The publication of my article on Avantis prompted a reader to send over an additional piece of research they had delved into.
They drew my attention to a particular aspect of its performance:
Since it was launched, AVUS has slightly outperformed ITOT in terms of total return, with a mere difference of 2.1% over five years; however, it has lagged behind the large-cap benchmark SPDR S&P 500 ETF Trust (SPY) by 4.8%.
The reader remarked, “It seems we need to be patient with this ETF and manage our expectations.”
Initially, I thought AVUS was underperforming considerably.
To get a clearer picture, I checked which benchmark Avantis used for AVUS, discovering it was the Russell 3000 index.
I found myself questioning, “Why on earth did the author at Seeking Alpha choose ITOT or SPY as benchmarks when the Russell 3000 index would have been more appropriate?”
So, let’s look at how AVUS has performed. (it’s highlighted in orange)…
