Suncoast Select Growth ETF (SEMG)

The Suncoast Select Growth ETF (SEMG) is an actively managed exchange-traded fund that seeks long-term capital appreciation by holding a tightly curated portfolio of approximately 15 to 30 large-cap U.S. companies, selected through a disciplined fundamental analysis process.

The concentrated growth playbook

Fewer, better companies — held for the long haul.

Suncoast Select Growth rejects the index-tracking model. Rather than holding hundreds of stocks to mimic a broad market benchmark, SEMG concentrates its holdings into a much smaller set of businesses that the portfolio managers believe offer above-market return potential with lower volatility than the wider market. The fund is non-diversified, meaning it is legally permitted to hold unusually large positions in any single security if the managers believe that position is warranted — a structure that makes sense only if conviction runs high.

The investor base for this fund tends to skew toward those who have grown skeptical of passive indexing at current valuations and who believe that careful stock selection, done with discipline and a long time horizon, can earn excess returns. That belief is not universally shared — many studies show that active managers on average fail to beat their benchmarks after fees — but Suncoast’s concentrated approach at least distinguishes itself from the large middle ground of index-hugging active funds.

How Suncoast picks stocks

The fund employs what it calls the “SEM Disciplined Investment System,” a bottom-up fundamental approach that blends value and growth principles. Rather than starting with a sector or a theme, Suncoast begins at the company level, identifying individual businesses it believes trade at reasonable valuations relative to their long-term earnings power and growth prospects. The system is said to blend value thinking — purchasing at reasonable prices — with growth thinking, capturing businesses that will expand their earnings over time.

Once a stock is selected, the fund expects to hold it for an average of 3 to 5 years. This is the opposite of rapid trading. The long holding periods are meant to give the investment thesis time to play out and to minimize the drag of portfolio turnover and its accompanying trading costs and tax consequences. For investors in taxable accounts, that turnover discipline matters; for those in tax-sheltered accounts, it matters less, but it still reflects a philosophy that permanent capital is better than perpetually chasing new opportunities.

The fund’s top holdings at inception included Alphabet, NVIDIA, Microsoft, McKesson, and Visa — a mix of technology and diversified large-cap names typical of growth-oriented managers. The concentration here is visible: the top five holdings represent roughly 40% of the fund, while a true index fund’s top five positions would represent a much smaller slice of the portfolio.

Active management at a reasonable cost

The 0.60% expense ratio is higher than a passive index fund — a broad U.S. equity index ETF costs roughly 0.03% — but lower than the median actively managed mutual fund. The fund’s fee structure reflects a common pricing model: active management costs more than passive indexing, but ETF structures tend to be cheaper than mutual-fund wrappers because they avoid some intermediary markups and have lower operational overhead.

Investors are paying for stock selection. Whether they receive returns that justify that premium depends on whether Suncoast’s managers can sustainably pick stocks that outpace the market enough to cover their fee and still deliver a gain. That is the challenge every active manager faces, and it is far from guaranteed.

Who this fund is for and how to research it

Suncoast Select Growth suits investors who believe in active management, who can tolerate a non-diversified holding structure (meaning concentration risk is real), and who have the patience to hold positions for years rather than expecting quick turns. It is not suitable for those seeking maximum diversification or low costs.

Anyone considering SEMG should read the fund’s prospectus and fact sheet from Suncoast Equity Management, which lay out the investment strategy, the fee structure, and the specific risks of concentrated portfolios. The quarterly and annual holdings reports, available from the fund sponsor, show what stocks the managers own and how their allocations are changing. Watching the composition of the portfolio over time reveals whether the managers are genuinely adhering to their discipline or drifting toward something else.

A key metric to track is the fund’s rolling three- and five-year total return compared against the S&P 500 Index, which is the natural benchmark for large-cap U.S. equity exposure. Over longer periods, this comparison shows whether the active management has earned its fee or has fallen behind. There is no shame in underperforming the market — most active managers do — but the investor ought to know clearly and honestly whether their choice is paying off.