The fund uses the MSCI World ex USA Value Index as its benchmark, but selects securities through Avantis's own proprietary quantitative model. It spreads its investments across more than 600 undervalued, high-quality large-cap stocks in developed markets such as Japan, the United Kingdom and France.

It suits investors who want to uncover undervalued, high-quality value stocks in developed markets outside the U.S. and pursue long-term excess returns.

This is an actively managed ETF launched in 2021 by Avantis Investors.

Rather than following the market's market-cap weighting approach, the fund emphasizes company fundamentals. Among stocks with low share prices, it raises the weight of companies with proven profitability, a strategy designed to reduce the risk of falling into so-called value traps and to maximize long-term returns.

• A factor investing strategy that combines value and profitability
• Fees markedly lower than those of traditional active funds

Assets under management (AUM) stand at $2.1B, and the expense ratio is 0.25% per year.

Although classified as active, the fund follows rules based on verified data rather than subjective human judgment, so its management tends to be highly transparent and consistent.

Amid shifting global interest rate conditions and renewed attention on the value sector, the fund has delivered stable results, with a performance profile centered on high-quality stocks that also pay dividends.

As preference grows for low-cost, high-efficiency active strategies, inflows have been accelerating, and the fund is establishing itself as a core holding in international equity portfolios.

The fund's refined approach to high-quality value stocks is a strength, but investors should account for the regional concentration risk that comes with excluding the U.S. market.

DFIV, shown in the table, is a major competing product that uses a similar factor strategy, while DFEV and AVES each specialize in emerging-market value stocks and carry higher volatility. SFGV, meanwhile, stands out by offering global value stock exposure. If you want basic developed-market value exposure, you can consider EFV or IVLU as alternatives, and SCHF is also worth reviewing if you want to invest across the broader developed-market universe.

Investing in high-quality international value stocks outside the U.S. is a key element of overall portfolio diversification, but before investing it is advisable to go through the following items one by one with care.

The value sector is heavily influenced by the economic cycle, so volatility can rise during a downturn, and for products that are not currency hedged, exchange rate movements can become a variable in returns.

It is an excellent alternative for savvy investors who want to diversify into high-quality developed-market value stocks at low cost. It can serve as a strategic asset that lowers portfolio volatility while pursuing income and growth at the same time.