Avantis Investors® by American Century Investments® Launches Suite of Low-Cost Exchange Traded Funds
KANSAS CITY, Mo. September 26, 2019 – Avantis Investors® , by American Century Investments® , has launched its five inaugural low-cost, broadly diversified exchange traded funds (ETFs): Avantis International Small Cap Value ETF (AVDV), Avantis International Equity ETF (AVDE), Avantis Emerging Markets Equity ETF (AVEM), Avantis U.S. Equity ETF (AVUS) and Avantis U.S. Small Cap Value ETF (AVUV). Listed on the NYSE ARCA, the new ETFs are designed to fit seamlessly into investors' asset allocations.
As a unique feature designed to benefit various types of investors, gross expense ratios for the five ETFs and soon-to-be-launched mutual funds are expected to have the same objective:
International Small Cap Value: 0.36%
International Equity: 0.23%
Emerging Markets Equity: 0.33%
U.S. Equity: 0.15%
U.S. Small Cap Value: 0.25%
"While we know investors have a lot of choices available to them in the marketplace, we believe there is still considerable demand for broadly diversified solutions that seek low rebalancing costs, capital gains and fees," said Avantis Investors Chief Investment Officer Eduardo Repetto, PhD. "We are excited to speak with clients about these capabilities and learn what else we can do to help them meet their financial goals."
Avantis Investors' ETFs share a common approach built upon an academically-supported, market-tested framework that aims to identify securities with higher expected returns¹ based on their current market prices and other company financial information. As part of its portfolio management and trading processes, the team analyzes whether the perceived benefits of a trade overcome its associated costs and risk. This approach aims to harness return premiums while seeking to control implementation costs and mitigate portfolio risk to generate enhanced returns over time. The term "Avantis" is a derivative of the Italian word for "going forward" and evokes the forward-looking and sophisticated methodology utilized by the new solutions.
Information about the five ETFs, which all seek long-term capital appreciation, follows:
Avantis International Small Cap Value ETF (AVDV) -- The fund primarily invests in a broad group of non-U.S. small cap value companies believed to have higher expected returns across developed market countries, sectors and industries. The portfolio is designed to help investors achieve higher expected returns by investing in non-U.S. developed small cap companies believed to be trading at low valuations and with higher profitability ratios, seeking broad diversification across companies, industrial sectors and countries in order to mitigate concentration risk.
Avantis International Equity ETF (AVDE) -- The fund primarily invests in a diverse group of companies of all market capitalizations, across non-U.S. developed market countries, sectors and industries, emphasizing investment in companies believed to have higher expected returns. The portfolio is designed to help investors achieve higher expected returns and broad diversification by investing in a broad set of large, mid and small capitalization companies across non-U.S. developed countries. To increase expected returns, the strategy deviates from market capitalization weights by overweighting securities trading at lower valuations and with higher profitability ratios.
Avantis Emerging Markets Equity ETF (AVEM) -- The fund primarily invests in a diverse group of companies of all market capitalizations, across emerging market countries, sectors and industries, emphasizing investment in companies believed to have higher expected returns. The portfolio is designed to help investors achieve higher expected returns and broad diversification by investing in a broad set of large, mid and small capitalization companies across emerging market countries. To increase expected returns, the strategy deviates from market capitalization weights by overweighting securities believed to be trading at lower valuations and with higher profitability ratios.
Avantis U.S. Equity ETF (AVUS) -- The fund invests primarily in a diverse group of U.S. companies of all market capitalizations, across sectors and industries, emphasizing investment in companies believed to have higher expected returns. The portfolio is designed to help investors achieve higher expected returns and broad diversification by investing in a broad set of U.S. large, mid and small capitalization companies. To increase expected returns, the strategy deviates from market capitalization weights by overweighting securities believed to be trading at lower valuations and with higher profitability ratios.
Avantis U.S. Small Cap Value ETF (AVUV) -- The fund primarily invests in a broad group of U.S. small cap value companies believed to have higher expected returns across sectors and industries. The portfolio is designed to help investors achieve higher expected returns by investing in U.S. small cap companies believed to be trading at low valuations and with higher profitability ratios, seeking broad diversification across companies and industrial sectors in order to mitigate concentration risk. For more information about the ETFs, visit www.AvantisInvestors.com.
All five ETFs are comanaged by Repetto, Senior Portfolio Manager Daniel Ong, CFA, Senior Portfolio Manager Mitchell Firestein and Senior Portfolio Manager Ted Randall.
Repetto previously served as co-chief executive officer/chief investment officer of Dimensional Fund Advisors (DFA) until 2017. His career with DFA spanned 17 years and included serving as chief investment officer beginning in 2007 and co-chief executive officer starting in 2009.
Ong also served as a senior portfolio manager and vice president at DFA for 14 years. Prior to that, he held positions with Metropolitan West Asset Management and Pacific Investment Management Company. Prior to joining Avantis Investors, Firestein was a senior portfolio manager and vice president at DFA for 14 years. Randall has prior experience as a portfolio manager and vice president at DFA, where he served for 17 years.
The innovations of Avantis Investors rest on the established foundation of American Century Investments, a global asset manager founded more than 60 years ago, known for industry-leading client care, stewardship and stability, according to Repetto.
"Avantis Investors was established by American Century to help clients achieve their investment goals through a persistent focus on providing well-diversified investment solutions," said Repetto. "By combining the latest in financial science with efficient implementation of time-tested academic research, we believe our new low-cost solutions represent an evolutionary step forward for both passive and active approaches."
The launch of the five ETFs is the culmination of a busy summer for Avantis Investors. American Century announced the hiring of Repetto and Patrick Keating, Avantis' chief operating officer, and the opening of Avantis Investors' Los Angeles office in June. Rounding out the leadership and investment team of Repetto, Keating, Ong, Firestein and Randall is Director of Investments Philip McInnis, who previously served as Head of Portfolio Solutions at DFA and was with Towers Watson prior to that. The firm also recruited industry veterans in a buildout of its client relationship team.
American Century Investments is a leading global asset manager focused on delivering investment results and building long-term client relationships while supporting research that can improve human health and save lives. Founded in 1958, American Century Investments' 1,300 employees serve financial professionals, institutions, corporations and individual investors from offices in New York; Los Angeles; London; Hong Kong; Sydney; Frankfurt, Germany; Mountain View, Calif.; and Kansas City, Mo. Jonathan Thomas is president and chief executive officer, and Victor Zhang serves as chief investment officer. Delivering investment results to clients enables American Century Investments to distribute over 40 percent of its dividends to the Stowers Institute for Medical Research, a 500-person, non-profit basic biomedical research organization. The Institute owns more than 40 percent of American Century Investments and has received dividend payments of $1.5 billion since 2000. For more information about American Century Investments, visit americancentury.com.
¹Valuation theory shows that the expected return of a stock is a function of its current price, its book equity (assets minus liabilities) and expected future profits, and that the expected return of a bond is a function of its current yield and its expected capital appreciation (depreciation). We use information in current market prices and company financials to identify differences in expected returns among securities, seeking to overweight securities with higher expected returns based on this current market information. Actual returns may be different than expected returns, and there is no guarantee that the strategy will be successful.
You should consider the fund's investment objectives, risks, and charges and expenses carefully before you invest. The fund's prospectus or summary prospectus, which can be obtained by visiting avantisinvestors.com or calling 833-928-2684, contains this and other information about the fund, and should be read carefully before investing. Investments are subject to market risk.
Exchange Traded Funds (ETF) are bought and sold through exchange trading at market price (not NAV), and are not individually redeemed from the fund. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.
International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
Historically, small- and/or mid-cap stocks have been more volatile than the stock of larger, more-established companies. Smaller companies may have limited resources, product lines and markets, and their securities may trade less frequently and in more limited volumes than the securities of larger companies.
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
Exchange Traded Funds (ETFs): Foreside Fund Services, LLC – Distributor, not affiliated with American Century Investment Services, Inc.
Mutual Funds: American Century Investment Services, Inc., Distributor.
©2019 American Century Proprietary Holdings, Inc. All rights reserved.
