Institutional ETF Investment Uptick
Merited Wealth LLC Significantly Increases Stakes Across Five Key ETFs in First Quarter
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Key Points
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AVDE tracks the MSCI World Ex USA IMI Index and is described as an actively managed portfolio of non-U.S. developed-market equities from all market caps.
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Beyond Merited Wealth, several other institutions opened new AVDE positions or increased stakes in prior quarters, illustrating broader external interest in the ETF (examples include Hantz Financial Services, RHL Group LLC, US Bancorp DE, Investment Research & Advisory Group Inc., and Annis Gardner Whiting Capital Advisors LLC).
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Valley National Advisers Inc. boosted its AGG stake by 339.0% in the fourth quarter, bringing its holding to 259 shares (valued around $25,000), highlighting continued institutional activity in the iShares Core U.S. Aggregate Bond ETF.
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BNY Mellon Corp. increased its BKAG stake by 0.4% in the fourth quarter, now owning 2,805,541 shares valued at about $118.9 million, indicating sizable appetite among large banks for BKAG holdings.
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CGDV saw additional new stake activity in Q4, with Pflug Koory LLC purchasing a new CGDV stake and Triumph Capital Management, Bay Harbor Wealth Management LLC, Tucker Asset Management LLC, and Flagship Wealth Advisors LLC also taking on new CGDV positions.
Merited Wealth LLC nearly doubled its position in a core U.S. bond fund and more than doubled its stake in an international equity ETF during the first quarter of 2024, according to MarketBeat. The firm's AGG holding jumped 101.6% to 59,742 shares worth about $5.93 million, while its AVDE stake surged 122% to 48,752 shares valued at roughly $4.1 million.
The moves span five ETFs — covering U.S. bonds, international stocks, and dividend-value equities — and reflect a broader institutional shift toward diversification away from U.S. mega-cap stocks, according to Ticker Report.
AGG and JCPB Become Firm's Top Bond Holdings
Merited Wealth's biggest bet was on fixed income. Its iShares Core U.S. Aggregate Bond ETF (AGG) position more than doubled, rising to 59,742 shares. That makes AGG its second-largest holding overall, according to MarketBeat. The firm also boosted its JPMorgan Core Plus Bond ETF (JCPB) stake to 107,008 shares worth $5.04 million, making it the fourth-largest position.
Strategists say the moves reflect a conviction that interest rates were nearing a peak in early 2024. After years of bond losses caused by rapid rate hikes, investors began locking in higher yields. BlackRock's quarterly outlook described it simply: "The 'Core' is back." AGG traded at roughly $99.21 per share at the end of Q1, per Ticker Report.
AVDE Surge Signals a Bet on Non-U.S. Markets
The 122% jump in AVDE shares was the firm's most aggressive single move. AVDE is run by Avantis Investors and tracks international developed-market stocks across all company sizes. It focuses on non-U.S. markets like Europe and Japan. After years of U.S. tech stocks dominating returns, Merited Wealth appears to be betting that gap will narrow.
Merited Wealth is not alone. Institutions including Hantz Financial Services, RHL Group LLC, and US Bancorp DE have also opened or expanded AVDE positions in recent quarters, according to MarketBeat. The ETF now ranks as Merited Wealth's sixth-largest holding, with 48,752 shares worth about $4.1 million.
CGDV and BKAG Round Out a Diversified ETF Push
Merited Wealth also grew its Capital Group Dividend Value ETF (CGDV) stake by 30.7%, reaching 62,003 shares worth $2.64 million — its 16th-largest holding. CGDV focuses on dividend-paying value stocks. Several other boutique firms made new CGDV purchases in Q4, including Pflug Koory LLC, Triumph Capital Management, and Flagship Wealth Advisors LLC, per MarketBeat.
The firm also added to its BNY Mellon Core Bond ETF (BKAG) position, bringing it to 17,832 shares valued at about $753,000. For context, BNY Mellon Corp itself owns 2,805,541 BKAG shares worth $118.9 million — a reminder of how much larger institutional players dominate these funds.
Active ETFs Draw Growing Institutional Interest in 2024
Several of the five ETFs Merited Wealth bought — including AVDE and JCPB — are not standard index trackers. They use active or factor-based strategies, meaning managers make deliberate choices about which stocks or bonds to hold. According to Morningstar data, active ETFs captured roughly 25% of all ETF inflows in early 2024, despite holding a small share of total ETF assets.
Critics from the passive-investing camp argue that higher fees on active funds rarely pay off over time. But firms like Merited Wealth appear willing to pay for what they see as smarter selection — especially in bond markets and international equities where stock-picking may add more value than in broad U.S. index funds, according to Ticker Report.
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