The Rise of Avantis: How Two DFA Veterans Built a $150 Billion Factor Shop in Seven Years

On June 25, 2019, American Century Investments announced it had hired two executives to build a new investment business from scratch. The names mattered more than the press release let on: Eduardo Repetto had spent 17 years at Dimensional Fund Advisors, serving as chief investment officer from 2007 and co-CEO from 2009, and Patrick Keating had spent 15 years there, most recently as chief operating officer.¹ Three months later their new brand, Avantis Investors, listed five ETFs. Just over six and a half years after that, Avantis crossed $150 billion in assets under management.²

Few systematic-investing franchises have scaled this quickly. AVUV, the Avantis US Small Cap Value ETF, became the franchise’s signature product and one of the most discussed funds on investing forums and financial Twitter. This guide traces how it happened, what Dimensional did and did not get wrong, and what the story should and should not change about your portfolio.

Where Avantis came from

Avantis was staffed, from day one, by people who had spent their careers running Dimensional portfolios. The September 2019 launch announcement listed Repetto as chief investment officer alongside senior portfolio managers Daniel Ong, Mitchell Firestein, and Ted Randall, all previously senior portfolio managers at DFA.³ Phil McInnis, who had headed portfolio solutions at DFA, joined as chief investment strategist. The pipeline has kept flowing: in January 2026, Joseph Chi, DFA’s former co-head of portfolio management and investment committee chairman, joined as a senior portfolio manager.⁴

That pedigree solved the cold-start problem that kills most new asset managers. An advisor evaluating AVUV in 2020 was not betting on an unknown startup’s untested process. The proposition was a team that had spent decades building and running DFA portfolios, applying a related philosophy inside an ETF at 25 basis points.

The choice to build inside American Century, rather than as an independent firm, was just as consequential. Repetto has said that American Century already had the infrastructure in place, so incremental costs would be low, allowing for low costs to investors.⁵ Custody, legal, compliance, and a seasoned distribution organization came with the building. Avantis got a startup’s clean sheet of paper without a startup’s overhead, and its parent got a credible entry into systematic investing that its own active lineup had never provided.

There is a detail in Repetto’s background that fits the firm he built. He is not a career fund marketer; he holds a Ph.D. in aeronautics from Caltech and came to finance as an engineer.¹ Avantis treats portfolio management the way an engineer treats a design problem: define the objective, build a model grounded in published research, account for costs and constraints, and refine the implementation rather than mechanically tracking an index.

The rise, milestone by milestone

The asset growth is easiest to appreciate as a sequence. Every figure below comes from an American Century or Avantis press release.²

Morningstar profiled the firm in January 2026 as one of the fastest-growing fund companies it tracks, with $110 billion in assets and AVUV around $23 billion.⁶ By mid-2026, AVUV held $29.1 billion,⁷ and ETF analysts noted it had overtaken Vanguard’s VBR to become the largest small-cap value ETF outright.⁸ A fund category that Vanguard and BlackRock had owned for two decades acquired a new leader that did not exist in 2018.

Four accelerants

Four ingredients, each available to other firms too, compounded into the growth curve above.

1. A strategy with decades of evidence behind it

AVUV does not simply buy small stocks, and it does not simply buy cheap ones. It systematically emphasizes small companies that trade at low valuations and earn high profits, with portfolio managers given discretion over when and how to trade rather than rebuilding the portfolio on an index calendar.³ The academic motivation is real. Fama and French added profitability to their asset-pricing framework in the five-factor model,⁹ Novy-Marx showed that profitable firms earn higher average returns than unprofitable ones and that profitability screens strengthen value strategies,¹⁰ and Asness and coauthors found that the size premium becomes far more reliable once low-quality junk stocks are controlled for.¹¹ In small caps, where the cheapest names skew toward distressed and persistently unprofitable firms, that screen matters; our guide to the profitability factor covers the evidence in depth.

Avantis did not discover any of this. Dimensional had been incorporating profitability and patient trading years before Avantis existed, and its US Small Cap Value Portfolio (DFSVX) has run the strategy since 1993; Dimensional reports that the fund beat the Russell 2000 Value Index by 1.80 percentage points annualized from inception through September 2024, a comparison the firm itself selects.¹² Avantis’s contribution was packaging, pricing, and access, which is exactly why the next three accelerants did the compounding.

2. The ETF wrapper arrived at the right moment

Avantis listed its first five ETFs in late September 2019,³ operating under an exemptive order the SEC had granted American Century ETF Trust for actively managed ETFs back in October 2017. The regulatory tailwind arrived immediately afterward: Rule 6c-11, the so-called ETF Rule the SEC announced that same week, took effect in December 2019, replaced fund-by-fund exemptive orders a year after that, and gave every standard ETF the custom-basket flexibility that exemptive orders issued after roughly 2006 had restricted.¹³ Custom baskets make a flexibly managed, daily-traded portfolio far easier to run inside an ETF, and Dimensional credits exactly that provision for enabling its own approach in the wrapper.¹⁴ Avantis did not need the new rule to launch; it was already operating in the wrapper when the rules made the wrapper friendlier for everyone. Dimensional listed its first ETFs in November 2020, more than a year after AVUV,¹⁵ and its dedicated small-cap value ETF, DFSV, arrived in February 2022, nearly two and a half years after AVUV. In ETF land, where liquidity and track record compound, a head start measured in years is enormous.

3. Open access at 25 basis points

For decades, Dimensional’s mutual funds were, in the words of its own prospectus, “generally available only to Institutional Investors and clients of registered investment advisors.”¹⁶ A DIY investor who had read the Fama-French literature and wanted the canonical implementation generally had to hire an advisor to get it. The funds were also priced for that channel: DFSVX cost 0.52% in 2018.¹⁶

Then former DFA executives showed up with a closely related strategy that was cheap, liquid, tax-efficient, and one click away in any brokerage account. Personal-finance commentators have asked pointedly whether Dimensional’s advisor-first distribution left its most natural retail audience, the factor-literate DIY investor it had spent decades educating, waiting for exactly this product. It is a fair question, and the flows suggest the answer. The gate has since come down on both sides: anyone can buy Dimensional’s ETFs, and DFSVX’s expense ratio has fallen to 0.31%, with DFSV at 0.30% against AVUV’s 0.25%.¹⁶ The pricing gap that existed in 2019 has mostly closed. The head start already happened.

4. American Century’s distribution machine

The popular version of the AVUV story stars Reddit threads and podcast endorsements, and the fund genuinely does have an unusually devoted DIY following. The public evidence suggests the advisor and institutional channels mattered far more to the $150 billion outcome than the online discussion would imply. Repetto has repeatedly credited the financial-advisor channel: “Growth has accelerated because more and more advisors are learning about us,” he told RIABiz in late 2025.¹⁷ American Century’s existing sales organization gave a three-month-old firm access to thousands of advisory practices, and low-cost factor ETFs slot neatly into advisor model portfolios. That is a more uncomfortable competitive fact for Dimensional than any retail phenomenon: Avantis was not only routing around DFA’s advisor gate, it was competing for the advisors themselves, speaking the vocabulary of systematic investing that DFA had spent 40 years teaching them.

Performance closed the loop

Product design and distribution made the growth possible; favorable early realized returns appear to have accelerated the flywheel dramatically. A dollar invested in AVUV at the start of October 2019 grew to $2.79 by July 2026, ahead of the DFA mutual fund running the same style ($2.58), the Russell 2000 Value ETF IWN ($2.11), and the global market via VT ($2.39).

Two things in that chart carried commercial weight. First, AVUV beat the passive alternative in its own category by a wide margin, which is the comparison an advisor or DIY investor runs first. Second, it edged out the global market over the period, so the tilt never had to be defended as a drag. A new fund that spends its first five years underperforming a total-market index gets abandoned; AVUV never forced that conversation. Through June 30, 2026, its own fact sheet showed a 16.32% annualized return since inception and a 23.09% YTD return, slightly ahead of the Russell 2000 Value’s 22.99%.⁷

Where did the outperformance come from? Factor regressions give a precise answer. Each fund’s monthly excess return below is regressed on the five Fama-French factors over the same October 2019 to June 2026 window (DFSV over its shorter life, and AVDV against the developed ex-US factors).¹⁸

Read the table alongside the growth chart and the story sharpens. AVUV and DFSVX are nearly the same animal: their monthly returns correlate at 0.99, their loadings differ mainly in degree, with AVUV tilting slightly harder into small (0.91 vs. 0.82), value (0.54 vs. 0.50), and profitability (0.27 vs. 0.24), and both funds’ residual alphas (+0.87% and -0.07% a year) are statistically indistinguishable from zero. The contrast with IWN sits in the exposures themselves: a Russell 2000 Value tracker carries essentially no profitability loading (-0.01 against AVUV’s 0.27) and a milder value tilt. Multiplying each loading by its factor’s realized return, those exposure differences put AVUV roughly 1.7 percentage points a year ahead of IWN over the window. The rest of the gap is the difference in residuals, chiefly IWN’s estimated alpha of -2.3% a year, which is what the five-factor model leaves unexplained and should not be read as the return to the profitability screen; the screen’s fingerprint is the RMW loading itself.

This is what the flywheel looked like from the inside: differentiated product, early adopters, strong realized returns, advisor and media attention, more assets, deeper liquidity, easier due diligence, more model-portfolio inclusions, more assets. By the time Allan Roth examined the firm for ETF.com in 2024, he concluded it was growing fast for the right reasons: low fees, broad diversification, and a disciplined process rather than a hot streak.⁵

The view from Dimensional

The easy version of this story ends with the incumbent asleep at the wheel. Dimensional’s actual record since 2019 argues otherwise. It listed its first ETFs in November 2020 and converted several tax-managed mutual funds into ETFs, the largest such conversions ever done at the time.¹⁵ It launched DFSV in 2022 and cut DFSVX’s fee from 0.52% to 0.31%.¹⁶ In November 2025 it won the SEC’s first exemptive order in decades allowing ETF share classes on existing mutual funds.¹⁹ And in February 2026 it crossed $1 trillion in global assets, citing Morningstar data ranking it the largest active ETF issuer in the United States.²⁰ A firm roughly seven times Avantis’s size, at an all-time high in assets, did not lose the war.

What Dimensional ceded was a head start. The measurable gap is two and a half years between AVUV’s launch and DFSV’s, and the access gap ran longer, since the mutual funds stayed advisor-gated while the fee cuts came in stages. Its strategic error was treating the wrapper and the access model as secondary to the investment engine, when the market was deciding they were part of the product. There was a real tradeoff behind that choice: the advisor-gated model protected an ecosystem DFA had spent decades building, whose planning and behavioral-coaching value was genuine, and Avantis demonstrated its opportunity cost only in hindsight. The research had long been public; Dimensional itself argues that because capital-markets research is publicly available, implementation is the differentiator. Avantis extended that logic one step further: distribution, wrapper, price, and access are implementation too. The people best positioned to see that were the people who had spent 17 years inside the incumbent, which is why the disruption came from DFA’s own alumni rather than from a Silicon Valley outsider.

The second act: AVDV

Through 2024, a skeptic could dismiss Avantis as one lucky fund riding one US small-value cycle. Then the firm’s international sleeve took over. AVDV, the Avantis International Small Cap Value ETF, returned 49.4% in calendar 2025 while AVUV managed 7.4% (author’s calculation from dividend-adjusted returns; the reverse had happened in 2021, when AVUV gained 42.2% against AVDV’s 15.8%). Through June 30, 2026, AVDV’s one-year NAV return of 34.6% roughly doubled its Morningstar Foreign Small/Mid Value category’s 20.0%,²² and the fund reached $19.2 billion in assets.²²

Commercially, the timing could hardly have been better: just as US investors were rediscovering international stocks, the firm’s ex-US flagship posted the category’s standout numbers, and the pitch shifted from “AVUV is a great fund” to “Avantis is a great platform.” That second claim is the one that competes with Dimensional the firm rather than with any single ETF.

Analytically, resist the upgrade. AVDV holds more than 1,700 stocks;²² nobody picked a handful of ten-baggers. The regression table above shows what the fund is: developed ex-US exposure with a market beta modestly above 1, plus deep small, value, and profitability tilts. The tilts are visible in the holdings too: portfolio book/market of 0.71 against the MSCI World ex USA Small Cap benchmark’s 0.53, and profits/book of 0.35 against 0.29.²² 2025 was a year when international beat the US, value beat growth abroad, and a falling dollar amplified foreign returns for US holders. AVDV is close to the maximum-exposure vehicle for exactly that combination; its value loading alone contributed roughly 4.5 percentage points a year of excess return over the full window, and its residual alpha, 1.0% per year with a t-statistic of 0.7, is again indistinguishable from zero. The 2025 result is consistent with the exposures investors hired the fund to hold. It is weak evidence about stock selection, in either direction. The 2021/2025 mirror image between AVUV and AVDV makes the same point from the other side: diversified factor sleeves take turns, which is precisely why you hold more than one. Our AVUV vs. AVDV comparison works through that pairing.

How much was skill and how much was timing

Separate the two ledgers. The engineering was real: the fee, the wrapper, the profitability screen, the flexible trading, the American Century partnership, and the advisor-first distribution were all deliberate choices that a less experienced team would have gotten wrong. The timing was luck: a September 2019 launch meant AVUV’s track record began months before the sharpest value rotation in twenty years. Run the counterfactual where the same funds launch in 2014 and spend five years trailing the S&P 500 through the growth-dominated late 2010s, and the same product design plausibly remains a much smaller niche franchise for years. Good realized returns arrived before investors’ patience ran out, and that ordering was not something Repetto could engineer.

The alphas in the regression table are the right way to keep both ledgers honest. Nothing in AVUV’s or AVDV’s residual return, after accounting for the exposures they advertise, is statistically distinguishable from zero. Avantis earned its assets by delivering the exposures it promised, cheaply and well, during a stretch when those exposures paid. That is the whole claim, and it is enough; five-year fund returns cannot settle whether Avantis implements better than Dimensional, as Allan Roth cautioned when the gap was at its widest.⁵

What this means for your portfolio

For an investor who has deliberately decided to tilt toward US small-cap value, AVUV remains one of the strongest available implementations, and it is the US small-value sleeve I hold myself. The combination of value and profitability screens, broad diversification, flexible trading, and a 0.25% fee has a stronger evidence base than a mechanical index of cheap small caps, and the regression table shows that difference is real, most visibly in IWN’s missing profitability exposure. The VBR vs. AVUV and AVUV vs. BSVO guides compare the implementations in detail.

Three conclusions the story does not support. First, “AVUV beat everything for five years, so buy it now” is performance chasing dressed up in factor language; the expected premium exists precisely because the tilt can trail a total-market index for a decade, as it did before AVUV existed. Second, an existing DFSV or DFSVX holder has no good reason to switch to AVUV on this evidence. The strategies are close cousins, the fee gap is five basis points, and realizing capital gains in a taxable account to swap between funds whose monthly returns correlate at 0.99 is a tax bill in exchange for noise. Third, most investors need neither fund. A small-value tilt adds tracking error, complexity, and long stretches of looking wrong next to a plain global index portfolio, which remains an entirely reasonable default. Hold the tilt only if you understand why it should work well enough to keep holding it when the five-year chart stops flattering it; our small-cap value guide is the place to pressure-test that conviction.

Frequently asked questions

Who owns Avantis Investors?

Avantis is a brand of American Century Investments, the Kansas City-based asset manager founded in 1958. It launched in 2019 when American Century hired Eduardo Repetto and Patrick Keating, both formerly of Dimensional Fund Advisors, to build it. It is not an independent company, which is part of why its funds could launch cheaply.

Is AVUV actively managed?

Yes, in the systematic sense. AVUV tracks no index; its managers screen the small-cap universe on valuation and profitability and trade with discretion over timing and cost. It is active management in service of factor exposure rather than stock-picking conviction, with turnover and fees far below traditional active funds.

Is AVUV better than DFSV?

On the data, they are close substitutes. AVUV tilts slightly harder into value, costs five basis points less, and has the longer ETF track record; DFSV carries Dimensional’s four decades of institutional refinement. Since DFSV’s 2022 launch their loadings and returns have run nearly in parallel. Choosing between them matters far less than deciding whether you want the tilt at all.

Why did Eduardo Repetto leave DFA?

Repetto left Dimensional in 2017 after 17 years, including eight as co-CEO, and neither he nor DFA has publicly detailed the reasons. What is documented is what he did next: two years later he and Patrick Keating accepted American Century’s offer to build a systematic-investing business with ETFs at its center from day one.

Does the reported DFA sale affect AVUV or DFSV holders?

Not directly, and nothing has been announced. A fund’s assets belong to the fund, and a change of control at the manager triggers a governed process including board review. The practical risks for holders of any bespoke factor ETF are slower ones: strategy drift, fee changes, and product consolidation. Our guide to fund-sponsor risk walks through them.

AVDV returned over 30% in a year. Is it too late to buy?

That framing is the trap. AVDV’s 2025-26 surge came mostly from its deliberate exposures, international small value plus a falling dollar, paying off at once. Those exposures are no more attractive after the run-up than before it, and by valuation logic somewhat less. Buy AVDV if you want permanent, diversified ex-US small-value exposure at 0.36%; do not buy last year’s return.

Key takeaways

• The mechanism was ordinary; the speed was not. Avantis went from zero to $150 billion in six and a half years by combining a proven factor philosophy with a better wrapper, lower fees, open access, and an incumbent’s distribution network.
• Pedigree solved the cold-start problem. Ex-DFA leadership let a brand-new fund family skip the years of proving organizational competence that stall most launches.
• Dimensional ceded a wrapper and access head start, at a cost that was real rather than fatal. DFA reached $1 trillion in 2026 and now leads US active ETFs; what it gave up was the multi-year window in which its own alumni built the category’s defining products.
• Performance was the accelerant. AVUV’s returns since 2019 and AVDV’s 2025 surge came almost entirely from the factor exposures the funds advertise; residual alpha in both is statistically zero. Strong early returns built the franchise, and they do not prove Avantis implements better than DFA.
• Act on the exposures, never the chart. AVUV is a top-tier choice for a deliberate small-value tilt, switching from DFSV over five basis points is a taxable mistake, and a plain global index portfolio remains a perfectly good reason to own neither.

Related guides

• Small-Cap Value: the evidence for the premium these funds target, and the droughts that test it.
• AVUV, AVDV, and AVGV: how the Avantis lineup fits together in a portfolio.
• AVUV vs. AVDV: the US and international sleeves compared head to head.
• AVUV vs. BSVO: factor exposure, fees, and capacity across small-value ETFs.
• VBR vs. AVUV: why the cheaper fund is not automatically the better tilt.
• The Profitability Factor: the screen that separates Avantis and Dimensional from index small value.
• The Rumored DFA Sale and Fund-Sponsor Risk: what an ownership change would mean for taxable ETF holders.
• Is Factor Investing Dead?: how much of the published premiums survives costs and crowding.
• Dividend Growth vs. Small-Cap Value: the same regression toolkit applied across style ETFs.
• The ABCs of Systematic Factor Investing: the vocabulary behind SMB, HML, and RMW.

Sources

1. American Century Investments. “American Century Investments Hires Eduardo Repetto and Patrick Keating to Launch Avantis Investors” (June 25, 2019). Repetto’s 17-year DFA tenure, CIO from 2007, co-CEO from 2009, departure in 2017, Caltech Ph.D.; Keating’s 15 years at DFA including COO.
2. American Century / Avantis press releases: $1.5B, July 2020; ~$14B at the three-year anniversary, September 2022; $50B, July 2024; $100B and ~$27B of 2025 net inflows, December 2025; $150B with AVUV and AVEM above $25B each, June 2026.
3. Avantis Investors. “Avantis Investors by American Century Investments Launches Suite of Low-Cost Exchange Traded Funds” (September 26, 2019). The five inaugural ETFs, AVUV’s 0.25% expense ratio, and the founding portfolio-management team.
4. Avantis Investors. “Avantis Investors Adds to Portfolio Management Team” (January 29, 2026). Joseph Chi, former DFA co-head of portfolio management, joins Avantis.
5. Roth, Allan. ETF.com. “Avantis Growing Fast for the Right Reasons” (May 2024, via Yahoo Finance syndication). Repetto on American Century’s infrastructure enabling low fees; the caution against reading a few years of outperformance as proof of a superior process.
6. Morningstar. “How Avantis Became One of the Fastest-Growing Fund Companies” (January 2026). Firm assets of $110 billion and AVUV around $23 billion.
7. Avantis Investors. AVUV fact sheet as of June 30, 2026. $29.1 billion in assets; NAV returns of 23.09% YTD and 16.32% annualized since the September 24, 2019 inception.
8. ETF.com (Bloomberg Intelligence commentary, syndicated). AVUV as the largest small-cap value ETF, ahead of VBR (2026).
9. Fama, Eugene F. and Kenneth R. French. “A five-factor asset pricing model” Journal of Financial Economics (2015).
10. Novy-Marx, Robert. “The other side of value: The gross profitability premium” Journal of Financial Economics (2013).
11. Asness, Clifford, Andrea Frazzini, Ronen Israel, Tobias Moskowitz, and Lasse Pedersen. “Size matters, if you control your junk” Journal of Financial Economics (2018).
12. Dimensional Fund Advisors. “The Evolution of Small Cap Investing: Four Decades of Innovation at Dimensional” (November 2024). DFSVX’s 1993 launch and Dimensional’s reported 1.80 percentage-point annualized outperformance of the Russell 2000 Value through September 2024.
13. U.S. Securities and Exchange Commission. “SEC Adopts New Rule to Modernize Regulation of Exchange-Traded Funds” (announced September 26, 2019); per the adopting release (84 FR 57162), Rule 6c-11 became effective December 23, 2019, with prior exemptive orders rescinded one year later. Avantis’s ETFs launched under the SEC exemptive order granted to American Century ETF Trust for actively managed ETFs (IC-32871, October 25, 2017).
14. Dimensional Fund Advisors. “Dimensional Equity Investing in an Active ETF Structure” (November 2020). Credits Rule 6c-11’s custom baskets with enabling Dimensional’s daily-managed approach in ETFs.
15. Dimensional Fund Advisors. “Dimensional Fund Advisors Lists Active Exchange-Traded Funds” (November 18, 2020); and “Dimensional Lists Four New ETFs Following the Industry’s Largest Mutual Fund-to-ETF Conversion” (June 2021), roughly $29 billion across four tax-managed funds.
16. SEC EDGAR, DFA Investment Dimensions Group and Dimensional ETF Trust prospectus filings (Form 485BPOS): U.S. Small Cap Value Portfolio fee table showing 0.52% total expenses in the February 2018 filing and 0.31% in the February 2026 filing; DFSV at 0.30% in the February 2026 Dimensional ETF Trust filing. The same prospectuses carry the “generally available only to Institutional Investors and clients of registered investment advisors” language for the mutual-fund share classes.
17. RIABiz. “Eduardo Repetto answers 10 questions about Avantis Investors’ improbable climb to $100 billion” (December 12, 2025). Repetto on advisor-channel growth.
18. Kenneth R. French. Data Library. US five-factor and developed ex-US five-factor monthly series used in the regressions and chart.
19. Dimensional Fund Advisors. “Dimensional Receives SEC Approval for ETF Share Classes” (formal exemptive order November 17, 2025, following the SEC’s September 29, 2025 notice).
20. Dimensional Fund Advisors. “Dimensional Fund Advisors Crosses $1 Trillion in Global Assets Under Management” (February 9, 2026). Includes the Morningstar-sourced largest active US ETF issuer ranking.
21. Citywire. “Dimensional Fund Advisors exploring sale: Sources” (May 27, 2026). Reporting based on sources; no transaction announced as of August 2026.
22. Avantis Investors. AVDV fact sheet as of June 30, 2026. $19.2 billion in assets, 34.63% one-year NAV return, 1,717 holdings, 0.36% expense ratio. Category comparison (Morningstar Foreign Small/Mid Value, 20.0% one-year) per Schwab’s Morningstar-data ETF report.