While international investing may make some traders nervous, there is still plenty of value to be found in international equities, especially via an active management.
To start, international equities can provide portfolios with essential diversification from the U.S. market. This can be doubly beneficial for traders who want to hedge some bets away from U.S. interest rate risk. By choosing the right investment strategy, one can access return potential with diversification benefits.
The Avantis All International Markets Equity ETF (AVNM) can help investors seeking access to core international equities. AVNM is an actively manage fund that invests in a wide range of international companies from both developed and emerging markets. However, the fund holds a larger allocation of assets in developed markets than it does in emerging markets.
Per the fund prospectus, AVNM works as a “fund of funds” by investing in other Avantis international equity ETFs. The fund provides many of the benefits normally acquired through indexing, such as diversification, minimal turnover, and exposure transparency. However, AVNM still utilizes current price information to make individual investment calls.
Exposure to Japan
While the fund holds assets tied to a wide variety of countries, the country with the largest weight within AVNM is Japan. This allocation can prove highly beneficial in the long term, given Japan’s ongoing economic resurgence.
A crucial factor behind AVNM’s ability to mitigate risk is the fund’s active management team. Given the complicated economic landscape behind a diversified international equity portfolio, active managers can adaptably shift resources and country allocations. Despite an actively managed ETF often coming with a high cost, AVNM’s net expense ratio is only 0.31%.
With an active management team and well-diversified equity portfolio, AVNM’s investment strategy has paid off so far. Year-to-date, the fund’s NAV is up 7.57% as of May 31st, 2024.
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