AVUS ETF Review - Can This ETF Beat VTI Forever?

AVUS is a relatively new ETF from Avantis that is a single fund solution for the U.S. stock market index investor who also wants some factor exposure. I review it here.

// TIMESTAMPS:

00:00 - Intro
00:10 - Factors and Avantis
00:55 - The Case for AVUS
02:05 - AVUS Performance
02:26 - Factor Loadings
02:52 - Is AVUS a Good Investment?

// SUMMARY:

Avantis, the new kid on the block that shares Dimensional DNA, have shown they're able to provide some of the best factor funds around. AVUS, which launched in late September 2019, is their ETF to broadly capture the U.S. stock market.

AVUS was Morningstar”s “favorite new launch of the year” for 2019. The fund aims to achieve broad index-like exposure similar to that of VTI, Vanguard's offering for the total U.S. stock market, while simultaneously very slightly overweighting stocks with certain characteristics.

Previously, the U.S. stock market ETF investor who also wanted factor tilts was probably using multiple ETFs, such as a combination of a plain low-cost broad market index fund like VTI from Vanguard plus a narrowly targeted small cap value fund like Vanguard's VIOV or Avantis's AVUV.

Achieving greater simplicity in one's portfolio by having fewer holdings to manage can be extremely valuable. AVUS may prove useful for the U.S. investor who wants to set it and forget it with a single fund for U.S. stocks.

To put it simply, zooming out, AVUS doesn't look terribly different from VTI. But remember that was sort of the point in its design, so that's not a knock on Avantis. Again, as an arguably “moderate” factor tilter myself, AVUS looks pretty lackluster to me, but for the staunch Boglehead indexer, AVUS may be a perfect and attractive foray into factors.

Replicate AVUS here: https://optimizedportfolio.com/go/avus-1

Read the blog post here: https://www.optimizedportfolio.com/avus/

#investing #factorinvesting #stockmarket

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