Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTMarc GubertiMon, June 29, 2026 at 1:55 PM GMT+2 4 min readQuick ReadAVUV has surged 23% year to date and 39% over 12 months, with further gains hinging on the Fed resuming rate cuts before September.American Eagle Outfitters (AEO) guides to a 15% tariff rate in the back half of the year, posing direct risk to AVUV's consumer discretionary holdings.Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Abercrombie & Fitch didn't make the cut. Grab the names FREE today.The Avantis U.S. Small Cap Value ETF (NYSEARCA:AVUV) is having the kind of year that small-cap value advocates have been promising since 2021. AVUV is up 23% year to date and 39% over the past 12 months, beating the Russell 2000 by roughly two points and outpacing the passive small-cap value benchmark by a wider margin. With roughly $23.5 billion in net assets, AVUV is now the dominant active vehicle in this corner of the market, and the next 12 months will test whether the rally has another leg.1st footage / Shutterstock.comThe setup heading into the second halfAVUV's portfolio leans hard into the parts of the market that respond most violently to interest rates and consumer spending. The fund's largest positions include Five Below at roughly 1%, GATX near 0.9%, and Avnet around 0.8%, with deep representation in regional banks, energy producers, and specialty retail. That mix has worked because the Fed cut 75 basis points between September and December last year, lowering the funds rate to 3.75%, then paused. Small caps got the relief; now they need the next move.Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Abercrombie & Fitch didn't make the cut. Grab the names FREE today.The macro factor that matters most: the Fed's next decisionThe single most important variable for AVUV over the next year is whether the Fed resumes cutting before September. The fund's heavy exposure to leveraged small-cap balance sheets, financials like Axos Financial, Bank OZK, and Bread Financial, and rate-sensitive consumer names means another 50 basis points of easing would lower refinancing costs and steepen the yield curve favorably for net interest margins. The funds rate has held at 3.75% for six months, and the 10-year Treasury is near 4.4%, close to its 12-month average.Watch the CME FedWatch tool and the dot plot updates that accompany each FOMC meeting. The specific threshold to monitor: if futures pricing for a September cut falls below 50%, small-cap value historically gives back gains quickly. If a cut gets pulled forward to July, expect AVUV's regional bank and consumer discretionary sleeves to lead.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info