AVDV: The Commodity Engine Has Cooled, Japan Hasn't
Sentiment Analysis
AVDV has returned ~21% since my November Buy. The Japan thesis worked - but the outperformance came from somewhere I did not write about. Japan delivered in line; SCJ actually outran the fund. The breakaway came from a commodity sleeve, mostly gold miners, now cooled. The forward setup has turned. Gold looks rangebound, the Fed is hawkish, and the yen carry gap persists. No currency tailwind, no commodity steam. Downgrading to Hold.
Japan's reform is structural and intact. Long-term investors can accumulate in this consolidation, but there is no urgency today.
In November last year I had rated the Avantis International Small Cap Value ETF ( AVDV ) a Buy primarily relying on a Japan small-cap value thesis. Since that call, AVDV has outperformed the S&P 500
Source: Seeking Alpha
This content is not intended as investment advice or a recommendation. Any opinions expressed are solely the personal views of each article.