Chris Davis

DAVIS & GOEI: ACTIVELY MANAGED ETF PIONEERS

September 22, 2017

DAVIS & GOEI: ACTIVELY MANAGED ETF PIONEERS

Well over 90% of exchange-traded funds, popularly known as ETFs are based on passive market indexes, but there are a few active managers who have decided to use the ETF structure for actively managed portfolios. One of the pioneers of this innovative approach is third generation value investor, Chris Davis, head of Davis Advisors the parent company of the Davis Funds. In January of 2017, his firm launched three actively managed ETFs reflecting the firm’s nearly five decades of research and investment expertise. They are Davis Select U.S. Equity ETF, symbol DUSA, Davis Select Financial ETF, symbol DFNL and Davis Select Worldwide ETF, symbol DWLD. We asked Davis and fellow Portfolio Manager Danton Goei why they chose to go the active ETF route.

Watch the related WEALTHTRACK episode.

CHRIS DAVIS & DANTON GOEI ON WHERE IN THE WORLD THEY ARE FINDING COMPOUNDING GROWTH AT VALUE PRICES

September 22, 2017

A rare interview with two top global investors: Davis Funds’ Chris Davis and Danton Goei explain where they are finding world-class growth at value prices.


WEALTHTRACK Episode #1414; Originally Broadcast on September 22, 2017


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CHRISTOPHER DAVIS

DANTON GOEI

Consuelo Mack As we all know, stock picking is really out of favor right now.  Index funds have been garnering most of the headlines because of their low costs and the fact that the S&P 500, the most popular stock market index by far with investors, has been outperforming the vast majority of actively managed funds for well over a decade. The giant sucking sound of money leaving traditional mutual funds and pouring into passive index funds has reached an ear splitting crescendo.

If you are a contrarian thinker this almost one directional flood into passive strategies raises some questions. First of all, is beating an index or even being in one the “be-all-end-all” of investing?  Think back to the red hot NASDAQ Composite Index at the peak of the tech bubble in 2000. Funds that didn’t keep up suffered massive outflows. The NASDAQ  then proceeded to decline 78% in less than three years.  Many of the funds investors had abandoned proceeded to outperform that index for years.

At any given moment some index somewhere will be outperforming the average manager, and index for that matter. Another key question is can the herd mentality, which is frequently wrong over multi-year periods, be right this time? Or is there now more value and safety to be found among some active strategies?

This week’s WEALTHTRACK guests believe there is. We’ll be joined by Christopher Davis, a third-generation money manager, Chairman of Davis Advisors and Portfolio Manager of several of the Davis Funds, which have a nearly 50 year history of disciplined value investing. Chris took over its flagship New York Venture Fund in 1997 when his father, Shelby Davis stepped down.

Since its 1969 inception New York Venture has beaten the S&P 500 62% of the time in one year periods, 66% of the time in 5 year increments,  86% in ten year periods and 100% in 20, 30 and 40 years. New York Venture and it’s no load version, Selected American Shares have had a tougher time in recent years. They beat the S&P 500 last year but underperformed it in six of the last ten, although they made money in all but two of those years.

Danton Goei joined New York Venture and Selected American Shares asCo-Manager in 2014. He has been with Davis Advisors for nearly 20 years and singlehandedly runs some of their top performing funds including the Davis Global Fund.  Rated 4-star by Morningstar, Davis Global has beaten its benchmark and category over multiple year periods since its 2004 inception.

I should also add that the Davis Funds are highly regarded for their shareholder friendly policies including reducing expenses and recently introducing actively managed ETFs to give investors more options.

On this week’s show, Davis and Goei will also share their “One Investment” ideas for a long-term portfolio. If you are unable to join us for the program on television, you can watch it on our website, WealthTrack.com, starting over the weekend.  If you’d like to see it earlier, it is available to our PREMIUM subscribers right now.  We also have an EXTRA interview (exclusively on our website) with Davis and Goei about the launch of the Davis Funds’ three actively managed ETFs.

Another viewing option is you can take WEALTHTRACK with you on your commute or travels. You can now find the WEALTHTRACKpodcast on TuneIn, Stitcher, and SoundCloud, as well as iTunes. Find out more on the WEALTHTRACK Podcast page.

As always, thank you for watching!  Have a great weekend and make the week ahead a profitable and productive one.

Best Regards,

Consuelo Mathews Asia

DON’T GET CAUGHT UP IN THE INVESTMENT CRAZE OF THE MOMENT

LONG-TERM CRITERIA

  • Risk-Adjusted Returns
  • Does the fund cushion you during market declines?
  • Inflation-Adjusted Returns – Does it protect your purchasing power?
  • Consistency of Investment Style & Discipline
  • Diversification of Holdings
  • Attention to Costs

No Bookshelf titles this week.

GOEI: JET ENGINE DOMINANCE

  • Safran SA ADR (SAFRY)
  • Price: $25.21 on 9/20/17
  • 52-week range: $16.45 – $25.69

DAVIS: FOUNDER-RUN BANK

  • Capital One Financial Corp (COF)
  • 
Price: 81.82 on 9/20/17
  • 52-week range: $69.49 – $96.92
Amazon.com Inc (AMZN)

AMZN Chart

AMZN data by YCharts

Alphabet Inc A (GOOGL)

GOOGL Chart

GOOGL data by YCharts

Wells Fargo & Co (WFC)

WFC Chart

WFC data by YCharts

Didi Chuxing (Privately owned)

FedEx Corp (FDX) FDX Chart

FDX data by YCharts



ZTO Express (Cayman) Inc ADR (ZTO) ZTO Chart

ZTO data by YCharts



United Technologies Corp (UTX) UTX Chart

UTX data by YCharts



Safran SA ADR (SAFRY) SAFRY Chart

SAFRY data by YCharts



Alibaba Group Holding Ltd ADR (BABA) BABA Chart

BABA data by YCharts


JD.com Inc ADR (JD) JD Chart

JD data by YCharts

Capital One Financial Corp (COF) COF Chart

COF data by YCharts

This transcript will be available soon. More information regarding WEALTHTRACK transcripts can be found here

This is Danton Goei’s first appearance on WEALTHTRACK. Here’s Chirs Davis from the WEALTHTRACK archives:

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DAVIS & GOEI: ACTIVELY MANAGED ETF PIONEERS

Well over 90% of exchange-traded funds, popularly known as ETFs are based on passive market indexes, but there are a few active managers who have decided to use the ETF structure for actively managed portfolios. One of the pioneers of this innovative approach is third generation value investor, Chris Davis, head of Davis Advisors the parent company of the Davis Funds. In January of 2017, his firm launched three actively managed ETFs reflecting the firm’s nearly five decades of research and investment expertise. They are Davis Select U.S. Equity ETF, symbol DUSA, Davis Select Financial ETF, symbol DFNL and Davis Select Worldwide ETF, symbol DWLD. We asked Davis and fellow Portfolio Manager Danton Goei why they chose to go the active ETF route.

DAVIS: GENERATIONAL DIFFERENCE

May 13, 2016

GENERATIONAL DIFFERENCE

Some things change. Some stay the same. Third generation investor Chris Davis is carrying on the family tradition in the Davis Funds with a difference.

Watch the related WEALTHTRACK episode.

DAVIS: COMPOUNDING MACHINES

May 13, 2016

Third generation value investor Chris Davis discusses why unpopular financial stocks can actually be compounding machines. Continue Reading »

CHRIS DAVIS: IT’S ALL IN THE FAMILY

May 9, 2014

Third generation great investor, Chris Davis, shares the investment lessons passed on from his grandfather and father at The Davis Funds including the key concepts of owning businesses not stocks and focusing on long-term value not short-term expansion. Continue Reading »

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