After the market pullback, investors are beginning to look to the value strategy and related ETFs in an attempt to select some bargain picks.
“We believe now is the time to be looking at value investing generally…. We feel our value strategy is differentiated among other active managers in the market,” said Emidio Checcone, Portfolio Manager for AdvisorShares DoubleLine Value Equity ETF, at the Charles Schwab IMPACT 2018 conference.
Specifically, the AdvisorShares DoubleLine Value Equity ETF (DBLV) tries to implement a fundamental value strategy. Fundamental value investing targets two opportunity sets which arise when the market temporarily prices the equity of companies below intrinsic value: classic value and quality value common stocks, according to AdvisorShares.
The DoubleLine management team invests in classic value opportunities in low-multiple stocks of companies with temporarily depressed earnings. Additionally, the managers will screen for quality value opportunities in durable or disruptor franchises. They argue that quality value opportunities are usually invisible under a classic value lens.
“The firm has made very good macro calls and has a lot of expertise around interest rates, around the credit cycle, around the dollar, around commodities; and these are all inputs into our models and our processes – value investors, so we think that gives us a tremendous advantage,” Checcone added.
Current top sector weights include financials 24%, healthcare 19%, information technology 10%, energy 10% and communication services 9%. Top holdings include Verizon Communications 4%, JPMorgan Chase & Co 3.1%, US Foods Holding 3.0%, Dollar General 2.9% and Comcast 2.9%.
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