DUSA: Value, Low Volatility Exposure To Weigh On Returns, Hold Rating Maintained

I maintain a neutral stance on the Davis Select U.S. Equity ETF, expecting it to underperform IVV for the rest of 2026. DUSA has modestly outperformed IVV year-to-date despite its low-beta, high-EY portfolio, which I expected to restrain upside capture. Nevertheless, I still anticipate the growth and GARP factors to retake leadership from low volatility and value. With 26 equities in the portfolio, DUSA's GARP metrics remain unappealing, with the PEG ratio at 2.38, an even weaker result than in April.

Today, I would like to present a quarterly update on the Davis Select U.S. Equity ETF (DUSA), an actively managed vehicle with a high-conviction approach I have been persistently skeptical about since July 2023.