This ETF strategy may help investors skirt market concentration risk

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A top exchange-traded fund provider is screening diversified value stocks for long-term gains.

Avantis Investors chief investment strategist Phil McInnis suggests taking a more diversified approach than simply looking at index funds such as the. He thinks his firm's exchange-traded fund strategy can provide better returns in the long run, emphasizing companies with low valuations and strong balance sheets." this week."So we are kind of making a lot of smaller bets on these lower valuation, better profitability paying off through time.

This couple lives in a vintage 940-square-foot trailer by the beach for $5,100 a month: It's ‘the California dream'"Starting at the company level and the sectors being a byproduct, we do have caps with the sectors to make sure that those bets aren't too big, that we aren't too concentrated in an individual sector," McInnis added.

Avantis' Large Cap Value ETF is up 7.7% in 2024, as of Friday's market close. The Russell 1000 Value index gained 4.5% during the same period.

 

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