We recently published a list of Deep Value Stocks ETFs: Top 10 Picks. In this article, we are going to take a look at where Avantis US Small Cap Value ETF (NYSE:AVUV) stands against other deep value ETFs to invest in.
This year, growth stocks are largely overvalued, trading at massive premiums compared to the riotous tech bubble of 2021. This is why Morningstar suggests that investors should underweight growth stocks in their portfolios and focus on value stocks instead. As of March 24, 2025, the Morningstar US Market Index saw the highest losses in artificial intelligence stocks, while undervalued stocks gained. Value stocks are trading at an impressive 13% discount to fair value. Thus, Morningstar advises investors to pick up small-cap stocks, which are trading at an 18% discount to fair value, compared to large and mid-cap equities, which trade at the same discount as the broader market.
William C. Nygren, partner, portfolio manager, and chief investment officer at Harris Associates, believes that it is an attractive time to be a value investor in this day and age because of the large spread in valuations between a few tech giants that drive the broader market and everything else. It is a golden time for value investors because the market is so concentrated, which means that cheap stocks are spread all across the other industries, allowing a unique opportunity to put together an investment portfolio comprising low P/E stocks. According to Nygren, it’s not just bank and oil stocks that look cheap right now. Consumer durables, healthcare, and media companies are also attractively valued. Since a value investor focuses on buying stocks that the market isn’t favoring at the moment, they get a much lower price. A value investor has to brave the odds, step in when others waver, and patiently wait for the market to reprice so their portfolio can thrive.
Similarly, veteran value investor Joel Greenblatt of Gotham Asset Management acknowledges that while value stocks have underperformed compared to their growth counterparts over the last two decades, investors who keenly observe and play the market can certainly prevail and outperform the broader market. Greenblatt’s Gotham Asset Management has returned a positive spread for the last three years, and the value investor noted that for a couple of mega stocks to consistently outperform the broader market is rather “abnormal”, possibly hinting that the market will reset its course.
An engineer examining a high-tech tank and freight car, showcasing the company’s innovation in railcars.
Our Methodology
We curated our list of the best deep value stocks ETFs by choosing consensus picks from multiple credible websites. We have mentioned the 5-year share price performance of each ETF as of April 6, 2025, ranking the list in ascending order of the share price performance. Additionally, we analyzed the top holdings of these ETFs to give investors deeper insights. Hedge fund sentiment from Insider Monkey’s Q4 2024 database is also included.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Avantis US Small Cap Value ETF (NYSE:AVUV)
5-Year Share Price Performance as of April 6: 123.56%
Avantis US Small Cap Value ETF (NYSE:AVUV) tracks the price and yield performance of the Russell 2000 Value Index, which offers access to small-cap value stocks with stable financial profiles. As of February 28 this year, AVUV’s portfolio consists of 772 holdings. The fund’s net assets came in at over $13 billion as of April 4, 2025, and it had 168,440,000 outstanding shares. AVUV was launched on September 25, 2019. Avantis US Small Cap Value ETF (NYSE:AVUV)’s expense ratio is 0.25%.
GATX Corporation (NYSE:GATX) is the biggest holding of Avantis US Small Cap Value ETF (NYSE:AVUV). It is a Chicago-based railcar leasing company that has three business segments – Rail North America, Rail International, and Engine Leasing. On January 31, 2025, GATX declared a quarterly dividend of $0.61 per share, which was paid on March 31. The company’s dividend payments have been constant since 1919, and the current payout reflects a 5.2% boost compared to last year’s dividend. It is one of the best deep value stocks to watch.
According to Insider Monkey’s fourth quarter database, 14 hedge funds were bullish on GATX Corporation (NYSE:GATX), compared to 16 funds in the previous quarter. Mario Gabelli’s GAMCO Investors was the largest stakeholder of the company, with 1.32 million shares worth $204.7 million.
Overall, AVUV ranks 2nd among the Deep Value Stocks ETFs: Top 10 Picks. While we acknowledge the potential of deep value ETFs, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AVUV but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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