Episode summary
Eduardo Repetto & Caitlin Ebanks: Opening the Avantis CAGE | Rational Reminder 401
The Rational Reminder Podcast
· · 1 hr 6 min · Guests: Eduardo Repetto, Caitlin Ebanks
Summary
Avantis is bringing a Canadian ETF lineup through CIBC that closely mirrors its U.S. factor-investing approach, with Canadian wrappers, direct security ownership, and low turnover. The hosts frame the launch as a major step in making factor tilts as accessible as plain-vanilla asset allocation ETFs, while still acknowledging that tracking error and factor-style underperformance can be uncomfortable for investors.
Eduardo Repetto says the partnership came together after years of conversations once Avantis had built more track record and CIBC became comfortable with the firm’s process and growth. Caitlin Ebanks says CIBC wanted a portfolio-construction-first ETF shelf and saw Avantis as a transparent specialty manager that could fit that framework. Both sides emphasized that pricing discipline was central to getting the launch done.
The lineup includes Canadian equity, U.S. equity, emerging markets, international developed markets excluding Canada, and a global equity fund-of-funds called CAGE that adds an extra global small-value tilt. Repetto said the expected value added for CAGE is 1.5 to 2 percentage points a year with about 3 to 4 percent tracking error, and he argued the strategy is designed to harvest higher expected returns efficiently rather than create unnecessary noise.
Key takeaways
- Eduardo Repetto says Avantis expects CAGE to add 1.5 to 2 percentage points a year with about 3 to 4 percent tracking error.
- Caitlin Ebanks says CIBC built the shelf around portfolio construction and chose Avantis because it is transparent and proven.
- The Canadian ETFs will hold securities directly, except for CAGE, which will own the other Canadian-listed ETFs.
- Repetto says the Canadian lineup is meant to be low-fee and low-turnover, with fees described as very competitive versus local alternatives.
- Ebanks says CIBC will likely publish more collateral over time, but Canadian reporting rules limit some disclosures in the first year.
Notable quotes
“we're really now starting to make that splash. Um we we started with portfolio construction”
“So we think the value added will be 1.5 to 2 2%. Uh the tracking error is around 3 4%”
“they slightly more expensive than the US products. There is slightly higher cost here in Canada than in the US”
How the episode opens
This is the Rational Reminder podcast, a weekly reality check on sensible investing and financial decision-making from two Canadians. We're hosted by me, Benjamin Felix, chief investment officer, and Cameron Passmore, chief executive officer at PWL Capital. And welcome to episode 401, and Ben.
The evolution continues. And this week we were joined by a guest that a lot of listeners will know, Eduardo Rapedto of Avantis. And we're talking about the launch of the Avantis ETFs in Canada.
And the evolution certainly is continuing. We talked about that in the episode, but I think there's an exciting time for investors in Canada. This is something that we we've been asking Eduardo about since he this is his third time, I believe, as a guest on the podcast.
We've asked them every time when when are you guys going to come to Canada? Uh and they launched USITS products for for European investors first and they they've they've launched in Australia, I think it mentioned as well. And and now they're finally launching products in Canada in partnership with CIBC ETFs, which is pretty cool.
and they talk about uh Caitlyn from from CIBC and Eduardo talk a little bit about the sort of genesis of that partnership and the things that they had to agree on and did agree on for this whole thing to to work from both of their perspectives. But yeah, it's it's a super exciting time where uh we we built some I mean Frankenstein's not not quite the right term, but we we we hacked together some factor tilted model portfolios years ago.
Yeah. I mean, it's kind of the the history of this podcast. We were talking about dimensional funds, which we use um like extensively at at PWL, and we would talk about, you know, factor tilts and and small cap value and premiums and multiffactor asset pricing and all that kind of stuff.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- factor investing
- avantis etfs canada
- fee discipline
- asset allocation etf cage
- tracking error
Companies and tickers mentioned
- CM
- Avantis Investors
- CIBC
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Rational Reminder Podcast, this episode and its artwork belong to Benjamin Felix, Cameron Passmore, and Dan Bortolotti. Octagon is not affiliated with the show; this page is an independent summary.
