What are the key differences in the underlying investment approach between AVEM and DFAE?

AVEM (Fund A) and DFAE (Fund B) both target diversified emerging markets but differ significantly in structure and focus. While both are active strategies rather than passive index trackers, AVEM tends to have a more concentrated exposure to specific sector leaders like semiconductors, whereas DFAE employs a broader systematic approach based on factor premiums such as size and value. The funds also differ in scale, with AVEM holding $28.4 billion versus DFAE's $10.2 billion. These structural distinctions mean that while the asset class is the same, the portfolio composition and risk exposures can vary substantially.

How do the inception dates of AVEM and DFAE affect their historical track records?

The inception dates serve as the starting point for measuring a fund's performance history. AVEM launched on September 17, 2019, giving it a slightly longer operational history than DFAE, which began trading on December 2, 2020. While both funds are relatively young compared to legacy index funds, this extra year and a quarter for AVEM means its historical returns cover a longer period of market cycles. Investors reviewing past performance should recognise that neither fund has a multi-decade record, so data limitations are a critical factor in evaluating long-term stability and strategy efficacy.

How does the expense ratio comparison between AVEM and DFAE impact investment costs?

Expense ratios represent the annual operating costs deducted from fund assets. DFAE charges 0.29% compared to AVEM's 0.33%, a difference of 0.04 percentage points. This makes DFAE marginally more cost-effective for long-term holdings. However, this 0.04% difference is relatively small and should be viewed in the context of potential differences in portfolio returns. Investors should note that a higher fee does not guarantee better performance, but in this instance, the lower cost of DFAE provides a slight hurdle rate advantage.

Which ETF provides better income potential based on dividend yields?

AVEM offers a higher dividend yield of 2.50% compared to DFAE's 1.72%. For income-oriented investors seeking regular cash flow from their emerging markets allocation, AVEM generates a more significant yield on its holdings. This higher distribution rate suggests AVEM's portfolio contains more companies that prioritise dividend payments or has specific yield-enhancing strategies. Conversely, DFAE's lower yield indicates its focus may lie elsewhere, potentially in capital appreciation or its core systematic factors, making it less suitable for those whose primary goal is maximising immediate cash income.

What does the top holdings data suggest about the funds' diversification?

The top holdings reveal concentration risks and specific market bets. AVEM features TSM at 6.39%, indicating significant exposure to the semiconductor sector in Taiwan. DFAE does not list a top holding above 0.42% in the provided data, suggesting a more dispersed portfolio or lower concentration in single names for its top tier. While both share BABA and IBN in their top lists, AVEM's heavy weighting in TSM creates a divergence, whereas DFAE appears to spread its capital across a broader range of emerging market firms without one dominating at that scale.

Are there significant overlaps in the portfolios of AVEM and DFAE?

Both funds share specific large-cap emerging market stocks in their top ten portfolios, notably BABA (Alibaba Group) and IBN (ICICI Bank). This overlap indicates that both strategies identify these companies as significant constituents of the emerging market universe. However, the weighting differs: AVEM holds BABA at 0.71% and IBN at 0.46%, while DFAE holds IBN at 0.42% and BABA at 0.36%. While these shared names anchor both portfolios, the rest of their holdings diverge, meaning the funds are not direct substitutes despite holding similar well-known names.

What category and asset class do these funds represent for global portfolios?

Both AVEM and DFAE fall under the category of Diversified Emerging Mkts. This means they provide exposure to the stock markets of developing economies, a sector typically associated with higher growth potential but also higher volatility compared to developed markets. In a global portfolio, these ETFs are generally allocated to the international equity sleeve to capture the growth of countries in Asia, Latin America, and beyond. Since neither fund tracks a specific benchmark index, their performance relative to an emerging market benchmark is determined by active management decisions.

How do the funds' net assets and issuers influence perceived stability?

AVEM is an ETF managed by ARK with substantial net assets of $28.4 billion, indicating deep liquidity and a well-established presence in the market. DFAE is offered by Dimensional with $10.2 billion in net assets. The larger asset base of AVEM may imply tighter bid-ask spreads for traders, while DFAE's size remains sufficient for institutional and retail participation. The difference in issuers also reflects the strategies; Dimensional is known for systematic quantitative investing, whereas ARK is recognised for active management, which influences how the funds are expected to behave in different market conditions.

Is it possible to determine sector diversification directly from the fund data?

Sector weight data is not available for either AVEM or DFAE. Consequently, it is not possible to perform a direct sector allocation comparison, such as determining the percentage of the portfolio in Financials or Technology, based solely on the provided figures. Investors seeking a deep understanding of sector risk would need to consult external portfolio holdings reports. The absence of this data means one cannot immediately verify if either fund is overweight or underweight specific sectors relative to a standard benchmark.

Are these funds considered passive or active ETFs?

Both funds do not specify a tracked index, which indicates they are actively managed rather than passive ETFs. AVEM (Fund A) is managed by ARK, a firm known for thematic and active strategies, while DFAE (Fund B) is managed by Dimensional, which utilises active, systematic factor-based approaches. Because they are active, their holdings and performance do not necessarily correlate perfectly with a specific benchmark, distinguishing them from traditional index-tracking emerging market funds.

AVEM vs DFAE

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare Avantis Emerging Markets Equity ETF (AVEM) and Dimensional Emerging Core Equity ETF (DFAE). Review fees, holdings, dividends, and market tracking methods. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

AVEM

Metric

DFAE

0.33%

Expense Ratio

0.29%

2.50%

Dividend Yield

1.72%

$28.44B

Net Assets

$10.16B

4,046

Holdings

6,234

Sep 17, 2019

Inception Date

Dec 2, 2020

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Index Tracked

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Diversified Emerging Mkts

Fund Category

Diversified Emerging Mkts

DFAE costs about $4.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	AVEM	DFAE
BABAAlibaba Group Holding Limited	0.71%	0.36%
IBNICICI Bank Limited	0.46%	0.42%

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Investment Analysis

AVEM

Pros

AVEM features a higher dividend yield of 2.50%, potentially appealing to income-oriented investors.
The fund's substantial net assets of $28.4 billion suggest strong liquidity and established market presence.
Top holdings like TSM at 6.39% may benefit from significant exposure to semiconductor sector growth.

Considerations

AVEM's expense ratio of 0.33% is slightly higher compared to DFAE's 0.29%.
Absence of sector weight data hinders understanding of the fund's diversification strategy.
Inception date of September 17, 2019, makes its track record less mature than some competitors.

DFAE

Pros

DFAE has a lower expense ratio of 0.29%, making it more cost-effective for investors.
The inclusion of shared top-10 holdings such as BABA and IBN indicates alignment with market trends.
Net assets of $10.2 billion suggest moderate liquidity for investors trading this ETF.

Considerations

DFAE offers a lower dividend yield of 1.72%, which might be less attractive for income-focused investors.
Data regarding sector weights is not available, limiting visibility into portfolio diversification.
Inception on December 2, 2020, means its performance record is shorter than AVEM's.

About AVEM and DFAE

AVEM (AVEM)

The Avantis Emerging Markets Equity ETF (AVEM) offers investors a structured way to gain exposure to a broad range of stocks in emerging market economies. As an exchange-traded fund launched in September 2019, it currently holds a substantial portfolio of 4,046 holdings with net assets of USD 28.44 billion. This fund fits within the Diversified Emerging Markets category, which includes economies from Asia, Latin America, Africa, and Eastern Europe. While emerging markets can provide opportunities for growth that developed markets might not offer, they also tend to be more volatile. The fund features a dividend yield of 2.50% and an expense ratio of 0.33%. Investors should remember that share prices and yields can rise as well as fall, and returns are not guaranteed.

DFAE (DFAE)

The Dimensional Emerging Core Equity ETF (DFAE) offers investors broad exposure to the global emerging markets landscape. Launched in late 2020, this fund holds a substantial net asset base of approximately USD 10.16 billion and maintains a competitive expense ratio of 0.29%. With over 6,200 individual holdings, it provides extensive diversification across various sectors and countries within emerging economies. The fund currently yields an estimated 1.72% through dividends, although it is worth noting that dividends are not guaranteed and can fluctuate based on market conditions and company performance. Designed for those seeking to participate in the growth potential of developing nations, this ETF aims to capture core market returns rather than betting on specific sectors. Investors should remember that emerging markets can be more volatile than developed ones, and the value of investments can fall as well as rise.

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AVEM vs DFAE

Fund Snapshot