These are the Three Fastest-Growing NYSE Listed Actively Managed ETFs Of 2023 So Far

Avantis U.S. Small Cap Value ETF (AVUV)

One of the standout stars in the lineup of the fastest-growing actively managed ETFs of 2023 is AVUV, managed by Avantis Investors. This ETF has struck a chord with many investors, satisfying their desire for an attractively priced small-cap value factor ETF. 

With a modest expense ratio of just 0.25%, AVUV has positioned itself as a cost-efficient option in a segment that often faces scrutiny for its fee structure. But the appeal of AVUV doesn't stop at its competitive pricing. Over the last three years, this ETF has outperformed its benchmark, the Russell 2000, a feat many smart beta/factor ETFs have failed to do.

This consistent outperformance has not only garnered attention but has translated into substantial inflows, making AVUV a prominent player in the fastest-growing active ETF category that is beginning to shape up as a challenger to passively managed small-cap value index ETFs like the larger and older Vanguard Small-Cap Value ETF (VBR) and iShares S&P Small-Cap 600 Value ETF (IJS).

Avantis Investors' execution of AVUV serves as a great example of how thoughtful strategy and cost-conscious structuring can resonate with investors. By aligning the ETF with market demands for value, performance, and affordability, they've created a product that not only meets but exceeds investor expectations. This confluence of factors likely explains why AVUV has become a magnet for new investment, and a noteworthy member of the actively managed ETF success stories of 2023.

• AUM: $6.82 billion.
• YTD Inflows: $1.43 billion.

Avantis Emerging Markets Equity ETF (AVEM)

Another ETF that has made a significant splash in 2023 is AVEM, an emerging market ETF focused on the value factor, a niche that currently has a relative lack of competitors, with the few present charging high fees. Whereas other emerging market factor ETFs often carry higher expense ratios, AVEM breaks the mold with an affordable expense ratio of 0.33%.

This attractive pricing strategy is not the only factor driving inflows. Avantis Investors' reputation for factor investing has also played a crucial role. By leveraging its well-known expertise in this area, Avantis has managed to create a product that resonates with a growing segment of investors looking to explore value opportunities in emerging markets without being burdened by excessive costs.

The combination of a unique focus on value in emerging markets, a competitive fee structure, and the strong reputation of Avantis Investors has made AVEM one of the fastest-growing actively managed ETFs in 2023. It highlights the potential of specialized ETFs to carve out a niche in a crowded market, especially when managed with an understanding of investor needs and a commitment to cost efficiency. 

• AUM: $3.85 billion.
• YTD Inflows: $1.07 billion.

Global X Emerging Markets Great Consumer ETF (EMC)

The third ETF that has shown remarkable growth in 2023 is EMC. This growth can be attributed to Global X's strategic decision to forgo the usual broad market index strategy that many emerging market ETFs adhere to. Recognizing the competitive and saturated nature of this space, Global X opted to play to their strengths by creating thematic ETFs that resonate with retail investors.

In the case of EMC, Global X focused on the long-term trends coming from the increasing purchasing power of a rising middle class in emerging economies. By tapping into the long-term tailwinds driven by a more affluent and consumer-oriented population in these regions, this ETF has potentially positioned itself to capitalize on a transformative socio-economic shift.

The inflows to EMCC this year underscore the popularity of thematic investing and illustrate how a clear, targeted, and attractively marketed investment thesis can eventually be successful in drawing retail investors and overcoming a slow start (EMC launched in September 2010) and higher expense ratios (EMC charges 0.75%). 

• AUM: $355 million. 
• YTD Inflows: $323 million. 

Data as of August 2023.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.