US investment manager Davis Advisors has launched the Davis Select International ETF (DINT US) on Nasdaq Exchange, expanding its line-up of actively managed ETFs.
Chris Davis, portfolio manager and chairman, Davis Advisors.
DINT primarily invests in companies listed outside the US which generate at least 50% of their revenue from business outside the US.
It will typically hold a relatively concentrated portfolio of roughly 30 holdings from across the large, medium or small market capitalizations.
According to Davis Advisors, DINT’s portfolio manager will look for characteristics which foster the creation of long-term value, such as proven management, a durable franchise and business model, and sustainable competitive advantages.
The fund will aim to invest in businesses which are trading at discounts to their intrinsic worth.
The aim is to invest in companies which are trading at discounts to their intrinsic worth and to hold for the long-term (ideally, five years or longer). The portfolio manager may consider selling if the securities’ market price exceeds his estimates of intrinsic value; if the ratio of the risks and rewards of continuing to own the company’s equity securities is no longer attractive; to raise cash to purchase a more attractive investment opportunity; or to satisfy net redemptions or for other purposes.
The benchmark the fund aims to outperform is the MSCI ACWI ex-US Index. This index captures large- and mid-cap representation across 22 of 23 developed markets countries (excluding the US) and 24 emerging markets countries. It has 1,863 constituents and covers approximately 85% of the global equity opportunity set outside the US.
The fund currently has 38.3% exposure to developed market equities and 48.4% in emerging markets. It also has a 13.3% exposure to cash although this may be reflective of a new fund and is likely to decrease over time. These weightings are significantly different from the benchmark which has a 74.3% exposure to developed markets and 25.7% in emerging markets.
China, France and the UK represent the highest exposures by country in the fund, and consumer discretionary (23.3%), industrials (18.8%) and information technology (16.4%) by sector. Naspers (6.5%), Alibaba (6.4%) and Hollysys Automation Technologies (6.0%) are the three largest holdings.
The fund has a net expense ratio of 0.75% and is managed by veteran portfolio manager Danton Goei, who joined Davis Advisors in 1998.
“At Davis, we have made a long-term commitment to providing financial advisors and other investors with choice in how they access our equity strategies: through mutual funds, ETFs, and separately managed accounts (SMAs),” said Chris Davis, Portfolio Manager and Chairman. “Danton Goei has a proven record as an outstanding international stock picker, managing Davis international and global portfolios for well over a decade. This new ETF applies the time-tested Davis Investment Discipline to international investing, and provides our clients with another option as they look to build wealth over the long term.”
Davis Advisors was founded in 1969 and has over $29bn in assets under management (as of 31 December 2017). The firm’s suite of ETFs also includes Davis Select Worldwide ETF (DWLD US), Davis Select US Equity ETF (DUSA US), and Davis Select Financial ETF (DFNL US). Each fund has more than $100m in assets under management and together they have more than $437m in assets.
Davis Advisors entered the ETF space in January 2017.