AVGE is a new ETF from Avantis that is a single fund solution for the global stock market investor who also wants to factor tilt. Let’s review it.
// SUMMARY:
Previously, the global equities investor who also wanted factor tilts had to use multiple ETFs. This usually looked like VT, the “plain” global stock market ETF from Vanguard, combined with one or several small cap value ETFs (e.g. VIOV, AVUV, etc.), or some combination of broad market funds from Avantis themselves such as AVUS and AVDE. Simplicity in one’s portfolio can be extremely valuable and its psychological benefits are often overlooked in my opinion. In that sense, AVGE may prove useful for the investor who wants to set it and forget it with a single fund for stocks.
AVGE is a “fund of funds” – the first from Avantis – that provides global diversification in equities, the low turnover of indexing, and Avantis’s competency in factor investing, all for a relatively low fee of 0.23%. U.S. investors will also probably appreciate the purposeful, inherent home country bias. Specifically, at the time of writing, AVGE’s components look like this:
AVUS – Avantis US Equity ETF – 45%
AVLV – Avantis US Large Cap Value ETF – 15%
AVDE – Avantis International Equity ETF – 10%
AVEM – Avantis Emerging Markets Equity ETF – 6%
AVUV – Avantis U.S. Small Cap Value ETF – 5%
AVSC – Avantis US Small Cap Equity ETF – 5%
AVIV – Avantis International Large Cap Value ETF – 5%
AVES – Avantis Emerging Markets Value ETF – 4%
AVRE – Avantis Real Estate ETF – 3%
AVDV – Avantis International Small Cap Value ETF – 2%
I’ll be curious to see how AVGE’s long-term performance compares to the stalwart VT from Vanguard, which is the default recommendation from many Bogleheads. Interestingly, because it’s just a fund of funds, AVGE investors should get foreign tax credits on its underlying international funds, while VT is not eligible for one. For the record, note that I’m not suggesting that VT and AVGE are similar products; they’re not. But for VT investors wanting to make the switch, now in late 2022 may be a great time to harvest any losses from the recent bear market and pull the trigger.
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#investing #stockmarket #etfs
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Disclaimer: This is not financial advice, investing advice, or tax advice. The information presented is for informational, educational, and entertainment purposes only. Investment products discussed are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here: [ Ссылка ]
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