AVES vs MFEM

AVESAAvantis Emerging Markets Value ETF

MFEMCPIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF

In short

AVES Avantis starts with the emerging markets universe and tilts it: cheap valuations, profitable companies, roughly 1,800 names from megacaps down to small caps. Broad EM exposure with a deliberate value-and-quality slant, priced under the typical multifactor rival.

MFEM Most multifactor emerging-market funds pick their factor weights and leave them. PIMCO's version rotates, leaning toward factors that look cheap against their own history and are turning up. Contrarian machinery from Research Affiliates, roughly 800 stocks deep.

Stated mandate

AVES The fund seeks long-term capital appreciation.

MFEM The Fund seeks to track the RAFI Dynamic Multi-Factor Emerging Markets Index. It normally invests at least 80% of assets in the index’s component securities and is designed to provide long-only emerging-market equity exposure across multiple factors.

Why people hold it

• AVES Charges 0.36% a year, below the 0.48% median for emerging markets multifactor funds. EM is where fee gaps usually run widest.
• Two screens, not one: it tilts toward cheap valuations and toward high profitability, so the deep-value bucket gets a quality filter on the way in.avantisinvestors.com
• Roughly 1,800 holdings across the MSCI Emerging Markets IMI Value opportunity set, meaning small caps ride along rather than getting screened out.
• Portfolio build sits in the top quartile of its EM multifactor peer group in our review, and the fund is a multi-billion-dollar, regularly traded name.

• MFEM The index doesn't hold factor weights still. It rebalances toward factors with attractive relative valuations that are also showing a momentum upswing.rafi.com
• Four factors in one long-only emerging-market wrapper: value, momentum, quality and low volatility. No single-factor bet to time yourself.
• Roughly 800 holdings, so no single name carries the portfolio. Distributions come quarterly.
• A PIMCO fund running a Research Affiliates index, live since 2017. This is not a strategy that showed up last quarter.researchaffiliates.com

Worth knowing

• AVES Value in emerging markets means leaning into cheaper, cyclical corners of the market, plus currency swings. A bumpier ride than a plain broad EM index.
• Cost is not the floor here: peer EMGF runs a multifactor EM portfolio for 0.26%, ten basis points less.
• Launched in 2021, so its live record is shorter than the older EM factor funds it lines up against.

• MFEM At 0.50% it prices above the typical multifactor EM fund and above cheaper peers like EMGF (0.26%) and AVES (0.36%). Overall it lands in the lower half of its peer group.
• Thinly traded next to its category, which can mean wider spreads. Limit orders carry more weight here than with the group's heavyweights.
• Rotating factor weights is an active call baked into the index. The path can look quite different from plain cap-weighted emerging markets, in both directions.rafi.com

Full AVES profile⁠

Full MFEM profile⁠