As the bull market marches ahead, opportunities and risks have shifted. Simply owning the market may not be as successful as it has been over the past decade.
On the upcoming webcast, Where are Today’s Opportunities? Using Active ETFs to Find Superior Growth at Low Valuations, Chris Davis, Portfolio Manager and Chairman, Davis Advisors, will discuss why selectivity is critical to uncover long-term investment opportunities. They will highlight how active management, focused on conducting bottom-up, fundamental research, can uncover businesses with superior growth and attractive valuations.
Investors have looked to a time-tested active approach to potentially enhance returns and provide greater stability, especially in times of heightened volatility. For example, the actively managed Davis Select U.S. Equity ETF (NasdaqGM: DUSA), Davis Select Financial ETF (NasdaqGM: DFNL), Davis Select International ETF (NasdaqGM: DINT) and Davis Select Worldwide ETF (NasdaqGM: DWLD) are backed by Davis Advisors’ focuses on long-term opportunities and incorporate the money manager’s judgement experience, high conviction, low turnover, accountability and alignment. The Davis team screens for fundamental characteristics, including cash flows assets and liabilities, and other criteria.
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.
Davis Advisors’ management style largely targets durable businesses with above average margin returns, strong competitive advantages and durability. Companies also have to show strong management that have been in place for over five years as long-term investors can be sure that these are ethical, honest people that will help the business last. The management team will determine valuation or what’s the right price of the company, targeting long-term free cash flow of businesses, owner earnings and how durable the cash is available.
Active managers are also able to exploit market inefficiencies through time arbitrage; intangibles such as management, capital allocation or competitive moats; sector inefficiencies, accounting arbitrage; business bias versus profession; and geographic inefficiencies, like knowledge of foreign markets.
Financial advisors who are interested in learning more about long-term investment opportunities can register for the Thursday, October 10 webcast here.