How We Manage Money
Our approach combines the latest financial science with common sense investing principles and cost-effective implementation.
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We believe market prices represent an unbiased view of a company’s prospects and risks and that paying lower prices for our share of future cash flows has the potential to produce outperformance versus a benchmark.
Financial Science Lays the Foundation
Our investment approach is based on an academically-supported, market-tested framework that aims to identify securities with higher expected returns* based on their current market prices and other company financial information.
Process Designed for Consistency
As part of our portfolio management and trading processes, we analyze whether the benefits of a trade overcome its associated costs and risks. We seek to methodically harness return premiums while managing implementation costs and aiming to mitigate portfolio risks in an effort to generate enhanced returns over time.
Enable Investors to Build Customized Asset Allocations
All Avantis Investors strategies will use the same academically sound risk/return framework uniquely designed for Avantis Investors. We use our understanding of investors’ needs to deliver transparent investment strategies that work well inside a broader asset allocation.
Cost Conscious
Scalable, efficient portfolio construction and engineering allows for broadly diversified solutions with low rebalancing costs, capital gains and fees. We expect to pass these savings on to our investors through lower management fees.
*Expected Returns: Valuation theory shows that the expected return of a stock is a function of its current price, its book equity (assets minus liabilities) and expected future profits, and that the expected return of a bond is a function of its current yield and its expected capital appreciation (depreciation). We use information in current market prices and company financials to identify differences in expected returns among securities, seeking to overweight securities with higher expected returns based on this current market information. Actual returns may be different than expected returns, and there is no guarantee that the strategy will be successful.
