Avantis US Small Cap Value ETF

AVUV

Market cap $23.4B

Most small-cap funds give you size exposure. Avantis U.S. Small Cap Value ETF ( NYSEARCA:AVUV ) gives you something more targeted: a systematic bet that small, cheap, profitable companies outperform over time.

AI-related equity jitters are unlikely to be resolved overnight and eurozone government bonds could actually come out as a winner. Relative to euro rates, US equity volatility is reaching highs similar to previous crisis periods. A global rebalancing of portfolios could see significant demand for euro rates, mitigating the upward rate pressure.

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Avantis US Small Cap Value ETF offers diversified exposure to U.S. small-cap value stocks, targeting firms with strong fundamentals and low valuations. AVUV has delivered a 14.9% average annual return since inception, with a low 0.25% expense ratio and over $22B in assets as of February 2026. Small-cap value stocks are positioned for potential outperformance in 2026 due to lower interest rates, earnings growth, and rotation out of large-cap tech.

For years, value investing has felt akin to waiting for a train that keeps getting delayed. The market has rewarded unbridled growth at any price going back to the mid-2010s.

There's more to investing than just buying the giant S&P 500 Magnificent Seven stocks. Small stocks — and their ETFs — are gaining steam.

ETFs strategies have proliferated since the arrival of the ETF rule in 2019. The wrapper's myriad advantages, from tax efficiency to tradability, have made it a very popular choice for investors and asset managers alike.

Avantis U.S. Small-Cap Value ETF delivers superior risk-adjusted returns by targeting small-cap stocks that are both cheap and profitable. AVUV's rules-based, actively managed process filters for value and profitability, largely avoiding unprofitable companies and minimizing stock-specific risk through broad diversification. The fund's unique adjustments to valuation and profitability metrics, along with disciplined transaction cost management, underpin its performance edge over peers.

There's a lot of buzz about the opportunity in US small cap stocks this year. There's a confluence of factors that seem aligned just right for the segment, chief amongst them earnings growth expectations.

In my equity watchlist there will not be only the USA, I will closely follow global markets, especially factor strategies. In the bond segment, I really appreciate active management; I think passive ones will remain poorly able to capture the evolutions of 2026. Among the segments with alpha potential, I identify the small cap value segment due to lower valuations and better earnings expectations.