This is an actively managed ETF that targets the U.S. stock market as a whole but, rather than simply replicating an index, tilts toward academic factors (value and profitability). It holds U.S. companies broadly across all market capitalization ranges.

It suits long-term investors who want diversification across the U.S. market along with systematic, factor-based active management.

It is an ETF run with an active management approach by Avantis Investors.

This is an active strategy that diversifies broadly across a wide range of companies in the entire U.S. market while overweighting companies with strong factors such as value and profitability. It does not replicate an index as is. Instead, the management team adjusts weightings based on its own judgment, while keeping turnover low to hold down costs.

• Factor-based active management instead of index replication
• Low expense ratio for an active ETF

Assets under management (AUM) stand at $14.9B, and the total expense ratio is 0.15% per year.

It differentiates itself from core ETFs that simply replicate an index through its factor tilt, and it manages costs through broad diversification and low turnover.

It moves in line with the broader U.S. market, but its factor tilt can produce trend differences versus the market index. Short-term performance is affected by shifts in the relative strength of value stocks versus growth stocks.

Fund inflows and outflows continue, driven by demand from investors looking to combine a factor strategy with broad core exposure. Interest in active factor ETFs tends to fluctuate with market conditions.

Its strengths are a low expense ratio, broad diversification, and factor-based active management, while tracking differences versus the market index, inherent to active management, can be a drawback.

ITOT and SCHB, shown in the table, are lower-cost, broad core ETFs that track the entire U.S. market exactly as an index does, and IWV is another broad alternative that tracks the Russell 3000. From the same Avantis family, AVUV, which focuses on small caps, and AVDE, which extends exposure to developed markets outside the U.S., are also worth considering. If you want simple index replication, a core ETF is the choice, and if you want a factor tilt, AVUS is an option.

Here are the points to review before investing in AVUS. It provides broad core exposure, but it is best to thoroughly check the characteristics of active factor management, the fee burden, top-holding concentration, and currency exposure before investing.

Active factor management can cause performance to diverge from the broad market index, and relative weakness can appear in periods when the value and profitability factors lag. The Big Tech weighting among the top holdings is also a source of volatility.

This is an active core ETF suited to long-term investors who want to combine a factor tilt with exposure to the broad U.S. market. If you want simple index replication, consider ITOT or SCHB, and if you want factor-based management, AVUS is worth considering.