Scharf Global Opportunity ETF (GKAT)

Overview

GKAT is an investment strategy that primarily targets a portfolio of 25 to 40 carefully selected stocks, aiming for strong long-term appreciation potential while minimizing downside risks. The strategy emphasizes the identification of securities that exhibit low valuations accompanied by favorable earnings growth, cash flow increases, and improvements in book value. This investment philosophy is guided by five fundamental principles: maintaining low valuation, securing discounts to fair value, allowing for investment flexibility, ensuring a focused investment approach, and adopting a long-term perspective.

The portfolio comprises a diverse range of investment types, including common and preferred stocks, rights, warrants, special situations, as well as American Depositary Receipts (ADRs), European Depositary Receipts (EDRs), and Global Depositary Receipts (GDRs). Notably, a minimum of 40% of the assets within the fund are allocated to non-US securities, thereby providing international diversification. Furthermore, GKAT allows for the inclusion of fixed-income securities and Exchange-Traded Funds (ETFs), with limitations of up to 30%. In instances where market conditions necessitate, the strategy may also fully transition into cash or short-term instruments, ensuring liquidity or adopting a defensive posture. Securities are routinely re-evaluated and sold when they no longer present attractive upside potential or when they fall short of the defined valuation and growth criteria.

On August 25, 2025, GKAT made a strategic transition from a mutual fund structure to an Exchange-Traded Fund (ETF) format, commencing this new journey with an asset base of $30.55 million.

Products and Services

• Stocks: GKAT invests in both common and preferred stocks, focusing on those with strong long-term appreciation potential. The selection process is based on rigorous analysis to ensure the stocks have low valuations and promising growth trajectories.
• Rights and Warrants: The fund incorporates rights and warrants as part of its investment strategy, offering the potential to purchase additional shares at predetermined prices, which can benefit the portfolio when the underlying stock prices increase.
• Special Situations: GKAT seeks investment opportunities in special situations, such as mergers, acquisitions, or restructurings, where there is potential for significant value creation for shareholders.
• Depositary Receipts: The fund holds American Depositary Receipts (ADRs), European Depositary Receipts (EDRs), and Global Depositary Receipts (GDRs) to gain exposure to foreign companies while offering the convenience of investing through US markets.
• Fixed Income Securities: GKAT may invest up to 30% of its assets in fixed-income securities, providing an additional layer of stability and income generation, particularly during market downturns.
• Exchange-Traded Funds (ETFs): The fund can invest in ETFs to diversify its holdings and to gain exposure to certain market segments while maintaining a controlled allocation of no more than 30% of total assets.
• Cash and Short-Term Instruments: To ensure liquidity and respond to market volatility, GKAT may fully shift into cash or invest in short-term instruments, enabling a defensive strategy when necessary.