Morningstar.com highlighted the challenge of finding reasonably priced investments in a market with expensive valuations. They pointed to value stocks, international stocks, small-cap stocks, and high-yield bonds as areas of relative opportunity, with the Avantis International Small Cap Value ETF (AVDV) offering exposure to three of these areas.

AVDV has seen significant success since its inception in September 2019, with $11.45 billion in total assets and an annualized total return of 11.62%. Its unique investment strategy focuses on selecting securities of companies with higher profitability and value characteristics, with an average market cap of $1.96 billion.

The ETF’s holdings are well-diversified, with the top 10 holdings accounting for just 8% of total assets. AVDV’s weighting methodology emphasizes market capitalization relative to other eligible securities, leading to a balanced portfolio. The fund’s top three countries by weight are Japan, the UK, and Canada, with significant exposure to industrials, materials, and financials.

Despite a 24% gain in the past year, AVDV’s five-year return is slightly lower than the S&P 500. However, the potential for reversion to the mean suggests that the ETF could close this performance gap in the next five years. For investors seeking exposure to international small-cap value stocks, AVDV offers a compelling opportunity for long-term growth. The AVDV ETF has top holdings in Marks & Spencer and Iveco Group, with a heavy investment in Asia Pacific and Europe. American investors may not recognize most holdings unless familiar with these regions. Despite this, AVDV is considered a great investment opportunity. Will Ashworth has no positions in mentioned securities. Source: Barchart.com.

Read more at Yahoo Finance: Avantis ETF Touches 52-Week High with Room to Run