Scharf Investments transformed two of its long-time mutual funds into ETFs — the Scharf ETF (NASDAQ:KAT) and the Scharf Global Opportunities ETF (NASDAQ:GKAT). They launched with around $900 million in combined assets.
KAT alone came on board with about $770 million, while GKAT garnered about $120 million.
KAT’s methodology is consistent with that of its mutual fund forebear: a value, quality-oriented bottom-up approach holding good businesses at discounts to intrinsic value for three to five years.
Its concentrated portfolio as of June consisted of Brookfield Corp (NYSE:BN), Fiserv Inc (NYSE:FI), McKesson Corp (NYSE:MCK), Microsoft Corp (NASDAQ:MSFT), and Occidental Petroleum Corp (NYSE:OXY).
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GKAT applies the same philosophy globally, with historical holdings in Franco-Nevada Corp (NYSE:FNV) and Heineken, as well as U.S. stocks Microsoft and Brookfield.
According to Brian Krawez, President and Senior Portfolio Manager of Scharf Investments Investors don’t have to pay eye-popping prices to own great businesses if they’re willing to seek out the right locations. With historic market concentration in mega-cap growth stocks, KAT and GKAT provide investors with an alternative: a disciplined value strategy backed by Scharf’s over 40-year tradition, he said.
Scharf Investments has established itself through disciplined value investing. Interestingly, the ETF ticker symbols, KAT and GKAT, are a reference to the name of the city because gato means “cat” in Spanish.
With strong investor appetite and a proven record, Scharf looks well-placed to create room in the rapidly crowded active ETF space.
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