Pros Don’t Want You to Know About This ETF

[View in browser]( [The Spill Logo] Proprietary Data Insights Financial Pros’ Top Small Cap ETF Searches in the Last Month Rank Ticker Name Searches #1 [IWM]( iShares Russell 2000 ETF 79 #2 [IJR]( iShares Core S&P Small-Cap ETF 19 #3 [CALF]( Pacer US Small Cap Cash Cows 100 ETF 13 #4 [AVUV]( Avantis U.S. Small Cap Value ETF 9 #5 [FNDA]( Schwab Fundamental U.S. Small Company Index ETF 8 #ad [Exclusive Report of Q3’s Most Popular Stocks]( Brought to you by [Stansberry Research]( [FedNow’s Hidden Agenda]( [Stansberry Research - FedNow’s Hidden Agenda]( You may have heard about "FedNow" - the Federal Reserve's flagship new payment system, launched earlier this year. At least 41 major banks are already using it. As is the US Treasury department that deals with tax rebates and social security payments. But what you may not realize is... It won't be long before this new technology makes the jump from being "behind the scenes"... to becoming integral to life for you and millions of Americans. Look at what's happening in the Federal Reserve, on Wall Street and in Silicon Valley and this becomes obvious. One FedNow Partner runs "point of sale" technology, the card processing terminals you tap your card against at the grocery store. Another is a market leader in mobile payments - the technology that allows you to make payments from your smartphone. In short, the most powerful players on Wall Street and Silicon Valley are getting ready to finish what FedNow started - and push this technology out to the consumer in a nationwide "reset" of the financial system. In the process, they'll create an opportunity for you to ride this wave of rapid adoption as far as it'll go on 2024. To take advantage you need to only make three very simple moves today. [Click right here and I'll explain everything](. The Best Small Cap ETF No One Talks About Normally, we aren’t fans of small or mid-cap ETFs. These ETFs unnecessarily cut out stocks that grow too big for the index, leaving you with the worst relative performers. But our TrackStar data highlighted an unusual ETF that financial pros kept under the radar. It’s a small-cap ETF we’d never heard of. Yet, its 3-year total return clocked in at a whopping 50.3% compared to the Russell 2000’s -2.4% So, what is the name of this magical wonder? Key Facts About Avantis U.S. Small Cap Value ETF (AVUV) - Net assets: $8.9 billion - 12-month trailing yield: 1.7% - Inception: Sept. 24, 2019 - Expense ratio: 0.25% - Number of holdings: 1,000 The surprising performance of this relatively new ETF caught our attention. But when we saw it had a diverse 1,000 stock holding, we figured there was probably an edge here. The AVUV ETF invests in U.S. small-cap companies trading at low valuations with higher profitability. Although it’s a market-cap-weighted index, no company accounts for more than 1.06% of the total portfolio. [Top holdings] [Source: Avantis]( What’s fascinating is that the AVUV ETF strays markedly from the benchmark Russell 2000 Value Index as shown below. [Characteristics] [Source: Avantis]( Why is that? Because AVUV takes an active management approach instead of a passive one. This is rather surprising, given the expense ratio is only 0.25%. However, it explains the difference between the ETF and its benchmark. Performance Equally as important, the active management approach has allowed AVUV to deliver returns far above the passive index. You can see below how the benchmark’s 3-year average performance is less than half that of AVUV. [Performance] [Source: Avantis]( Competition Given the stunning performance, we wanted to compare the results to other small-cap ETFs to see how far above the rest it landed. - iShares Russell 2000 ETF (IWM): A passive ETF that follows the Russell 2000 index as closely as possible. - iShares Core S&P Small-Cap ETF (IJR): Similar to the IWM, the IJR tracks the S&P 600 small cap index. However, this fund focuses on keep expenses as low as possible. - Pacer US Small Cap Cash Cows 100 ETF (CALF): The Pacer small cap cash cow fund focuses on small caps that produce high free-cash-flow yields (the cash generated after taxes and CAPEX but before dividends). - Schwab Fundamental U.S. Small Company Index ETF (FNDA): FNDA is similar to the IWM, but tracks the Russell RAFI US Small company index, which uses a fundamentally weighted approach instead of a market-cap weighted approach like the Russell 2000. [Net assets] Clearly, a passive, market-cap-weighted approach underperforms other strategies. The ETFs that focus on fundamentals in some way see much higher returns. [Stay Ahead, With a Daily Dose of Investing Insights]( Learn about the investing world’s best-kept secrets through insights from smart investors. Subscribe to The Juice newsletter for FREE to gain a clear understanding of the investment world to make informed money decisions. [Subscribe now.]( Our Opinion 9/10 While we typically wouldn’t recommend an actively managed fund, the low expense ratio and fantastic returns make the AVUV ETF quite compelling. At minimum, if you’re looking to invest in a small-cap index, our data suggests you select one that focuses on fundamentals rather than market-cap. 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