AVLC vs HEGD

AVLCAAvantis U.S. Large Cap Equity ETF

HEGDCSwan Hedged Equity US Large Cap ETF

In short

AVLC Active management with index-fund manners: roughly 900 U.S. large caps, with the dial turned toward cheaper, more profitable companies. Avantis charges 0.15% a year to do it.

HEGD Always invested, always hedged: HEGD owns S&P 500 exposure with long-dated puts sitting under it at all times, funded partly by selling shorter options. Standing coverage, not a seasonal reset, for 0.87% a year.

Stated mandate

AVLC The fund seeks long-term capital appreciation. It invests broadly in U.S. large-capitalization companies while using active decisions to overweight lower valuations and higher profitability.

HEGD The Fund seeks long-term capital appreciation while reducing overall market risk through a hedged U.S. large-cap equity strategy.

Why people hold it

• AVLC 0.15% a year against a 0.65% median for active U.S. equity funds. That is passive-style pricing on an actively run book.
• Holds about 900 names against the Russell 1000, so the value and profitability tilts sit on top of broad market exposure instead of a concentrated bet.avantisinvestors.com
• One of the stronger builds in the active U.S. equity group, priced in the same neighborhood as the Dimensional core funds (DFAU, DFAC) it competes with.
• A multi-billion-dollar fund that trades steadily, so spreads and liquidity are rarely the sticking point. Distributions are paid quarterly.

• HEGD No outcome period to track. The put hedge stays on and gets rolled by the managers, so there is no annual reset date or day-one entry math like buffer funds ask of you.swanglobalinvestments.comswanglobalinvestments.com 2
• The dampening shows up in the data: one of the lower-risk profiles among actively managed US large-cap ETFs, which is the whole point of paying for a hedge.
• Not a 2020 invention. Randy Swan has run this defined-risk approach since 1997; the ETF wrapper arrived in 2020 with the equity sleeve in plain S&P 500 index ETFs.sec.govswanglobalinvestments.com

Worth knowing

• AVLC Launched in 2023. The tilt philosophy is well worn at Avantis, but this fund's own live record is still short.
• Active, not index-tracking. The Russell 1000 is a reference point, not a leash, so holdings and weights can drift from it.
• Leaning toward cheaper, higher-profitability companies means stretches where it moves differently from the plain cap-weighted market, in either direction.avantisinvestors.com

• HEGD 0.87% a year, no waiver trimming it, sits above the typical active US large-cap fee. Hedged-equity peer JHDG runs 0.49% net of a waiver through July 31, 2027.
• Hedges cost money. Swan's own shareholder reports are blunt that the fund is unlikely to capture a full up market, since the puts drag when stocks climb.sec.govsec.gov 2
• Income is incidental: distributions are annual. And you own a short list of ETFs and options rather than hundreds of individual stocks.

Full AVLC profile⁠

Full HEGD profile⁠