AVNV targets deeply discounted stocks across developed and emerging markets, betting that companies trading below their fundamental worth will eventually see price appreciation. This fund exists for investors who believe international markets offer better value opportunities than the US.
How It Works
The fund uses a proprietary multifactor approach emphasizing low price-to-book ratios while screening for profitability metrics to avoid value traps. Unlike simple value indexes, AVNV weights positions based on both value characteristics and market cap, allowing concentrated bets on the cheapest profitable companies. The strategy rebalances quarterly to capture mean reversion while maintaining reasonable turnover.
Key Features
- Combines developed and emerging market value in one fund, avoiding the need for separate allocations
- Profitability screens help dodge perpetually cheap stocks that destroy capital
- 3.21% yield reflects the mature, cash-generative companies that dominate value portfolios
Risks
- Value stocks can underperform growth for years — international value has lagged since 2010
- Emerging market exposure (typically 20-30%) adds currency and political risk that can erase gains overnight
- Concentrated in financials and energy sectors that suffer badly in recessions
Who Should Own This
Best suited for patient investors with 7+ year horizons who want to diversify away from expensive US growth stocks. Works well as a 10-20% portfolio position for those comfortable with extended periods of underperformance while waiting for the value premium to materialize. Not for anyone who checks performance monthly.