Distillate US Fundamental Stability & Value (DSTL)DSTL

ETF Distillate US Fundamental Stability & Value Summary

Profile:

ETF Distillate US Fundamental Stability & Value (DSTL) is an actively managed ETF that focuses on investing in US large-cap stocks with strong fundamentals, value characteristics, and low volatility. It employs a quantitative approach to identify companies with a history of consistent earnings growth, strong balance sheets, and attractive valuations. DSTL primarily invests in the following sectors: Technology, Healthcare, Financials, Consumer Discretionary, and Industrials.

Objective:

The primary investment goal of DSTL is to provide investors with long-term capital appreciation and income by investing in a portfolio of high-quality, fundamentally sound US large-cap stocks.

Issuer:

DSTL is issued and managed by Distillate Funds, LLC, a relatively new asset management firm founded in 2019. Despite its young age, Distillate Funds has established a strong reputation for its innovative and quantitative investment strategies. The firm's leadership team consists of experienced professionals with extensive backgrounds in quantitative analysis, portfolio management, and financial markets.

Market Share:

DSTL occupies a niche market within the large-cap value ETF space. Its market share is relatively small compared to established large-cap value ETFs, but it has experienced steady growth in assets under management since its inception.

Total Net Assets:

As of November 2023, DSTL has approximately $500 million in total net assets.

Moat:

DSTL's competitive advantage lies in its unique investment approach. The ETF utilizes a proprietary quantitative model that combines fundamental analysis with volatility optimization to identify undervalued stocks with strong growth potential. This approach allows DSTL to potentially outperform traditional value ETFs by capturing alpha through stock selection and volatility management.

Financial Performance:

DSTL has generated strong historical returns since its inception in 2020. The ETF has outperformed the S&P 500 index and its benchmark, the Russell 1000 Value Index, over various time periods.

Growth Trajectory:

DSTL's growth trajectory appears positive. The increasing demand for actively managed, value-oriented investment strategies and Distillate Funds' growing reputation could contribute to DSTL's continued growth in assets and market share.

Liquidity:

DSTL has a relatively high average trading volume, indicating good liquidity and ease of buying and selling shares. The bid-ask spread is also tight, implying low transaction costs.

Market Dynamics:

The market environment for DSTL is influenced by factors such as economic growth, interest rates, and investor sentiment towards value investing. A strong economy and low interest rates typically favor value stocks, while rising rates and economic uncertainty can lead to underperformance.

Competitors:

Key competitors in DSTL's space include iShares S&P 500 Value ETF (IVE), Vanguard Value ETF (VTV), and Schwab U.S. Large-Cap Value ETF (SCHV).

Expense Ratio:

DSTL's expense ratio is 0.59%, which is slightly higher than some of its competitors but still considered competitive within the actively managed ETF category.

Investment approach and strategy:

DSTL actively manages its portfolio to select stocks based on their fundamental characteristics and volatility profiles. The ETF's composition includes a diversified mix of large-cap stocks across various sectors, with a focus on value and stability.

Key Points:

• Actively managed ETF focused on US large-cap value stocks.
• Utilizes a quantitative model to identify undervalued stocks with strong growth potential.
• Strong historical performance and potential for continued growth.
• Relatively high liquidity and tight bid-ask spread.
• Competitive expense ratio.

Risks:

• Market risk: DSTL's performance is subject to market fluctuations and could underperform during periods of economic uncertainty or market downturns.
• Volatility risk: The ETF's active management and focus on value stocks could lead to higher volatility compared to passively managed broad market ETFs.
• Management risk: The ETF's performance is dependent on the effectiveness of Distillate Funds' investment strategy and the experience of its management team.

Who Should Consider Investing:

DSTL is suitable for investors seeking long-term capital appreciation and income through exposure to high-quality, value-oriented US large-cap stocks. Investors should have a moderate to high risk tolerance and a long-term investment horizon.

Fundamental Rating Based on AI:

Based on an AI-based analysis considering financial health, market position, and future prospects, DSTL receives a fundamental rating of 7 out of 10. The rating is supported by its strong historical performance, experienced management team, and unique investment approach. However, the relatively small market share and young age of the issuing company introduce some uncertainties.

Resources and Disclaimers:

This analysis is based on information from the following sources:

• ETF Distillate US Fundamental Stability & Value website: https://www.distillatefunds.com/dstl
• Morningstar: https://www.morningstar.com/etfs/arcx/dstl
• ETF Database: https://etfdb.com/etf/dstl/

This information is intended for educational purposes only and should not be considered financial advice. Investing involves risk, and you should carefully consider your investment objectives, risk tolerance, and financial circumstances before making any investment decisions.