AVMA provides a one-stop moderate risk portfolio combining roughly 60% global stocks and 40% bonds, but with Avantis's factor-based approach that tilts toward value and profitability metrics rather than market-cap weighting. Think of it as a smarter 60/40 portfolio that systematically overweights cheaper, more profitable companies.
How It Works
The fund allocates across multiple underlying Avantis ETFs, maintaining approximately 60% equity exposure split between US and international markets, with the remaining 40% in investment-grade bonds. Unlike typical target-date funds that simply buy the market, AVMA's underlying holdings use quantitative screens to overweight stocks with lower valuations and higher profitability. The fund rebalances quarterly to maintain target weights while harvesting the factor premiums Avantis targets across their lineup.
Key Features
- Factor tilts within traditional 60/40 framework — you get value and profitability exposure without abandoning diversification
- Single-ticker solution with 0.15% expense ratio beats most robo-advisors charging 0.25% for similar allocation
- Quarterly rebalancing captures volatility between stocks and bonds while maintaining factor exposures
Risks
- Factor tilts can underperform for years — value strategies lagged growth by 30%+ from 2017-2020
- 40% bond allocation means missing upside in strong equity markets — you'll lag pure stock portfolios by design
- New fund with limited track record launched mid-2023, so actual factor premium capture remains theoretical
Who Should Own This
Perfect for investors who buy into factor investing but don't want to manage multiple positions or rebalance themselves. If you're 10+ years from retirement and believe markets misprice value and quality, this beats target-date funds that blindly buy the whole market. Not for those needing income today given the moderate 2.59% yield or anyone who thinks growth will keep dominating value.