A Closer Look At The Davis Select U.S. Equity ETF

Lately we have had some opportunities to cover ETF issuers for the first time in this piece, encompassing funds and fund families that may not be well-known in the ETF landscape simply due to the general “newness” of the funds to the marketplace.

For example, yesterday we spoke about Principal Financial’s foray into the ETF space, and today we cover another well-known Mutual fund, variable annuity, and SMA manager whom has entered the ETF market, Davis Advisors.

Davis is undoubtedly well known to portfolio managers and likely ordinary investors as well since the firm has been around since 1969, is known as a “bottom-up, research-driven” investment firm, and manages more than $25 billion for both individuals and institutions across various account types and strategies. In January of this year, Davis threw their hat into the ETF ring and released three funds, DFNL (Davis Select Financial, Expense Ratio 0.65%, $38 million in AUM), DUSA (Davis Select U.S. Equity, Expense Ratio 0.60%, $32 million in AUM), and DWLD (Davis Select Worldwide, Expense Ratio 0.65%, $30 million in AUM), all of which have respectable asset levels in them presently, given they are only about three months old.

Since Davis is by nature an actively managed shop, it is safe to say that all three of these ETFs join the growing list of actively managed strategies in the marketplace as well, and also demonstrates to us yet another well-known mutual fund/SMA manager entering the ETF party.

Fund literature on DUSA describes the fund’s investment process as follows: “1) Seeks high-conviction, best-of-breed businesses. 2) Benchmark-agnostic. Seeks to outperform the index, not mirror it. 3) Low expected turnover and had a strategic, long term time horizon.” Top holdings in DUSA currently show a heavy weighting to Financials (38% of the portfolio), which is by and far ahead of the next largest sector allocation of Industrials (15%).

Top individual equity holdings, many of which report quarterly earnings in the very near term are: 1) BRK.B (9.67%), 2) AMZN (7.96%), 3) GOOG (7.36%), 4) UTX (6.96%), 5) AXP (6.51%), 6) APA (5.81%), 7) MKL (4.72%), 8) JCI (4.41%), 9) BK (4.39%), and 10) JPM (4.33%).


The Davis Select U.S. Equity ETF (NASDAQ:DUSA) was trading at $20.22 per share on Tuesday afternoon, down $0.14 (-0.69%). Year-to-date, DUSA has gained 0.35%, versus a 4.85% rise in the benchmark S&P 500 index during the same period.

DUSA currently has an ETF Daily News SMART Grade of NR (Not Rated), and is unranked among 108 ETFs in the Large Cap Blend ETFs category.

Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch

paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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