This active ETF provides exposure to relatively undervalued value stocks among U.S. large-cap equities. Rather than simply tracking a market-cap-weighted index, it selects securities and determines portfolio weights using both valuation and profitability metrics.

It is suited to long-term investors seeking diversified exposure to U.S. large-cap value stocks while also benefiting from a rules-based active selection approach.

The ETF is actively managed by Avantis Investors.

The ETF strengthens its value exposure by assigning greater weight to stocks within the U.S. large-cap universe that are relatively inexpensive while also posting solid profitability metrics. Like a passive ETF, it provides broad diversification, but daily portfolio monitoring allows valuation changes to be reflected in portfolio weights, setting it apart from passive products.

• Security selection incorporating both value and profitability factors
• A combination of index-like low costs and active oversight

Assets under management (AUM) stand at $22.6B, while the total expense ratio is 0.15% annually.

Its fees are somewhat higher than those of passive value ETFs such as VTV and IVE shown in the table, but it applies value and profitability screening rather than simply replicating an index, making it operationally distinct.

The performance of the value-investing style has alternated between periods of relative strength and weakness versus growth stocks, depending on the market environment. Short-term returns may be volatile as they are influenced by interest rates and sector rotation.

Heightened attention to its low fees and factor-based active management has helped the ETF absorb demand for value stocks, supporting a steady inflow of capital. During periods of market volatility, flows may shift as investor style preferences change.

Its low expense ratio and combination of value and profitability factors are key strengths, but investors should note that active management can result in performance deviations from the benchmark.

The VTV, IVE, and IWD funds shown in the table are passive products tracking U.S. large-cap value stocks. Their simple index-replication approach distinguishes them from this ETF's active screening process. Investors seeking broader small- and mid-cap exposure within the value style may also consider VBR, while those looking to balance their exposure with growth stocks may evaluate SCHG.

These are the key points to review before investing in AVLV. As both a value-oriented and actively managed ETF, investors should assess its costs, style exposure, and management approach in advance.

Weak value-stock performance and performance deviations associated with active management are the primary sources of short-term volatility. Even value stocks can generate short-term losses during market corrections.

The ETF is worth considering for investors seeking factor-based exposure to U.S. large-cap value stocks at a low cost. Those who prefer simple index replication may consider funds in the VTV and IVE family, while those seeking an active selection approach may find this ETF more suitable.