"The biggest macro factor to watch is the global commodity cycle, particularly industrial metals and energy. AVDV's portfolio leans heavily into materials and energy companies across Australia, Canada, and Japan. Gold miners like Perseus Mining and B2Gold appear among the top holdings, alongside coal producer Whitehaven Coal and Canadian energy names like Whitecap Resources. When commodity prices rise, these small-cap value stocks leverage that momentum aggressively."
"Investors should monitor monthly commodity price indexes published by the World Bank and quarterly earnings reports from major mining and energy producers. These releases signal whether demand is holding up or cracking. A sustained pullback in industrial activity, particularly in China or Europe, would pressure the materials-heavy companies that drove much of AVDV's recent performance. The fund's strong returns weren't just about picking good stocks but riding a favorable commodity environment."
AVDV is a $14.6 billion ETF with a 0.36% expense ratio that holds hundreds of international small-cap value stocks and has recently outperformed major benchmarks. The portfolio tilts heavily toward materials and energy companies in Australia, Canada, and Japan, including gold miners, coal producers, and Canadian energy firms, making returns sensitive to the global commodity cycle. Rising industrial metals and energy prices amplify gains for these small-cap value names, while declines would disproportionately hurt performance. Investors should monitor World Bank monthly commodity price indexes and mining and energy earnings, and consider concentration risk given clustered cyclicality and low turnover.
Read at 24/7 Wall St.
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