How to Avoid Portfolio Isolationism
Capitalizing on developing trends happening in international equity markets is critical for building long-term wealth, yet many investors are under-allocated to international equities.
On the upcoming webcast on Tuesday, Jan. 30 (available live and on demand for CE Credit), Avoiding Portfolio Isolationism, Christopher Davis, Chairman and Portfolio Manager of Davis Advisors, and Danton Goei, Portfolio Manager of Davis Advisors, will outline the current global market environment and highlight the various worldwide opportunities that may help investors diversify portfolios and potentially improve returns.
For instance, the Davis Select Worldwide ETF (NasdaqGM: DWLD), which is managed by Goei, focuses on long-term global opportunities that incorporate Davis Advisors’ judgement experience, high conviction, low turnover, accountability and alignment.
“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,” according to Davis Advisors.
Davis Advisors conducts extensive research to identify businesses that possess characteristics that they believe foster the creation of long-term value, such as proven management, durable franchise and business model, and sustainable competitive advantages, along with focusing on those that are trading at discounts to their intrinsic value. Specifically, the Davis team will also screen for fundamental characteristics, including cash flows assets and liabilities, and other criteria.
Davis focuses on 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. Additionally, 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.
DWLD currently holds a large tilt toward consumer discretionary 28.4%, followed by financials 20.5% and information technology 20.4%. Top component holdings include Alphabet 6.6%, Naspers 6.0%, Amazon 5.4%, Alibabya Group 4.6% and Wells Fargo 4.2%.
Financial advisors who are interested in learning more about international markets can register for the Tuesday, January 30 webcast here.