The management team looks to durability, adaptability and resiliency of a company for strong competitive advantages, superior business models, attractive financials and superior free cash flows. They also select those with proven, capable management with a track record of good decisions, intelligent capital allocators and alignment of interests. Additionally, the team focuses on discount to true value by calculating owner earnings to arrive at the true value of a company.

As ETFs gain in popularity, traditional actively managed shops are beginning to eye the ETF space to potentially expanded their businesses.

“It is about choice, indeed. That’s the whole reason we got into the ETF business – advisors have asked for it, right. They knew our investment disciple, but they were transitioning their book of business to more fee based, more ETF based, and they wanted something that would give them the exposure to the value that active can have,” Kittsley added.

For more market-related commentary from Tom Lydon and other industry experts, visit our ETF Trends video category.