Avantis Emerging Markets Equity ETF (AVEM) has surged over 30% YTD, long term outperforming peers like EEM with superior total returns and narrower drawdowns. AVEM actively overweights technology and Asian equities, particularly China, Taiwan, and India, comprising 77% of holdings. The ETF is unhedged, offering currency upside from dollar weakness, and holds both ADRs and local shares for diversified exposure.
Foreign equities investing has been one of the defining stories of the year. Even before 2025 got started, many investors were considering moving from underweight to neutral, at least, in ex-U.S. equities.
The ETF landscape continues to grow and evolve. Active ETF launches in particular are a key driver once again this year.
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The fund is a diversified investment vehicle focusing on emerging markets across a broad spectrum of industry sectors and countries. It aims to capture growth opportunities by investing in a wide range of companies, from large to small market capitalizations. The fund's strategy primarily revolves around equity securities of companies affiliated with emerging market nations, adhering to a policy that ensures at least 80% of its assets are allocated towards such investments under normal market conditions. This strategic approach positions the fund to potentially benefit from the dynamic growth and unique opportunities present in emerging markets.
The fund invests in equity securities of companies based in or significantly related to emerging market countries. This includes stocks and other equity instruments, which provide investors with ownership stakes in these companies. By focusing on equity securities, the fund aims to leverage the growth potential of emerging markets, targeting gains from price appreciations and dividends.
Investments span across various market sectors and industry groups within emerging markets. This diversification strategy is designed to reduce risk by spreading investments over multiple areas, which may react differently to economic changes. It allows investors to capitalize on growth in different sectors, enhancing the potential for robust portfolio performance.
The fund does not limit its investments to companies of a specific size, integrating both small and large market capitalizations into its portfolio. This approach enables access to the full spectrum of investment opportunities within emerging markets, from agile small-cap companies that offer high growth potential to stable, large-cap companies that provide consistency and strength.