Episode summary
DUSA Tops $1B, DRAM Takes Off, Ticker Payday & More
ETF Prime
· · Hosts: Nate Geraci, Simeon Hyman · Guests: Chris Davis, Todd Sohn
Summary
Chris Davis argued that markets are pricing through a remarkable mix of uncertainty and complacency: inflation, rates, geopolitics, and AI disruption are all in play, yet equities remain near highs. He said investors should not treat conflicts like Iran as automatically decisive for portfolios, but he also thinks supply chains, energy spending, and the “normalized price of oil” could be permanently higher than before. On AI, he warned against lumping the “Mag 7” together as if they were one trade, and said investors should think in categories such as winners, enablers, users, insulated businesses, and “Walking Dead” firms vulnerable to disruption.
Davis also laid out the case for his active ETF lineup, especially DUSA, which recently crossed $1 billion in assets. He said the portfolio is concentrated, fundamentally different from the index, and trades at about 14 times earnings versus roughly 19 to 20 times for the Russell 1000 Value. In his view, that discount comes with durable businesses and growth rates that compare favorably with broader benchmarks. He framed active management as a stewardship business, emphasizing alignment, credibility, and a long record.
Todd Sohn then shifted to ETF market structure, saying 2026 has been marked by strong flows, heavy launch activity, and rising trading use of ETFs. He highlighted crowded corners like DRAM, space-themed funds, and leveraged single-stock products, arguing that some of the enthusiasm looks frothy even as the broader ETF industry keeps growing. He also discussed competition for Nasdaq-100 exposure, closures among zombie funds, the oddity of the tanker ETF BWAT’s huge return with little asset gathering, and the Morgan Stanley bitcoin ETF as another sign that crypto remains an important long-term category.
Key takeaways
- Chris Davis said DUSA trades around 14 times earnings, below the Russell 1000 Value and the broader market, while its holdings have grown faster than value benchmarks.
- Davis argued that AI creates both offense and defense risks, so investors should analyze which businesses may benefit, be insulated, or become “Walking Dead” companies.
- Todd Sohn said 2026 ETF flows, launches, and trading volumes are all running hot, with ETFs taking about 40% of March volume.
- Sohn viewed the rapid rise of the Roundhill Memory ETF and the wave of space-themed launches as signs of crowded, speculative corners of the market.
- Sohn said lower fees will likely decide whether new Nasdaq-100 ETFs can take share from QQQ over time.
- Sohn described the Morgan Stanley bitcoin ETF as a long-term branding move into a major asset class rather than a short-term trading play.
Notable quotes
“you have this radical new technology AI that is going to create a lot of disruption to business models to employment data and so on”
“We look for managers that are aligned with their shareholders”
“The the train is full steam ahead”
“there are these corners of little bit of frothiness”
How the episode opens
Everyone is getting in the space pool and this is another one of those corners like okay we've had six or so related space ETFs launched this year I think yes we're building the space economy but it's all about SpaceX. All right, joining me will be Chris Davis, chairman and portfolio manager at Davis Advisors, who currently offers four ETFs, about $2.4 billion in assets. These are traditional actively managed ETFs.
That includes the Davis Select US equity ETF, ticker D USA, which recently crossed over a billion dollars in assets. A very nice milestone for that ETF. And I should note that Davis Advisors overall, we're talking about a $ 31 billion asset manager.
That's across ETFs, mutual funds, SMAs, uh, etc. But Chris has been in the investment management business for nearly 40 years now. Uh, I would say he's definitely a value investor at heart.
Certainly a high conviction value investor. Uh, you can look at Dusa, there's only 26 holdings, just to give you an idea. And so, uh, we're going to have a wide- ranging conversation around value stocks and the current market environment.
We'll obviously take a look at the Davis ETF lineup. And then I also want to talk actively managed ETFs in general. This should be an excellent conversation with again a tremendous all-around market in investing veteran.
Now later I'll be joined by one of my favorite ETF analyst Todd Zone chief ETF strategist at Strategus who's a top ranked macro research firm that works with institutions across the globe. And Todd heads up all of the ETF research and coverage there. Uh, I'm looking forward to this because I have an assortment of random topics that we're going to bat around, including eyesshares and State Street filing for NASDAQ 100 ETFs, which that would finally give Invesco some competition.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- etf assets milestones
- value investing opportunities
- nasdaq-100 etf filings
- memory etf launch
- spot bitcoin etf expansion
Companies and tickers mentioned
- BLK
- STT
- MS
- Davis Advisors
- BlackRock (iShares)
- State Street
- Roundhill
- Morgan Stanley
- Tuttle Capital
- Strategas
Watch the episode
Watch “DUSA Tops $1B, DRAM Takes Off, Ticker Payday & More” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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