Avantis US Equity ETF

AVUS

Market cap $11.7B

Avantis US Equity ETF trades at an 11% P/E discount to the Russell 3000, reflecting disciplined stock selection and a conservative sector mix. AVUS has shifted slightly toward mega- and large-caps, increasing technology exposure, yet maintains overweight positions in energy and financials for value and inflation hedging. Performance has been in line with the Russell 3000, with 3- and 5-year annualized returns of 18.1% and 10.9%, but downside capture remains higher than most peers.

While performance comes first when it comes to funds, fees are nothing to sniff at. Even a few basis points can make all the difference at the end of a year or during retirement.

Most broad U.S. equity ETFs hand the biggest positions to the biggest companies, regardless of whether those companies are cheap or profitable.

AVUS: Impressive Depth Of Exposure But Imperfect Risks-Adjusted Returns, A Hold

Demand for American Century ETFs has been strong in 2025, with the firm gathering more than $21 billion of new money for U.S.-listed products. This success has been driven by the Avantis brand, where four ETFs have each crossed the $10 billion asset mark, and a fifth — the Avantis U.S.

Avantis US Equity ETF is an actively managed fund focusing on value and profitability, with over 1,900 stocks and a 0.15% expense ratio. AVUS offers broad diversification and value characteristics but has slightly underperformed the Russell 3000 benchmark since inception, with marginally higher risk. AVUS has lagged several leading actively managed U.S. equity ETFs in total return and Sharpe ratio over the past 3.5 years.

The Avantis US Equity ETF offers a portfolio heavily weighted toward large cap stocks with some added exposure to small-cap stocks, making it worth consideration for diversification. AVUS appears to have an attractive valuation based on a number of difference financial metrics with the potential for significant gains if the market rebounds. Despite its advantages, the fund has underperformed in recent years and carries the risk of continued struggles relative to its index due to active management.

As active ETFs and active investing grow in significance, so too have the different ways active funds can be used. While many understand active funds in contrast to passive, index funds, the reality is more intricate.

AVUS ETF targets U.S. companies with attractive valuations and high profitability, maintaining a low turnover ratio and broad market cap allocation. Despite its low valuation and competitive expense ratio, AVUS's performance has been mixed, underperforming some peers over 3- and 5-year periods. The fund's sector allocation emphasizes financial services and energy, with limited exposure to high-growth technology stocks, affecting its earnings growth potential.

My friend and industry veteran Dave Nadig used to call the exercise of interpreting ETF asset flows as “reading the tea leaves.” I have always loved that image because it suggests asset flows can be telling, but they are also open to interpretation.