AVDV Profile
The Avantis International Small Cap Value ETF primarily invests in a diverse selection of non-U.S. small-cap value companies, spanning various market sectors, industry groups, and countries. This strategy enables the fund to capitalize on undervalued opportunities across different regions and industries. By focusing on small-cap value stocks, the ETF aims to provide investors with potential for significant growth, driven by companies that are often overlooked by larger funds.
Under normal market conditions, the fund commits to investing at least 80% of its assets in securities of small-capitalization companies. These small-cap companies are typically defined as those with market capitalizations that fall within the range of the MSCI All Country World ex USA Small Cap Index. By targeting this segment, the fund seeks to benefit from the growth potential and market inefficiencies that are more prevalent among smaller companies.
The fund’s strategy includes a rigorous selection process to identify value stocks that are trading below their intrinsic value. This involves analyzing various financial metrics, including price-to-book ratios, earnings yields, and cash flow metrics, to find companies with strong fundamentals that are priced attractively. The focus on value stocks aims to provide a margin of safety, reducing downside risk while positioning for upside potential as these companies are re-evaluated by the market.
In addition to direct investments in equity securities, the Avantis International Small Cap Value ETF may utilize derivative instruments such as futures contracts, currency forwards, and swap agreements. These derivatives are employed to manage risk, enhance liquidity, and improve overall portfolio performance. By using derivatives, the fund can hedge against currency fluctuations, gain targeted exposure to specific markets or sectors, and efficiently manage its cash flows. This comprehensive approach aims to deliver a robust and dynamic investment option, leveraging both traditional small-cap value equities and innovative financial instruments.
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