Wednesday saw the launch of the actively managed Trenchless Fund ETF (NYSE Arca: RVER), which invests in a fairly narrow portfolio of U.S.-listed equity securities. The fund has an expense ratio of 0.65%.
Managed by River1 Asset Management, the ETF generally holds just 12-30 stocks or ADRs selected because they exhibit “growth at a reasonable price.” The fund’s managers implement a bottom-up approach that screens for valuation, growth exposure, and institutional ownership.
Essentially, the managers looking to screen out companies that are overvalued, unlikely to beat earnings expectations and detrimental levels of shareholder concentration. The managers review the fund’s holdings on an ongoing basis, according to the prospectus.
According to River1’s website, the firm looks to “immediately eliminate legacy index stocks that are unlikely to outperform the market due to low growth, high valuation compared to their growth potential, or bad balance sheets.” It further noted that RVER’s portfolio targets stocks that are more likely to outperform the S&P 500 Index than not and “do well in both bull and bear markets.”
The fund’s initial top holdings include Halliburton Co. at almost 9% of the portfolio, RingCentral Inc. at 8.8%, Expedia Group at 7.9%, Meta Platforms Inc. at 7% and Bumble Inc. at 6.9%.
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