Davis Advisors, begun trading three Transparent Actively Managed Equity ETFs , the Davis Select U.S. Equity ETF (Nasdaq: DUSA), the Davis Select Financial ETF (Nasdaq: DFNL) and the Davis Select Worldwide ETF (Nasdaq: DWLD) on Thursday, January 12, 2017. Here is a synopsis of the new ETFs:
1.
FUND INFORMATION:
| Symbol: DUSA | Exchange: NASDAQ |
| Name: Davis Select U.S. Equity ETF | Net Expense Ratio: 0.60% |
FUND OBJECTIVE:
The Davis Select U.S. Equity ETF is an actively managed fund which seeks long-term capital growth and capital preservation.
Davis Selected Advisers, L.P., the Fund’s investment adviser, uses the Davis Investment Discipline to invest the Fund’s portfolio principally in common stocks issued by large companies with market capitalizations of at least $10 billion. Under normal market conditions, the Fund will invest at least 80% of the Fund’s net assets plus any borrowings for investment purposes in equity securities issued by U.S. companies. The Fund is non-diversified and, therefore, is allowed to focus its investments in fewer companies than a fund that is required to diversify its portfolio. The Fund’s portfolio generally contains between 15 and 35 companies, although the precise number of its investments will vary over time. The Fund may invest a portion of its assets in financial services companies. The Fund may also invest in mid- and small-capitalization companies, which the Fund considers to be those companies with less than $10 billion in market capitalization. The Fund may invest up to 20% of net assets in non-U.S. companies. These non-U.S. company investments may include American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs).
Fund Holdings (01/13/17):
| Berkshire Hathaway Inc., Class B | BRK B | 9.46% |
| Amazon.com, Inc. | AMZN | 7.42% |
| Alphabet Inc., Class C | GOOG | 7.25% |
| United Technologies Corp. | UTX | 6.89% |
| American Express Co. | AXP | 6.36% |
| Apache Corp. | APA | 6.16% |
| Johnson Controls International PLC | JCI | 4.61% |
| Markel Corp. | MKL | 4.60% |
| Wells Fargo & Co. | WFC | 4.53% |
| JPMorgan Chase & Co. | JPM | 4.49% |
Index Sector Weightings (01/13/17):
| DUSA (%) | S&P 500 Index (%) | |
| Financials | 38.4% | 15.5% |
| Industrials | 15.2% | 10.3% |
| Energy | 14.1% | 7.4% |
| Consumer Discretionary | 13.2% | 12.2% |
| Materials | 7.6% | 2.9% |
| Information Technology | 7.3% | 20.2% |
| Health Care | 4.2% | 13.8% |
Useful Links:
DUSA Home Page
2.
FUND INFORMATION:
| Symbol: DFNL | Exchange: NASDAQ |
| Name: Davis Select Financial ETF | Net Expense Ratio: 0.65% |
FUND OBJECTIVE:
The Davis Select Financial ETF is an actively managed fund which seeks long-term growth of capital.
Davis Selected Advisers, L.P., the Fund’s investment adviser, uses the Davis Investment Discipline to invest, under normal market conditions, at least 80% of the Fund’s net assets plus any borrowings for investment purposes in securities issued by companies principally engaged in the financial services sector. The Fund is non-diversified and, therefore, is allowed to focus its investments in fewer companies than a fund that is required to diversify its portfolio. The Fund’s portfolio generally contains between 15 and 35 companies, although the precise number of its investments will vary over time. The Fund invests, principally, in common stocks (including indirect holdings of common stock through depositary receipts). The Fund may invest in large, medium or small companies without regard to market capitalization and may invest in issuers in foreign countries, including countries with developed or emerging markets. These non-U.S. company investments may include American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs). A company is principally engaged in financial services if it owns financial services-related assets that constitute at least 50% of the value of all of its assets, or if it derives at least 50% of its revenues from providing financial services. Companies are classified by GICS based on their principal business activity. Revenue is a key factor in determining a firm’s principal business activity. Companies with their principal business activity in one of the following areas are considered financial services firms: banks, thrifts and mortgage, specialized finance, consumer finance, asset management, custody, investment banking, brokerage, insurance, financial exchanges and data, and mortgage REITs.
Fund Holdings (01/13/17):
| Markel Corp. | MKL | 6.67% |
| Capital One Financial Corp. | COF | 6.12% |
| Loews Corp. | L | 6.03% |
| American Express Co. | AXP | 5.97% |
| Berkshire Hathaway Inc., Class B | BRK B | 5.79% |
| U.S. Bancorp | USB | 5.53% |
| Chubb Ltd. | CB | 5.37% |
| Visa Inc., Class A | V | 5.17% |
| Wells Fargo & Co. | WFC | 4.54% |
| Goldman Sachs Group Inc. | GS | 4.52% |
Index Sector Weightings (01/13/17):
| DFNL (%) | S&P 500 Index (%) | |
| Diversified Financials | 48.4% | 35.9% |
| Insurance | 28.6% | 18.6% |
| Banks | 19.9% | 45.5% |
| Information Technology | 3.1% | 0.0% |
Useful Links:
DFNL Home Page
3.
FUND INFORMATION:
| Symbol: DWLD | Exchange: NASDAQ |
| Name: Davis Select Worldwide ETF | Net Expense Ratio: 0.65% |
FUND OBJECTIVE:
The Davis Select Financial ETF is an actively managed fund which seeks long-term growth of capital.
Davis Selected Advisers, L.P., the Fund’s investment adviser, uses the Davis Investment Discipline to invest the Fund’s portfolio principally in common stocks (including indirect holdings of common stock through depositary receipts) issued by both United States and foreign companies, including countries with developed or emerging markets. The Fund may invest in large, medium or small companies without regard to market capitalization. The Fund will invest significantly (at least 40% of total assets under normal market conditions and at least 30% of total assets if market conditions are not deemed favorable) in issuers
(i) organized or located outside of the U.S.;
(ii) whose primary trading market is located outside the U.S.; or
(iii) doing a substantial amount of business outside the U.S., which the Fund considers to be a company that derives at least 50% of its revenue from business outside the U.S. or has at least 50% of its assets outside the U.S.
Under normal market conditions, the Fund will invest in issuers representing at least three different countries. These non-U.S. company investments may include American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs).
Fund Holdings (01/13/17):
| Name | Ticker | Weighting (%) | Country |
| Alphabet Inc., Class C | GOOG | 6.48% | USA |
| Encana Corp. | ECA | 5.68% | Canada |
| Amazon.com, Inc. | AMZN | 4.95% | USA |
| Apache Corp. | APA | 4.67% | USA |
| Berkshire Hathaway Inc., Class B | BRK B | 4.59% | USA |
| Wells Fargo & Co. | WFC | 4.53% | USA |
| Adient PLC | ADNT | 4.49% | USA |
| Naspers Ltd. – N | NPN SJ | 4.48% | South Africa |
| JPMorgan Chase & Co. | JPM | 3.99% | USA |
| Sul America S.A. | SULA11 BZ | 3.67% | Brazil |
Index Sector Weightings (01/13/17):
| DWLD (%) | MSCI AWCI Index (%) | |
| Consumer Discretionary | 28.0% | 12.2% |
| Financials | 20.5% | 19.1% |
| Information Technology | 17.6% | 15.3% |
| Energy | 15.3% | 7.2% |
| Industrials | 9.8% | 10.6% |
| Materials | 5.5% | 5.4% |
| Health Care | 3.3% | 11.1% |
Regions (01/13/17):
| DWLD (%) | MSCI AWCI Index (%) | |
| United States | 57.3% | 53.5% |
| Emerging Markets | 29.7% | 10.7% |
| Developed Ex US | 13.0% | 35.8% |
Useful Links:
DWLD Home Page
ETFtrack comment:
The 3 ETFs are the first ETFs offered by Davis and among the first true actively-managed equity ETFs in the industry, using a fundamental bottom up approach.
Davis has decades of experience investing in these areas. Each ETF utilizes the Davis Investment Discipline and is a high-conviction, best ideas, benchmark-agnostic portfolio. The ETFs have low expected portfolio turnover and a strategic long-term time investment horizon. Davis ETFs offer investors the traditional benefits of ETFs in general, which include low costs, tax efficiency, intraday liquidity, and transparency.
Davis Advisors is an independent, employee-owned investment management firm founded in 1969 with more than $25 billion in assets under management as of December 31 2016. Since our founding more than 45 years ago, our mission has been to serve our shareholders and to do so with high integrity. We have an unrivaled alignment of interests, with over $2 billion invested side-by-side with clients as of December 31, 2016.