Davis Selected Advisors, which was founded in 1969 and has brought investors mutual funds such as the Davis New York Venture Fund (NYVTX), has filed with the Securities and Exchange Commission to offer three new exchange-traded funds (ETFs). These funds will apply the time-tested disciplines of the Davis funds in the ETF arena. All three will invest solely in stocks and are structured to provide capital appreciation to investors over time. (For more, see: NYVTX: Overview of the Davis New York Venture Fund.)
The Davis Focused US Equity ETF (DAVS) will be constructed to target anywhere from 15 to 35 stocks of large-cap U.S. companies that have market capitalizations of at least $10 billion. The Davis Select Financial ETF (DSFE) will be designed to invest in companies of any size around the globe that fall into the financial services category. Any company that this fund will invest in will be required to produce at least half of the value of their total assets or half of their revenue from financial services such as investments, banking or lending. The Davis Select World Opportunities ETF (DSWO) will also invest globally and can choose companies with any cap weighting. About a third of the fund’s holdings will be invested outside the U.S. at any given time.
Davis’ approach to fund management focuses on companies that can show good management practices and operate using sustainable business models that demonstrate resilience. The fund company will establish an intrinsic value for each of its holdings and then will buy shares of these companies when the fund perceives that they are trading at a discount from this value. The prospectuses of these funds state that Davis places heavy emphasis on evaluating the management of its holdings and favors the selection of individual stocks. No listing exchange was named in the filing, nor did it contain any information about the funds’ expense ratios. (For more, see: Top 4 Mutual Funds from Davis.)