Actively managed ETFs help investors gain exposure to some of the expertise and financial know-how of seasoned money managers, and the transparent ETF structure also provides people with a clearer picture of what one is buying into.
For example, investors have looked to a time-tested active approach to potentially enhance returns and provide greater stability, especially in times of heightened volatility. For example, the actively managed Davis Select U.S. Equity ETF (DUSA n/a), Davis Select Financial ETF (DFNL n/a), Davis Select International ETF (DINT n/a) and Davis Select Worldwide ETF (DWLD n/a) are backed by Davis Advisors’ focuses on long-term opportunities and incorporate the money manager’s judgement experience, high conviction, low turnover, accountability and alignment. The Davis team screens for fundamental characteristics, including cash flows assets and liabilities, and other criteria.
“The portfolios are performing as expected. Our spreads have been tight. We’ve been able to accommodate some very large trades. The structure really works, and we think it will really lay a great foundation for more folks to be in the space as well as give some gravitas to actively managed ETFs,” Dodd Kittsley, National Director for Davis Advisors, said at Inside ETFs 2019.
The management team looks to durability, adaptability and resiliency of a company for strong competitive advantages, superior business models, attractive financials and superior free cash flows. They also select those with proven, capable management with a track record of good decisions, intelligent capital allocators and alignment of interests. Additionally, the team focuses on discount to true value by calculating owner earnings to arrive at the true value of a company.
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