Davis Select US Equity ETF

DUSA

Market cap $1.04B

The Davis Select U.S. Equity ETF (DUSA) officially surpassed $1 billion in assets under management, marking a significant milestone for the active ETF.  This achievement comes as the fund celebrates nine years of navigating the U.S. large-cap landscape with a high-conviction, benchmark-agnostic approach.

NEW YORK--(BUSINESS WIRE)--Davis Advisors, announced that the Davis Select U.S. Equity ETF (DUSA) has surpassed $1 billion in assets under management.

DUSA offers a high conviction, value-focused approach with a concentrated portfolio, providing lower correlation and potential shelter if markets turn volatile. The fund trades at a modest valuation with a P/E below both the broader market and most peers, making it attractive for value-oriented investors. DUSA has delivered strong risk-adjusted returns and outperformed most value peers, though it trails the very top performers.

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DUSA is an actively managed vehicle, placing bets on just a handful of high-quality U.S. and international stocks. In the current iteration, there are 26 equities in its portfolio, with most net assets allocated to financials. Its bet on value in tech via INTC has backfired. The stock has been the key detractor from its performance, potentially leading to its inability to beat IVV in 2024.

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Davis Select U.S. Equity ETF is an actively managed ETF with a portfolio of only 26 companies and a 0.61% expense ratio. The DUSA ETF is overweight in its top holdings and in financials. DUSA has underperformed the S&P 500 and some passively managed growth and quality ETFs.

DUSA is a high cost, high conviction ETF benchmarked against the S&P 500 Index. It has a 0.61% expense ratio and $521 million in assets under management. Recent results for active large-cap blend funds are encouraging, but for the most part, active funds have lagged passive funds over the last five years. DUSA is no different. Despite emphasizing how different DUSA is compared to broad market funds like SPY, ironically, its recent success is because it's overweighted mega-caps like Meta Platforms, Amazon, and Alphabet.

DUSA is an actively managed vehicle offering exposure to an ultra-minimalist equity portfolio calibrated using sophisticated methods based on the Davis Investment Discipline. It seems DUSA may have finally hit its stride after years of underperformance, as it beat IVV in 2023, with strong momentum lasting into 2024. However, while not being bearish and appreciating its improvements on the growth factor front, I would prefer to maintain a more neutral opinion.