm

    This site is very helpful for the DIY person (average joe). Love the M1 Links….

    Reply
    • John Williamson says

      August 10, 2021 at 8:10 pm

      Thanks, Tom! Glad you’ve found it helpful!

      Reply
  8. Chris says

    May 12, 2021 at 5:26 pm

    Thanks for all your great work on this site. I wish M1 was in Australia at this time, hopefully one day, have you heard anything?

    I was wondering re your thoughts on AVEM vs VWO which you use in your ginger ale model?

    Also have you reached any conclusions as yet on sector type ETF’s to target EV’s ,Batteries etc or sustainability ‘leaders/ innovators’ etc or are they too expensive / too mixed up or worth considering?

    Once again congratulations.

    Reply
    • John Williamson says

      May 12, 2021 at 8:30 pm

      Thanks for the kind words, Chris!

      Haven’t heard any plans for M1 in Australia. So far AVEM and VWO don’t look materially different from each other, but I’ve basically got my EM exposure split between them. VWO is in one account and AVEM is in another.

      I did recently do a post on EV ETFs here.

      Reply
  9. vinicius querino andraus says

    March 22, 2021 at 1:23 pm

    Should I use Avus instead of Voo even If I already have AVUV in my portfolio?

    Reply
    • John Williamson says

      March 22, 2021 at 1:49 pm

      Probably no reason to. AVUS would just be a diluted version of VOO + AVUV. We also ideally want to factor tilt within the small cap universe.

      Reply
      • Ken says

        July 20, 2022 at 8:48 am

        How would you feel about replacing VOO with AVUS?

        Reply
        • John Williamson says

          July 26, 2022 at 9:40 am

          Fine if one wants those mild factor tilts from AVUS.

          Reply

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