Avantis Emerging Markets Small Cap Equity ETF

Avantis Emerging Markets Small Cap Equity ETF (AVEE), from American Century Investments, owns about 2,900 small companies in emerging markets such as Taiwan, South Korea and India. It is actively managed, not tied to an index. It leans toward cheaper, more profitable firms. Its expense ratio is 0.42% a year, the lowest of the five similar emerging markets small-cap ETFs compared here, where the average is 0.69%.

• Over the year to Oct 27, 2026, AVEE returned +2.8%, 3rd of 5 among similar funds.
• Its worst full calendar year was 2024 (+2.9%); its best was 2025 (+19.8%).
• The deepest fall in its price history was 20.2% (Oct 2, 2024 to Apr 8, 2025), recovered by Jun 9, 2025.

As of Aug 31, 2026, the fund held 2,877 securities; the ten largest made up 4.52% of assets.

• Over the three months to Aug 31, 2026, investors added a net $6.8M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -2.35%, -8.22%, +9.68%.

AVEE, from American Century Investments, is actively managed: it does not copy an index. Its managers use financial data to pick small companies tied to emerging markets, meaning countries outside the developed world. At least 80% of assets go to these stocks under normal conditions. "Small" means no bigger than the largest company in the benchmark MSCI Emerging Markets Small Cap Index, about $9.3 billion as of September 30, 2025.

Each stock's starting weight reflects its market value. The managers then tilt toward smaller, cheaper and more profitable firms. Cheap means a high ratio of book value (assets minus liabilities) to price; profitable means strong operating cash flow relative to book value. Larger, pricier, less profitable stocks are trimmed or left out. That yields 2,877 holdings as of August 31, 2026; the top 10, led by LG Innotek at 0.71%, totaled only 4.52% of assets.

There is no fixed rebalancing date. The managers review holdings continually and trade as stocks drift from the target profile, weighing costs and taxes. Portfolio turnover, the share of holdings replaced over a year, was 3% per the December 29, 2025 prospectus. One drawback: the fund may create and redeem shares for cash rather than securities, which can trigger taxable gains that ETFs swapping securities directly often avoid.

• AVEE charges 0.42% a year, versus an average of 0.69% for the similar funds below (1st of 5, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $43 in the first year and $530 over 10 years (assuming a 5% annual return).

It is a narrow, volatile slice of the market (small emerging markets companies) with a short track record, so it fits better as a small add-on than as a foundation.

AVEE could add something most US-focused portfolios lack: small companies in Taiwan, South Korea, India and China. Its history is short. It launched in November 2023, so it missed the 2008, 2020 and 2022 downturns. Its deepest drop was 20.2%, from October 2, 2024 to April 8, 2025. It regained that ground by June 9, 2025, about two months later. Its weakest calendar year, 2024, still ended up 2.9%, but its worst quarter was a 7.56% loss at the end of 2024. Anyone who had to sell near the April 2025 low would have locked in a loss of about a fifth. The trailing yield was 3.14% as of October 27, 2026, paid quarterly, though dividends from small foreign companies can vary. Costs are low: $43 in the first year on $10,000 under the SEC's standard example. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).