From CNBC: 2024-06-15 11:00:01

Investors concerned about concentration risk in the market should consider value-oriented investments. Avantis Investors’ Phil McInnis recommends a diversified approach over index funds, focusing on companies with low valuations and strong balance sheets. Avantis’ U.S. Large Cap Value ETF tracks the Russell 1000 Value index with a profitability overlay, providing better returns in the long run.

The Large Cap Value fund’s top holdings include Apple, Meta, JPMorgan, Costco, and Exxon Mobil. Financial services and retail sectors make up roughly 15% each of the portfolio, with energy at nearly 12%. Avantis ensures sector caps to prevent over-concentration, maximizing diversified exposure and minimizing risk.

Avantis’ U.S. Large Cap Value ETF has gained 7.7% in 2024, outperforming the Russell 1000 Value index’s 4.5% increase. The strategy of focusing on value companies with strong profitability has proven to be successful in the current market environment. Investors looking for long-term growth may find this ETF attractive.

Read more: Avoid concentration risk with this value play, ETF expert suggests