(DFNL) Davis Select Financial - Ratings and Ratios

The Davis Select Financial ETF (BATS:DFNL) is an actively managed exchange-traded fund that focuses on the financial services sector, employing the Davis Investment Discipline to guide its investment decisions. Under normal market conditions, the fund allocates at least 80% of its net assets, plus any borrowings for investment purposes, to securities of companies primarily operating within this sector.

The funds investment strategy is characterized by a concentrated portfolio, typically holding between 15 and 35 companies. It predominantly invests in common stocks, with a flexible approach to market capitalization, allowing investments in large, medium, or small-cap companies. Additionally, the fund has a global reach, investing in issuers from foreign countries, including both developed and emerging markets, which further diversifies its portfolio. Being non-diversified, the fund may exhibit higher volatility compared to its more diversified counterparts.

From a technical standpoint, the current price of $40.68 is near its 52-week high of $40.96, indicating a strong upward trend. The short-term and medium-term moving averages (SMA20 at $38.28 and SMA50 at $38.35) are both below the current price, suggesting a bullish signal. Furthermore, the long-term SMA200 at $37.75 is also below the current price, reinforcing the positive trend. The Average True Range (ATR) of 1.01, representing a 2.49% daily volatility, indicates moderate daily price swings.

Considering the fundamental aspect, the funds Assets Under Management (AUM) stand at $251.26 million. While not exceptionally large, this size allows for a reasonable level of liquidity and diversification within its concentrated portfolio.

Forecasting the future performance of DFNL involves analyzing both its technical and fundamental data. Given the current prices proximity to its 52-week high and the bullish signals from the moving averages, theres a potential for further upside, albeit potentially at a slower pace due to the current valuation. The financial services sectors performance will be a crucial driver, influenced by factors such as interest rates, regulatory changes, and the overall economic landscape. If the sector continues to perform well, supported by favorable macroeconomic conditions, DFNL could potentially reach new highs, possibly testing resistance levels beyond $40.96. However, a downturn in the financial sector or a significant market correction could lead to a decline, potentially finding support around the SMA50 or SMA200 levels. Therefore, investors should closely monitor sector trends and macroeconomic indicators.