AVUS Outpaced VTI by 16 Points Over 5 Years. Is It the Better Core Holding?

Core Insights - Avantis U.S. Equity ETF (AVUS) employs a strategy that combines broad market exposure with a tilt towards undervalued and more profitable stocks, differentiating it from traditional index funds [2][4] - Since its launch in September 2019, AVUS has grown to $11.3 billion in assets, indicating its acceptance as a long-term investment rather than a trading tool [3] - The fund's investment approach is based on academic research focusing on value and profitability factors, with a low portfolio turnover of 2%, suggesting a patient investment strategy [4] Performance Metrics - Over the past year, AVUS has returned 19.3% and 73% over five years, outperforming Vanguard Total Stock Market ETF (VTI) which returned 14.3% and 57% respectively [6] - The expense ratio for AVUS is 0.15%, making it competitive with standard index funds while providing a unique investment strategy [5] - AVUS's portfolio includes approximately 13% in major tech stocks like Microsoft (MSFT), Nvidia (NVDA), and Apple (AAPL), despite its focus on value [6] Market Behavior - The fund's strategy of tilting away from mega-cap technology stocks has provided an advantage during market corrections, as evidenced by AVUS's 0.6% increase in 2026 while VTI fell by 3% [6] - The approach carries timing risks, particularly in growth-heavy market cycles, highlighting the need for careful market assessment [6]