As many consider various market segments in this thriving bull market, exchange traded fund investors should focus on the financial sector.
On the upcoming webcast, Does the Bull Market Still Have Legs?, Christopher Davis, Chairman and Portfolio Manager of Davis Advisors, will help advisors learn how to find value and to fine tune stock selections, notably in the financial sector as a top area of potential growth.
For example, Davis Advisors recently launched the sector-specific, actively managed Davis Select Financial ETF (NasdaqGM: DFNL) to gain exposure to the U.S. financial sector.
DFNL includes the best-of-breed financial companies. The portfolio holds between 15 and 35 companies, it currently holds 25 positions. The ETF is comprised of diversified financials 43.6%, insurance 28.4%, banks 19.3% and information technology 8.2%, with top holdings including Merkel Corp 6.9%, American Express 6.0% and Loews Corp 5.8%.
The financial sector-specific play is seen as a part of Davis Advisors’ broader focus on opportunities with more cheaply valuated areas of the market, which is particularly relevant given the extend bull run in equities that has pushed valuations toward historic highs.
Additionally, the selective nature of the actively managed ETF would also help investors hone in on cheap but strongly positioned companies that can potentially lead market gains in the environment ahead.
Given their outlook on potential opportunities, Davis Advisors has focused on the financial sector as a “triple play” opportunity, pointing to attractive earnings, multiples and buybacks/dividends.
S&P 500 financial companies are currently trading at the greatest discount to the broader market, reflecting their cheap valuations. Additionally, banks and insurers are also paying out some of the lowest dividends, which leaves them more room to grow their payouts in the years ahead.
Moreover, investors can take a broader approach to the markets through the Davis Select U.S. Equity ETF (NasdaqGM: DUSA), which also includes a heavy focus on the financial sector. DUSA includes high-conviction U.S. large-cap stocks. The portfolio will hold between 15 and 35 companies varying over time, with 21 components currently in the portfolio, along with a large 38.0% tilt toward financials.
Financial advisors who are interested in learning more about opportunities in the financial sector in the current market environment can register for the Tuesday, April 4 webcast here.