GuruFocus is excited to announce that the Guru Favorite Stocks ETF (GFGF, Financial) began trading on Dec. 16, 2021. The objective of the ETF is to seek long-term capital appreciation by investing in high quality U.S. companies that are favored by prominent long-term investors (“Gurus”) and trade at reasonable valuations.
The stocks in GFGF are selected in a two-step process. In the first step, GuruFocus generates a universe of U.S.-listed securities based on the portfolios of Gurus who tend to invest in high quality stocks and have achieved market beating records over the long term. In the second step, GuruFocus selects the stocks that meet the quality and valuation requirements for GFGF.
“We have been observing the performance of this strategy for 16 years and we are very pleased with the results,” said Dr. Charlie Tian, founder of GuruFocus and the portfolio manager of GFGF. “In an inflationary environment, high quality companies, that is those with pricing power and high return on invested capital, that we believe have the potential to continue to do better. The two-step process helps us to find the companies with above average quality, and aims to reduce the chances of making mistakes.”
“GuruFocus has been in the investment research business for more than 16 years and developed many model portfolios and investment strategies. By investing in this fully transparent active ETF, investors may benefit further from being able to access the research in GuruFocus. Combining the expertise of our investment research with the benefits of the ETF vehicle – including tax efficiency, transparency and trading flexibility – we are pleased to be able to provide our clients with compelling investment solutions,” said Dr. Tian.
Dr. Tian further added, “I have been investing my money in this strategy over the past few years. But the problem is that every time I rebalanced the portfolio, I had to pay a large amount of capital gains tax. With GFGF structured as an ETF, Investors may be able to defer the capital gains tax unless the ETF is sold (I have a vested interest with the) majority of my liquid assets in GFGF.” GFGF is being launched with $40 million in seed capital.
To learn more about GFGF, please visit GuruFocusETF.com. You can purchase GFGF in your brokerage accounts from brokerage firms such as Fidelity, Interactive Brokers, TDAmeritrade, Charles Schwab, etc.
About GuruFocus Investments, LLC
GuruFocus Investments, LLC is an investment adviser registered with the SEC. GuruFocus Investments, LLC is organized as a Delaware limited liability company with its principal offices located at 1309 West 15th Street, Suite 370, Plano, TX 75075. GuruFocus Investments, LLC is responsible for recommending the investments for the Fund, subject to the overall supervision and oversight of the Adviser and the Board.
About GuruFocus.com, LLC
GuruFocus.com, LLC is an affiliate advisor of GuruFocus Investments, LLC. GuruFocus.com, LLC operates the investment website GuruFocus.com. GuruFocus.com is one of the largest value investing website available. It has extensive collections of data and tools for investors who pick stocks based on the performance and valuation of the underlying business. GuruFocus also provides in-depth data and analysis on the portfolios and trading histories of institutional investors and company executives, as well as macro-economic data, total market valuations, industry/sector data and more to help investors gain a better understanding of market cycles and overall valuations. GuruFocus also publishes a variety of financial news, investing analysis and opinions from market experts.
GuruFocus.com was founded in 2004 by Charlie Tian, Ph.D., on the philosophy that investors would make fewer mistakes investing if they were to select stocks from the ones that have been researched by the best investors in the world.
Investments involve risk. Principal loss is possible. The Fund is a new ETF with limited operating history to evaluate. The Fund is actively managed and may not meet its investment objective based on the Adviser’s success or failure to implement investment strategies for the Fund.
ETFs may trade at a premium or discount to their net asset value. Redemptions are limited and often brokerage commissions are charged on each trade which may reduce returns.
The Sub-Adviser considers a Guru to be a prominent long-term investor and must have a long-term, publicly available, track record of at least ten years. In addition, the Guru must follow an investment strategy of investing in companies that the Guru considers to be high-quality. Securities recommended for the Fund is based on publicly available information, however, it may not always reflect real-time portfolio holdings. As a result, the Fund may purchase or retain securities that are no longer favored by the Gurus, which may hurt the Fund’s performance.
The Fund may be subject to quantitative security selection risk. Data for some companies may be less available or current and could perform differently from the financial markets as a whole. Because the Fund’s portfolio is reconstituted on a semi-annual basis, the Fund’s market exposure may be affected by significant market movements following a reconstitution or may lag a significant change in the market’s direction. Such lags between market performance and changes to the Fund’s exposure may result in significant underperformance relative to the market.
The fund may invest in medium-capitalization companies which may be subject to greater risks than large company stocks due to limited resources and inventory as well as more sensitivity to adverse market conditions.
In general, ETFs can be tax efficient. ETFs are subject to capital gains tax and taxation of dividend income. However, ETFs are structured in such a manner that taxes are generally minimized for the holder of the ETF. An ETF manager accommodates investment inflows and outflows by creating or redeeming “creation units,” which are baskets of assets. As a result, the investor usually is not exposed to capital gains on any individual security in the underlying portfolio. However, capital gains tax may be incurred by the investor after the ETF is sold.
The Funds' investment objectives, risks, charges, and expenses must be considered carefully before investing. Click here for the GFGF Prospectus, and GFGF SAI. All fund documents can be found at https://GuruFocusETF.com/. A free hardcopy of any prospectus may be obtained by calling +1.215.882.9983. Read carefully before investing.
The Funds are distributed by Quasar Distributors, LLC. The Funds' investment advisor is Empowered Funds, LLC which is doing business as Alpha Architect.