Kovitz Core Equity ETF (EQTY) seeks to provide long-term capital appreciation through an actively managed portfolio of U.S. equity securities. The fund focuses on high-quality companies with sustainable competitive advantages, strong management teams, and attractive risk-adjusted return potential across all market capitalizations.
How It Works
EQTY employs an active, fundamental research-driven approach where portfolio managers select 25-35 concentrated holdings based on proprietary analysis of business quality, valuation, and growth prospects. The fund maintains a benchmark-agnostic strategy with no sector or size constraints, allowing significant position sizing flexibility. Rebalancing occurs opportunistically based on market conditions and individual security analysis rather than on a fixed schedule.
Key Features
- Concentrated portfolio of 25-35 high-conviction positions allows for meaningful outperformance potential versus diversified index funds
- Zero expense ratio structure makes it one of the most cost-effective actively managed equity ETFs available
- Benchmark-agnostic approach enables investment across all market caps and sectors without style box constraints
Risks
- This ETF can lose significant value due to concentrated holdings—poor performance from top positions could severely impact returns
- Active management risk means the fund may underperform passive index alternatives despite higher expected returns from stock selection
- Broad equity market downturns could cause 30-50% declines during severe bear markets, amplified by the concentrated portfolio structure
Who Should Own This
Best suited for investors with 5+ year time horizons seeking active equity management and high risk tolerance for concentrated positions. Works as a satellite holding representing 10-25% of equity allocation for those wanting professional stock selection. Appropriate for investors comfortable with benchmark-relative volatility in exchange for outperformance potential.