Core Insights - The John Hancock Dimensional Mid Cap Index targets U.S. operating companies ranked from the 200th to the 951st largest by market cap at reconstitution [1] - The index employs a systematic weighting methodology that favors smaller companies, lower relative price (typically lower P/B), and higher profitability [1] - A single-issuer cap of 4% is enforced at each reconstitution, with the index reconstituting and rebalancing semiannually [1] Portfolio Construction Methodology - The index is drawn from a free-float-adjusted universe of NYSE, NYSE American, and NASDAQ Global Market listings [1] - Constituents are weighted by free-float market cap, with adjustments applied sector-by-sector [1] - Real Estate Investment Trusts (REITs) are treated separately and generally receive reduced weights [1]

Core Insights - The Avantis International Equity ETF (AVDE) achieved a remarkable 39% return in 2025, significantly outperforming both the S&P 500, which gained 18%, and Bitcoin, which saw a nearly 10% decline [2][3][8] Performance Comparison - AVDE's performance highlighted a fundamental shift in international markets, with the iShares MSCI EAFE ETF gaining 32%, indicating that AVDE's active management strategy added approximately 7 percentage points of alpha over passive international exposure [3] Drivers of Performance - European economic stabilization and higher interest rates created favorable conditions for financial stocks, with AVDE's portfolio heavily invested in European banks such as HSBC, UBS, Barclays, and Deutsche Bank, contributing to the fund's success as the STOXX Europe 600 Banks Index surged 65% [4] - Increased defense spending due to geopolitical tensions benefited European defense contractors like Rheinmetall, Safran, and Rolls-Royce, with the European defense sector climbing nearly 60% in 2025, further enhancing AVDE's performance [5] - Currency movements played a significant role, as the weakening of the dollar against the euro and pound resulted in translation gains for U.S. investors holding international stocks, amplifying returns [6] Fund Characteristics - AVDE employs an active management strategy with factor tilts towards value, profitability, and smaller companies, leading to an overweight in financials and industrials while underweighting mega-cap tech [7] - The fund maintains extreme diversification with over 1,000 positions, ensuring no single stock exceeds 1% of the portfolio, which mitigates concentration risk [7] - AVDE charges a low expense ratio of 0.23%, making it an attractive option for investors [8]