Emerging Markets ETF AVEM Adds Over $5 Billion YTD

Core Insights - Foreign equities investing has gained traction in 2025, with many investors shifting from underweight to neutral positions in ex-U.S. equities due to various market factors [1] - The Avantis Emerging Markets Equity ETF (AVEM) has seen significant inflows, totaling $5.2 billion year-to-date, positioning it among the top five emerging markets ETFs by assets under management (AUM) [2][3] Investment Strategy - AVEM combines indexing benefits such as diversification and transparency with active management strengths, allowing it to adapt to new market information [3] - The ETF focuses on small-cap firms with strong profits and low valuations while underweighting large-cap firms that exhibit lower profitability and higher price-to-book ratios [4] Performance Metrics - AVEM has delivered a year-to-date return of 31.9%, outperforming its category average, and has also returned 30% over the past year [5] - The ETF's strong performance is complemented by significant inflows, indicating investor confidence in its strategy [5] Market Outlook - The monetary situation in the U.S. compared to emerging markets is crucial, as many emerging economies have lower inflation and are ahead in their rate cycles, potentially making AVEM an attractive option heading into 2026 [6]