Avantis US Small Cap Equity ETF

AVSC

Market cap $2.81B

There has been a visible disparity between the performance of U.S. small-caps and U.S. large-caps so far this year. What hasn't been too visible is a lot of investor interest in the action.

These ETFs will soar if small-cap stocks roar back. These ETFs will soar if small-cap stocks roar back.

And what to look for when shopping for one.

Small-cap ETFs like AVSC, XSVM, BBSC, SVAL and EES are soaring in July, fueled by rate cut hopes, deep discounts and sector rebounds.

AVSC offers exposure to 1000+ small-cap stocks with attractive value and profitability characteristics. Its expense ratio is 0.25% and the ETF has $1.27 billion in assets under management. Exposure to the size factor is high, and AVSC's $1.44 billion weighted average market cap is one of the lowest among any U.S. Equity ETF trading today. Unfortunately, AVSC fails to deliver on its quality objective, mainly due to extreme diversification at the company level. Over 20% of the fund's holdings by weight are unprofitable.

Little-known China AI startup DeepSeek sent fear rippling throughout the markets this week by announcing major strides in its large language model technology at just a fraction of the cost of what many experts thought possible. That sparked a mini-collapse among big-cap tech stocks like Microsoft, Google, and Nvidia, which tumbled 20% at its low.

On this platform, VettaFi covers a wide range of ETF topics to keep advisors and investors informed. Thus far in 2024, we published more than 3,000 articles.

The US economy expanded at a faster-than-expected pace in the second quarter of 2024. Small-cap stocks generally lead the way higher on improving American economy.

Rate cuts are coming – the question is, when? Many market watchers are expecting at least one cut this Fall as the U.S. inflation rate has cooled.

2024 has presented many investors with a waiting game. Whether it's waiting for the Fed, waiting for inflation, or waiting for the election, lots of investors may be holding off on making important moves.