This ETF strategy could potentially reduce market concentration risk for investors.

Those concerned about market concentration may want to explore value-oriented investment options.

Phil McInnis, the chief investment strategist of Avantis Investors, recommends a more diversified investment approach than focusing solely on index funds like the . He believes that his firm's exchange-traded fund strategy can yield better long-term returns by investing in companies with low valuations and strong balance sheets.

"He informed CNBC's "ETF Edge" that they would be less focused and making smaller bets on lower-valued, more profitable companies."

The Russell 1000 Value index is tracked by Avantis' U.S. Large Cap Value ETF (AVLV), with a profitability overlay applied by the fund managers.

"McInnis stated that while identifying companies trading at more attractive prices, they are also considering profits, which goes beyond the typical passive instruments that define value versus growth based on a single variable or a whole compendium of variables."

The Large Cap Value fund's next-largest holdings are , and , according to FactSet. The top sector weightings are financial services and retail, each comprising roughly 15% of the portfolio, with energy coming in third at nearly 12%.

McInnis stated that caps are in place at the company level to ensure that bets on sectors do not become too large and that the company is not overly concentrated in a single sector.

The Russell 1000 Value index gained 4.5% in 2024, while Avantis' Large Cap Value ETF experienced a 7.7% increase, as of Friday's market close.