DWLD Overview

  • High-conviction, benchmark-agnostic. Invests in U.S. and abroad. Low expected turnover and strategic long-term time horizon
  • Benefits of a traditional ETF: low costs, tax efficiency, ease of trading, and transparency
  • Seeks durable, well-managed businesses with competitive advantages, selling at a discount to true value
  • An actively managed equity ETF offered by a manager with decades of experience investing in global equities.

Fund Details1

Total Net Assets ($M) $50.0
Number of Holdings 36
Expense Ratio (gross/net)2 0.68%/0.65%

Firm Overview1

  • Independent, employee-owned investment manager since 1969
  • Bottom-up, research-driven investment approach
  • Over $27 billion in AUM
  • Over $2 billion invested alongside our clients

Experienced Management1

Danton G. Goei

Danton G. Goei is a portfolio manager for the Davis Select US Equity ETF and Select Worldwide ETF. Mr. Goei joined Davis Advisors in 1998. He speaks multiple languages and has lived in Europe, Asia and currently resides in New York City.

Vast Opportunities, Selectivity is Critical

The global investment landscape offers investors tremendous opportunities. Separating winners from losers requires selectivity, research rigor and sound judgment.

At Davis, we place great importance on the resiliency and adaptability of our companies. We look for businesses with strong balance sheets, durable growth and skillful management. Our holdings reflect where we are opportunistically finding investments around the world.

In the United States and other developed markets, we own some of the most globally diverse multinational companies with strong long-term growth prospects and deep competitive moats. We invest in leading businesses where we believe profit margins and earnings have room to expand, yet are selling at a discount to true value.

Emerging markets offer attractive values although each country has different opportunities and risks. For example, while the overall Chinese stock market has languished, we have focused on the rapidly growing consumer services sector while avoiding the weak industrial and manufacturing sectors.

Given the quality and valuation of the companies in DWLD, we believe the portfolio is well positioned to grow shareholder wealth over the long-term.

Portfolio Update as of 6/30/17

Investment opportunities include leading U.S. businesses, consumer services businesses in emerging markets and diverse multinationals.

Portfolio Holding Investment Rationale Portfolio Weight (%) Benchmark Weight (%)
Alphabet
(U.S.)
Global leader in online search, parent company of Google, has generated $25 billion in free cash flow. Beneficiary of growth in online advertising & proliferation of mobile devices worldwide. 6.63 1.35
Naspers
(South Africa)
Media conglomerate with $90 billion market cap. Owns largest pay TV provider in Africa and one of China’s largest Internet portals. Currently trading at significant discount to sum-of-the-parts. 4.90 0.21
Amazon.com
(U.S.)
Global market leader in on-line retail and cloud computing services with revenues of $136 billion growing at double-digit rates. 4.83 0.95
Alibaba Holdings
(China)
Largest e-commerce business in China serving the retail, advertising and financial services industries, among others. Growing revenues at over 30%. 4.08 0.38
Encana
(Canada)
Exploration and production company with the potential for double-digit production growth over next 3-5 five years. Owns decades of low-cost reserves. 3.31 0.02
United Technologies
(U.S.)
Largest global aerospace supplier (Pratt & Whitney). #1 market share in heating, ventilation and air conditioning (Carrier) and elevators (Otis). 3.07 0.23
Axalta Coating Systems
(U.S.)
An out-of-the-spotlight business that is a leader in paint coatings serving the building, industrial and auto industries, among others. Grew net income 40% over the last three years. 2.86 0.02
Safran
(France)
Through its joint venture with GE, Safran is one of the world’s leading manufacturers of narrow body airplane engines . Rise in passenger miles flown globally and transition to new engine platform should drive long-term growth. 2.63 0.07
TAL Education
(China)
One of China’s largest private education services. Provides after-school tutoring and classes for students of all age groups. return on equity of over 21% and has nearly doubled revenues over the last three years. 2.22 0.01
Lafarge Holcim
(Switzerland)
#1 globally in cement and aggregates with a deep competitive moat and strong capital allocation discipline. Operates in 80 countries. Strong emerging markets presence. 2.17 0.06

Regions as of 6/30/17

Region Fund (%) Index (%)
United States 54.7% 52.6%
Emerging Markets 34.6% 11.3%
Developed Markets (ex-US) 10.7% 36.1%

Davis Actively Managed Equity ETFs

Davis ETFs are managed using the Davis Investment Discipline. They are high-conviction, benchmark-agnostic portfolios with low expected turnover and a strategic long-term time horizon. 

Davis ETFs offer investors the benefits associated with traditional ETFs, including low costs, tax efficiency, ease of trading, and transparency.

Ticker Expense Ratio2 (%)(gross/net) Holdings1 Performance Benchmark Portfolio Managers
Davis Select Worldwide ETF DWLD 0.68/0.65 36 MSCI ACWI Danton Goei
Davis Select Financial ETF DFNL 0.66/0.65 26 S&P 500 Financials Chris Davis
Davis Select US Equity ETF DUSA 0.66/0.60 21 S&P 500 Chris Davis,
Danton Goei

Wisdom of Great Investors

“The function of economic forecasting is to make astrology look respectable”

John Kenneth Galbraith,
Economist and Author

Learn More

This report includes candid statements and observations regarding investment strategies, individual securities, and economic and market conditions; however, there is no guarantee that these statements, opinions or forecasts will prove to be correct. Equity markets are volatile and an investor may lose money. Past performance is not a guarantee of future results.

1

As of June 30, 2017.

2

Davis Selected Advisers, L.P. has contractually agreed to waive fees and/or reimburse the Funds’ expenses to the extent necessary to cap total annual fund operating expenses until March 1, 2018. After that date, there is no assurance that the Adviser will continue to cap expenses. The expense cap cannot be terminated prior to that date, without the consent of the Board of Trustees.

Individual securities are discussed in this piece. While we believe we have a reasonable basis for our appraisals and we have confidence in our opinions, actual results may differ materially from those we anticipate. The return of a security to the Fund will vary based on weighting and timing of purchase. This is not a recommendation to buy, sell or hold any specific security. Past performance is not a guarantee of future results.

This report is authorized for use by existing shareholders. A current Davis Fundamental ETF Trust prospectus must accompany or precede this material if it is distributed to prospective shareholders. You should carefully consider the Fund’s investment objective, risks, fees, and expenses before investing. Read the prospectus carefully before you invest or send money.

Shares of Davis Fundamental ETF Trust are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. There can be no guarantee that an active trading market for ETF shares will develop or be maintained, or that their listing will continue or remain unchanged. Buying or selling ETF shares on an exchange may require the payment of brokerage commissions and frequent trading may incur brokerage costs that detract significantly from investment returns.

Objective and Risks. Davis Select U.S. Equity ETF’s investment objective is long-term capital growth and capital preservation. The Fund invests primarily in equity securities issued by large companies with market capitalizations of at least $10 billion. Davis Select Financial ETF’s investment objective is long-term growth of capital. There can be no assurance that the Fund will achieve its objective. Under normal circumstances the Fund invests at least 80% of its net assets, plus any borrowing for investment purposes, in securities issued by companies principally engaged in the financial services sector. Davis Select Worldwide ETF’s investment objective is long-term growth of capital. There can be no assurance that the Funds will achieve their objectives.

Some important risks of an investment in the Funds are: authorized participant concentration risk: to the extent that Authorized Participants exit the business or are unable or unwilling to proceed with creation and/or redemption orders with respect to the Fund and no other Authorized Participant is able to step forward to create or redeem Creation Units, Fund shares may trade at a discount to NAV and could face delisting; common stock risk; credit risk: The issuer of a fixed income security (potentially even the U.S. Government) may be unable to make timely payments of interest and principal; depositary receipts risk: depositary receipts involve higher expenses and may trade at a discount (or premium) to the underlying security; emerging market risk: securities of issuers in emerging and developing markets may present risks not found in more mature markets; exchange-traded fund risk: the Fund is subject to the risks of owning the underlying securities as well as the risks of owning an exchange-traded fund generally; fees and expenses risk; financial services risk; focused portfolio risk: investing in a limited number of companies causes changes in the value of a single security to have a more significant effect on the value of the Fund’s total portfolio; foreign country risk; foreign currency risk; headline risk; interest rate sensitivity risk: interest rates may have a powerful influence on the earnings of financial institutions; intraday indicative value risk: the Fund’s INAV agent intends to disseminate the approximate per share value of the Fund’s published basket of portfolio securities every 15 seconds. The IIV should not be viewed as a ‘‘real-time’’ update of the NAV per share of the Fund because the IIV may not be calculated in the same manner as the NAV, the calculation of NAV may be subject to fair valuation at different prices, the IIV does not take into account Fund expenses, and the IIV calculations are based on local market prices and may not reflect events that occur subsequent to the local market’s close; large-capitalization companies risk; manager risk; market trading risk: includes the possibility of an inactive market for Fund shares, losses from trading in secondary markets, periods of high volatility, and disruptions in the creation/redemption process. ONE OR MORE OF THESE FACTORS, AMONG OTHERS, COULD LEAD TO THE FUND’S SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV; mid- and small-capitalization companies risk; and stock market risk. See the prospectus for a complete description of the principal risks.

The information provided in this material should not be considered a recommendation to buy, sell or hold any particular security.

As of June 30, 2017, the top ten holdings of Davis Select U.S. Equity ETF were: Berkshire Hathaway Inc: 9.51%;Amazon.com Inc: 8.40%; Alphabet Inc: 7.80%;United Technologies Corp: 7.33%;American Express Co: 6.71%; Apache Corp: 5.24%; Bank of New York Mellon Corp:4.59%;Markel Corp: 4.56%; UnitedHealth Group Inc: 4.54%; Capital One Financial Corp: 4.53%

As of June 30, 2017, the top ten holdings of Davis Select Financial ETF were: American Express Co: 6.12%; Markel Corp: 5.88%; Berkshire Hathaway Inc: 5.51%; Capital One Financial Corp: 5.17%; Loews Corp: 5.09%; U.S. Bancorp: 5.05%; Chubb Ltd: 4.96%; Visa Inc: 4.85%; Bank of New York Mellon Corp: 4.46%; JPMorgan Chase & Co: 4.43%

As of June 30, 2017, the top ten holdings of Davis Select Worldwide ETF were: Alphabet Inc: 6.63%; Naspers Ltd: 4.92%; Amazon.com Inc: 4.79%; Wells Fargo & Co: 4.62%; Berkshire Hathaway Inc: 4.16%; Adient PLC: 4.11%; Alibaba Group Holding Ltd: 4.07%; JD.com Inc: 4.07%; Apache Corp: 4.06%; JPMorgan Chase & Co: 3.74%

Davis Fundamental ETF Trust has adopted a Portfolio Holdings Disclosure policy that governs the release of non-public portfolio holding information. This policy is described in the prospectus. Holding percentages are subject to change. Visit davisetfs.com or call 800-279-0279 for the most current public portfolio holdings information.

Price/Earnings (P/E) Ratio is the weighted average of the price/earnings ratios of the stocks in a portfolio. The P/E ratio of a stock is calculated by dividing the current price of the stock by its trailing 12 months’ earnings per share. Portfolio totals are computed using an inverse harmonic methodology.

Return on equity is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested.

Free cash flow is a measure of a company’s financial performance, calculated as operating cash flow minus capital expenditures.

John Kenneth Galbraith is not associated in any way with Davis Selected Advisers, Davis Advisors or their affiliates.

We gather our index data from a combination of reputable sources, including, but not limited to, Thomson Financial, Lipper and index websites.

The S&P 500® Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The Index is adjusted for dividends, weighted towards stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks. The S&P 500 Financials is a capitalization-weighted index that tracks the companies in the financial sector as a subset of the S&P 500® Index. The MSCI ACWI® (All Country World Index) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets throughout the world. The Index includes reinvestment of dividends, net foreign withholding taxes.

Investments cannot be made directly in an index.

Shares of the Davis Fundamental ETF Trust are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested.

Distributor, Foreside Fund Services, LLC
800-279-0279, davisetfs.com