American Century files a mutual-fund wrapper for Avantis international large-cap value

Avantis has been adding separate mutual-fund series for strategies that already trade as ETFs, rather than converting those ETFs into dual-share-class funds, which put ETF and mutual-fund shares on one portfolio. The post-effective amendment American Century ETF Trust filed on Friday, September 4, would extend that design to international large-cap value, the pairing still missing from the Avantis mutual-fund shelf.

A July 8 Pensions & Investments article reported that Avantis skipped the dual-share-class rush; chief investment officer Eduardo Repetto argued that ETF investors are better off in standalone ETFs. Friday's paper continues that pattern. The new series, Avantis International Large Cap Value Fund, expects at the outset to put substantially all of its assets into Avantis International Large Cap Value ETF AAVIV, the active non-U.S. large-cap value portfolio Avantis has run since 2021.

The people this paper is for are not those ETF holders. They are the channels that still buy mutual funds and do not, or cannot, hold AAVIV directly.

What the amendment registers

The paper is a Form 485APOS, a post-effective amendment to an already-effective registration. Effectiveness is proposed for Monday, November 23, under Rule 485(a)(2), with the public offering to begin as soon as practicable after that. No ticker has been assigned. The Institutional Class still appears as XXXXX.

The wrapper lists a 0.25% unified management fee and 0.25% in acquired-fund fees, matching AAVIV. American Century Investment Management would waive the portion of that management fee equal to the management fees of American Century-advised underlying funds, bringing net expenses to 0.25%. The paper says that waiver is expected to remain permanently and cannot be dropped without the board's approval.

The new fund seeks long-term capital appreciation. It would invest primarily in a diverse group of non-U.S. companies across countries, sectors, and industry groups, and it would normally keep at least 80% of assets in large-cap value equities of non-U.S. companies. Large cap, for that test, means a market capitalization at least as large as the smallest company in the MSCI World ex-USA Value Index.

The security-selection language is the Avantis process already used in the ETF: value defined mainly as adjusted book-to-price, profitability defined mainly as adjusted cash from operations to book value, with market capitalization as the baseline weight and tilts from there.

The amendment lists only an Institutional Class for the new series. The other Avantis mutual funds in the same paper have both Institutional and G Class shares. It does not name a listing exchange, because this would not be an ETF, and it does not state a first-trade date.

The missing Avantis mutual-fund sleeve

The same filing restates eight existing Avantis mutual-fund series. Each already sits beside an ETF that follows the same mandate.

The paper does not change AAVIV's fee, 80% test, or listing.

The ETF the wrapper would buy

AAVIV charges 0.25%. Dimensional International Value ETF ADFIV charges 0.27%. iShares MSCI EAFE Value ETF AEFV, which tracks developed-market value names outside the U.S. and Canada, charges 0.31%. JPMorgan International Value ETF AJIVE, an active peer, charges 0.55%.

For the channels that cannot hold the ETF, the amendment would put the same 0.25% international large-cap value book on a mutual-fund ticket. The distance between Friday's filing and that outcome remains a proposed effective date and a placeholder ticker.