AVUV is a relatively new targeted factor ETF from Avantis for U.S. small cap value stocks. I review it here.

// TIMESTAMPS:

00:00 Intro
00:06 Primer on Factors
01:19 The Case for AVUV and Avantis
02:12 AVUV Performance
02:36 AVUV Factor Loadings
02:55 Conclusion Is AVUV a Good Investment?

// SUMMARY:

By sheer assets, VBR from Vanguard seems to be the most popular choice for U.S. small cap value stocks. If you're reading this post, there's a pretty good chance you already own it.

Unfortunately, VBR is neither very small nor very valuey. That is, it basically tilts midcap and has smaller factor loadings compared to other options in the space, of which there are many now. I'll go ahead and give away the punchline. I compared a handful of the most popular small cap value funds in a separate post here and crowned AVUV the winner.

Dimensional Fund Advisors (DFA for short) have long been the gold standard for factor funds. A few years back, some folks from Dimensional left to create Avantis, so it shares DFA pedigree. Avantis have quickly boasted their competency as a fund providers in creating some of the best factor funds around.

Enter AVUV, their offering for ultratargeted factor exposure in U.S. small cap value stocks.

I think AVUV is a fine choice for those wanting superior factor tilts with U.S. small cap value stocks, even for Bogleheads. To offer some social proof, savvy investors much smarter than myself within the Rational Reminder community (the forum for the eponymous podcast from Ben Felix and Cameron Passmore of PWL Capital) like this fund a lot, and it's even part of their model portfolio.

That said, I'm of the mind that one should always understand and be comfortable with what they're buying to hold for the long term. AVUV is arguably for the more advanced, diehard factor investor who can stay the course without feeling unease or tracking error regret, not only from comparing AVUV to its indexed competitors, but also from potentially seeing the small cap value segment as a whole underperform for extended periods.

Assess whether or not you want to factor tilt at all, and if so, whether or not you want to use a young, pricier, ultratargeted fund to do so. I can't answer that for you.

Read the blog post here: https://www.optimizedportfolio.com/avuv/'>https://www.optimizedportfolio.com/avuv/

#smallcapvalue #factorinvesting #etfs

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