A $11 Billion ETF Quietly Outperforms the Total Market by Favoring Profitable Stocks

"AVUS occupies a middle ground sometimes called "systematic active" or enhanced indexing. Avantis, a subsidiary of American Century, screens the broad U.S. market and overweights companies trading at lower valuations relative to their fundamentals while emphasizing firms with strong current profitability. The result is a diversified, 500+ holding portfolio that resembles the total market but with deliberate factor tilts built in."

"The return engine here is factor exposure, not market-cap momentum. By systematically favoring profitable, reasonably priced companies, AVUS aims to capture a return premium over a pure cap-weighted index across long time horizons. At 0.15% in annual expenses and just 1% portfolio turnover, the strategy is designed to be tax-efficient and low-cost, which matters when compounding over decades."

"Over the past year, AVUS returned 19.88% compared to 15.22% for Vanguard Total Stock Market ETF - a gap driven largely by the value and profitability tilts paying off as rate-sensitive investors rotated toward cheaper, cash-generative businesses. Over five years, AVUS has compounded at 87.59% versus 68.86% for VTI, suggesting the factor premium has been durable rather than episodic."

AVUS is a systematic active ETF that screens the U.S. market to overweight companies with lower valuations relative to fundamentals and strong profitability. Unlike traditional cap-weighted ETFs that concentrate in the largest companies regardless of valuation, AVUS maintains a diversified 500+ holding portfolio with deliberate factor tilts. The strategy charges 0.15% annually with minimal 1% turnover, prioritizing tax efficiency and low costs. Performance data shows AVUS has outpaced the Vanguard Total Stock Market ETF significantly, returning 19.88% versus 15.22% over one year and 87.59% versus 68.86% over five years, demonstrating that the value and profitability premium has been consistent across different market cycles.

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