Miller Value Partners today rolled out an actively managed ETF with a concentrated portfolio of stocks that the fund’s managers see as undervalued. The Miller Value Partners Appreciation ETF (NYSE Arca: MVPA) seeks out companies with overlooked “intrinsic value.”
The fund has an expense ratio of 0.60%. MVPA’s managers select 20-40 stocks based on a wide range of data including free cash flow projections; asset values; economic and industry data; and analyst opinions, among other information. The prospectus further notes that the fund can hold stocks of any size that may not even be included in the S&P 500, pointing its potential to maintain a high “active share.”
In fact, the document highlights that MVPA’s managers looks to select companies they believe have a high probability of beating the S&P 500’s performance over the long-term.
A Good Environment for Value Stocks
“This is the best environment in my 15 years of doing this for actively managed value funds,” said Miller Value Chief Investment Officer Bill Miller IV in a recent video posted on his firm’s site in December. Miller is also the manager of MVPA.
“The reason being: Capital has a cost again,” he added. Miller further noted that the preceding decade was “unique” and labeled the current environment for value investing as “compelling.”
Certainly, with interest rates on the rise, the recent period of easy money is at an end. And that tends to be good for value stocks.
MVPA’s portfolio at launch includes 26 companies. Its top holdings include Builders FirstSource with a weighting of nearly 12%; Crocs Inc. at 8%; MicroStrategy at 7.6%; Encore Wire Corp. at 7.1% and Centene Corp. at 6.1%.
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