This is a responsible-investing ETF that diversifies across large-, mid- and small-cap stocks throughout emerging markets, while the management team excludes companies that raise significant concerns based on several ESG indicators. It uses market prices and corporate financial information to overweight stocks with higher expected returns.

It suits long-term investors who want diversified emerging market exposure with ESG criteria built into an actively managed approach.

It is an actively managed ETF run by American Century (Avantis).

The fund holds a broad range of stocks across many emerging market countries and sectors, while the management team filters out companies of concern using ESG indicators. Rather than simply replicating an index, it takes a systematic active approach, using current market prices and information on corporate profitability and valuations to raise the weights of stocks judged to have higher expected returns.

• A combination of ESG screening and active management
• Weight adjustments based on valuations

Assets under management (AUM) stand at $215.4M, and the expense ratio is 0.33% per year.

Compared with peer emerging market ETFs, the addition of ESG screening and manager discretion is what sets it apart.

The fund has been influenced by the overall direction of emerging market equities, dollar strength or weakness, and shifts in risk appetite. Because of ESG screening and active weight adjustments, it may follow a different trend from peer index-based ETFs, and recent trends can also differ depending on management decisions.

Fund flows vary with demand for emerging markets and for the responsible-investing theme. When risk appetite rises, money tends to flow into emerging markets broadly, and when investors turn risk averse, money tends to move toward developed market assets.

ESG screening and diversification are its strengths, while the volatility inherent in emerging markets and currency exposure are the main risks.

FNDE, PXH and XSOE in the table are comparison candidates in the same emerging market category, each using a different approach such as fundamental weighting or excluding state-owned enterprises. Direct alternatives from the same fund family include AVEM, the Avantis Emerging Markets Equity ETF, which invests broadly without ESG screening, and AVES, which tilts more toward value stocks, so both can be considered alongside it.

Here are the points to review before investing in AVSE. Since it is an actively managed emerging market ETF, it is wise to check the expense ratio, management strategy and currency exposure in advance and consider whether they fit your own risk tolerance.

The high volatility inherent in emerging markets, along with currency and policy risk, is the main driver of short-term volatility. You should also consider that, because it is actively managed, its performance can diverge from that of peer index-based ETFs.

It is a suitable choice for long-term investors who want to diversify across emerging markets while reflecting ESG criteria. If you want broad exposure without ESG constraints, you can also compare AVEM, and if you want a higher weighting in value stocks, AVES.