Davis Select Financial ETF

Davis Select Financial ETF (DFNL) is an actively managed, non-diversified ETF that holds a concentrated group of 15 to 35 financial companies, mostly U.S. banks and insurers, plus some foreign firms. Davis Selected Advisers picks stocks it judges to trade below their worth and aims to hold them for years, with turnover of just 1%. That approach costs more: the 0.61% expense ratio is the highest of nine financial ETFs compared, against a peer average of 0.26%.

• Over the year to Oct 27, 2026, DFNL returned +12.3%, 3rd of 9 among similar funds.
• Its 5-year annualized return was +11.7%.
• In the 2020 COVID crash it fell 44.3% and regained its old high 9.5 months after the low.
• Its worst full calendar year was 2018 (-11.7%); its best was 2021 (+31.3%).
• The deepest fall in its price history was 44.5% (Jan 2, 2020 to Mar 23, 2020), recovered by Jan 12, 2021.

As of Jul 31, 2026, the fund held 34 securities; the ten largest made up 56.3% of assets.

By sector

• Over the three months to Jul 31, 2026, investors withdrew a net $25.4M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -2.02%, +6.80%, +3.40%.

DFNL is actively managed rather than tied to an index. Davis Selected Advisers (Davis Advisors) picks the stocks. Under normal conditions, at least 80% of net assets goes into companies principally engaged in financial services, meaning at least half their assets or revenue come from that work. That includes banks, consumer finance, capital markets, insurance and mortgage REITs (real estate investment trusts that invest in mortgages). The fund can own companies of any size, including in emerging markets, often through depositary receipts: bank-held certificates that represent foreign shares.

Under the Davis Investment Discipline, the managers research and visit companies. They look for proven management, durable franchises and lasting competitive advantages. They aim to purchase these at a discount to intrinsic value, their own estimate of what a business is worth based on cash flows, assets and liabilities. The goal is to hold for five years or longer. They may exit when the price passes that estimate, when risk and reward no longer look attractive, or to fund a better idea. Portfolio turnover was 1%.

Position sizes reflect the managers' judgment, not a formula, and there is no index to rebalance against. As of July 31, 2026, the fund held 34 stocks. The top 10 made up 56.3% of assets, and Capital One alone was 10.5%. U.S. companies were 79.5%, with no derivatives. Because the fund is non-diversified, a single stock can move results noticeably.

• DFNL charges 0.61% a year, versus an average of 0.26% for the similar funds below (9th of 9, cheapest first).
• Of that, 0.55% is the management fee; the rest covers other fund expenses.
• Using the prospectus's standard example, $10,000 invested would cost about $62 in the first year and $762 over 10 years (assuming a 5% annual return).

DFNL is an actively managed fund that holds only 34 financial-sector stocks and once fell 44.5%, so it suits a small position beside a broader core rather than the core itself.

DFNL could add a focused, actively managed bet on financial stocks such as Capital One, U.S. Bancorp and Berkshire Hathaway. It launched in 2017, so it has no 2008 record. Its deepest drop, 44.5%, came in the early-2020 COVID crash, and it recovered only in January 2021. In the 2022 bear market it fell 26.3% and took about 17 months to recover. Its worst calendar year was 2018, at −10.8%. Selling shares in slumps like these would lock in losses. Income is small: a 1.33% yield as of October 27, 2026, paid once a year.

Its 0.61% expense ratio (yearly fee) is higher than that of any of eight similar funds, which average 0.26%. In the SEC's standard $10,000 example, that comes to $62 in the first year and $762 over ten years. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.