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Actively Managed ETFs Can Identify Powerful Trends

ETFs are known for their transparent nature, allowing investors to closely track the ins-and-outs of the underlying strategies, which some may think would be a detriment to an increasing number of active managers stepping into the space.

ETF Trends publisher Tom Lydon spoke with Dodd Kittsley, Director of Davis Advisors, at the 2017 Morningstar ETF Conference in Chicago September 6-8 to talk about fully transparent, actively managed ETFs.

"We feel like we're meeting an unmet need in the market place for delivering true, time-tested, proven active management in a traditional ETF structure," Kittsley said. "Allowing advisors to put their clients in a position to outperform and to be able to access some of the best ideas across the globe in a single portfolio."

With U.S. equities extending their bull run and market valuations appearing elevated, more investors are turning to foreign markets to find cheaper areas of opportunity.

"We do look at the ways companies compete, and they compete globally," Kittsley said. "They don't just compete within their own borders. One of the things we try to do - not just to identify the best stocks and the best opportunities, but what are some powerful trends with strong tailwinds."

Davis Advisors has identified a few of these powerful trends through its globally focused Davis Select Worldwide ETF (DWLD) . The active managers have the room to diverge away from global benchmarks and focus on rising growth opportunities that could translate to enhanced returns or increased alpha.

Related: Active Management Could Be Next ‘Engine of Growth’ for ETF Industry

ETF investors can also gain exposure to Davis’ proven research and investment styles through their other Davis Select U.S. Equity ETF (DUSA) and Davis Select Financial ETF (DFNL) .

For more ETF-related commentary from Tom Lydon and other industry experts, visit our video category.

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