OWN targets companies where executives and directors have significant skin in the game, betting that insider ownership aligns management incentives with shareholder returns. The fund isolates the 100 U.S. stocks with the highest percentage of shares held by company insiders.
How It Works
The ETF screens the U.S. equity universe for companies where insiders own the largest percentage of outstanding shares, then equal-weights the top 100. This approach captures founder-led companies, family businesses, and firms where management has doubled down on their own stock. The portfolio rebalances quarterly to maintain exposure to the most insider-aligned companies while avoiding concentration in any single name.
Key Features
- Captures companies where management eats their own cooking, averaging 20-40% insider ownership vs 2% for the S&P 500
- Equal-weighting prevents any single founder-led company from dominating returns
- Includes both growth stories and value plays united by high insider commitment
Risks
- Heavy small and mid-cap exposure means 30-50% higher volatility than large-cap indices during market stress
- Insider ownership can entrench poor management — high ownership doesn't guarantee good decisions
- Limited liquidity in underlying holdings could create 2-3% tracking error during volatile markets
Who Should Own This
Best suited for investors who believe aligned incentives drive outperformance and can stomach small-cap volatility. Works as a 5-10% satellite holding for those wanting exposure to owner-operated businesses without picking individual stocks. Patient investors with 3+ year horizons will benefit most from the ownership alignment thesis.