Sequoia Global Value ETF (SFGV)

The Sequoia Global Value ETF (ticker SFGV) is an exchange-traded fund built on a time-honoured investment philosophy: buy large companies across the world when they are priced cheaply relative to their earnings and assets, and hold them for long periods as the market eventually recognises their worth. It combines the geographic reach of a global equity fund with the disciplined stock-picking of value investing, targeting investors who believe that the world’s most underappreciated companies often sit outside the United States.

How global value investing emerged, and why Sequoia chose it

The philosophy underpinning Sequoia Global Value traces back through decades of investment practice. In the 1950s and 1960s, Benjamin Graham (among others) established that investors willing to search for overlooked stocks trading well below intrinsic value could build superior long-term portfolios. That approach, called value investing, worked best when applied with patience — holding positions for years rather than months, letting the market gradually correct mispricings.

By the 1980s and 1990s, as equity markets grew more globally connected, a handful of asset managers began to ask whether the same principle could work across borders. A company might be undervalued not just in its home market but specifically because it was foreign to international investors’ radars; a Japanese manufacturer or a European bank trading cheaply relative to earnings might offer the same margin of safety that domestic value investors had long sought. Sequoia Financial Group, founded on this global value premise, constructed a fund to systematically hunt for precisely those opportunities: substantial companies with strong balance sheets, trading at depressed valuations in any developed or emerging market.

What SFGV buys

The fund’s portfolio typically holds 40 to 60 large companies selected across the developed world (the United States, Europe, Japan, Australia, Canada) and a handful of emerging economies. Sequoia’s research process emphasizes balance-sheet strength, earnings stability, and valuation discipline. The managers are not buying distressed companies or turnarounds; they are looking for fundamentally sound businesses temporarily out of favour with the market.

Concretely, the holdings might include a major European bank trading below book value and yielding more than 3%; an established Japanese automotive supplier cheaper than its historical average despite stable profits; an American conglomerate with a depressed share price despite growing dividends. The common thread is quantitative cheapness (measured by price-to-earnings, price-to-book, and other ratios) coupled with qualitative solidity. The fund tends to be overweight in sectors that are traditionally home to value opportunities — financials, energy, industrials, and consumer staples — and underweight in faster-growing sectors like technology, which rarely meet Sequoia’s value criteria.

Why global diversification matters for value

A crucial insight driving the strategy is that value opportunities are not evenly distributed. In years when U.S. large caps are expensive, international companies — particularly in Japan, Europe, or developing markets — often offer richer opportunities. Conversely, when the U.S. market enters a value drought (as it did for stretches in the 2010s), a globally diversified value portfolio can harvest depressed international markets. By widening the hunting ground beyond the United States, Sequoia aims to always find a reasonable proportion of true bargains rather than being forced to chase sketchy ideas at home.

The geographic diversification also matters for currency hedging decisions. Most shares in SFGV are purchased in local currency — dollars for U.S. names, euros for European ones, yen for Japanese holdings. Sequoia does not systematically hedge these currency exposures, meaning a shareholder of SFGV experiences both the ups and downs of the underlying stock prices and the exchange rates between those currencies and the dollar. A European stock that rises 10% but sees the euro weaken by 5% versus the dollar will deliver roughly a 5% return to a U.S.-based investor. This adds both opportunity and risk.

The value factor and the long wait

The core belief animating Sequoia Global Value is that value works — that over long holding periods (measured in years or decades), cheap stocks systematically outperform expensive ones. Academic research into what is called the value factor supports this, though not without caveats. The strategy thrives in environments where overlooked, dividend-paying stocks are in favour and where the market’s attention drifts toward newer, sexier sectors. It struggles when growth and momentum dominate, because valued-down companies by definition are not the market’s current darlings.

The fund does not try to time these rotations. Instead, Sequoia maintains a disciplined commitment to buying and holding substantial holdings. Annual turnover is low — typically in the 20–30% range — meaning the fund is not trading in and out of positions constantly. That patience is both a strength and a test of character. Shareholders must tolerate periods where SFGV lags a U.S.-heavy market index, sometimes for years, in order to reap the potential outperformance when the value tide turns.

Costs and liquidity

As an actively managed ETF, SFGV carries an expense ratio meaningfully higher than a passive global index fund — typically in the range of 0.6% to 0.8% annually. That cost reflects the research and trading required to run the portfolio. The fund trades on the NASDAQ exchange with reasonable liquidity; because the underlying holdings (large, established companies) are themselves liquid, SFGV shares can be bought and sold throughout the trading day at prices close to net asset value.

How to research Sequoia Global Value

Prospective investors should begin with the fund’s prospectus and fact sheet, which detail the investment process, the geographic allocation, and the expense ratio. Compare SFGV’s returns over rolling three-, five-, and ten-year periods against benchmarks like the MSCI World Index (a broad global developed-markets index) and the MSCI Emerging Markets Index (a baseline for emerging-market exposure). Examine the portfolio’s current price-to-earnings and price-to-book ratios — they should be notably lower than the broad market. Read the annual reports to understand the managers’ rationale for the largest positions and to judge whether the process is consistent with the stated philosophy. And understand that value investing, while backed by long-term evidence, goes through droughts; a shareholder committing to SFGV is making a bet that those droughts end and that global value opportunities will reward patient capital over the next decade.