Host: So let's take a look now at our ETF spotlight, and this week we're looking beyond the United States with VX US. That's the Vanguard Total International Stock ETF. Now this fund's holdings are exclusively foreign. There's no companies located here in the United States. Now after years of American stocks dominating global markets, investors are starting to put more money to work overseas. And in fact, international equity ETFs attracted nearly twice. As much new money as US large cap funds in the month of September, and VX US offers one way to access that trade. The fund holds thousands of stocks across developed and emerging markets, including companies in Europe, Japan, and more broadly in Asia. And this is why the international story is so interesting right now, because US stocks are trading near record highs. Valuations remain elevated, and a stronger dollar can make investing overseas a little more complicated. So the question is, are investors simply diversifying away from an expensive US market, or are they starting to see better opportunities abroad? So we're going to continue to keep watching the US to see whether that international rotation continues into the fourth quarter. I want to keep the international conversation going. Let's turn now to our Dancing Goey, portfolio manager with Davis Advisors. Danton, thank you so much for joining us today. So as I was just mentioning, we've seen a significant surge.
Stanton Goy: Of course, absolutely.
Host: So we've seen a significant surge, as I was mentioning, in the flows into international equity ETFs, particularly those global ex-US funds attracting nearly twice as much money as those large caps, the American large caps last month. So I'm curious to know if this is the beginning of a more sustained rotation away from the US equities, or is this really just a diversification play.
Stanton Goy: I, you know, I, I think it's a little bit of both. Um, and there's a lot of reasons to want to have exposure to international stocks, um, in international markets. I mean, you know, one, they're, they're very cheap, right? Who doesn't like a cheap, uh, deal? Right now, uh, the international index, MSCI, uh, AquiXUS is Trading at 13 times earnings and we know that the S&P 500 is well over 20 times. And so that's a big discount there, about a 36% discount. You're getting higher yields too, um, about twice as much with a 2.4% dividend yield versus uh a little over 1% for the US market. So, I think that, you know, that's a good reason to, to want to have exposure. But then also, people want to diversify, like you were talking about, uh, you know, US markets have done great. The last 10 or 15 years and looking at client portfolios, you know that they're overweight, uh, the US and so it makes a lot of sense to look at uh the international markets and also these international markets are not as concentrated. Uh, in, uh, in a single sector. We know that the S&P 500 is about half technology in the single sector, and that is less so, uh, internationally. So, you've got also some sector diversification. You've obviously got, uh, uh, so different market, uh, diversification. And then your previous, uh, uh, guest Balal was talking about inflation. That has, um, obviously, obviously an impact on, uh, demand for the US dollar, um, which has been a little bit weaker. Those are all good reasons to diversify away from, uh, the US market as well. So yeah, lots of good reasons to look at international markets.
Host: OK, so I want to talk about where you're finding some of those opportunities as you mentioned there they're not all created equal when we're looking at the international market and there's definitely some pockets that are picking up investor interest. So when you look across Europe, Japan, China, other emerging markets, are there regions or sectors that you think offer the most compelling combination of that growth and that valuation story right now?
Stanton Goy: Yeah, absolutely. You know, I was talking about how the, uh, the international index is trading at 13 times. There are some markets out there that are, uh, even well below that. I mean, one that we think is really a, a big bargain today, the, uh, uh, the Chinese market, the MSDI China index trading at 10 times earnings. So, about half the US, uh, valuation and a lot of great companies there. I mean, one of my favorite. Quotes is, uh, you know, Baron Rothschild's quote of, um, you know, uh, the place to look is, uh, the place to time to buy, sorry, is when blood is in the streets, you know, even if that blood is your own. And, uh, the Chinese market has had a difficult year in 2026, but that is really providing a really strong opportunities, uh, out there. I mean, you know, individual stocks such as Full Truck Alliance, which is a leader. In, um, uh, online matching of freight and, and truckers for shippers, uh, that is growing, uh, earnings, uh, over 30%, uh, and yet is trading at about 8 times earnings. So something like that, um, is hard to find in the US market, um, but a great opportunity there with, uh, about 40% of their market capitalization, if you can believe, in cash. So really strong balance sheets. Um, and a really, uh, long-term growth story there where, you know, uh, matching of shipping and freight is moving online. Today, it's only 25% in China, but eventually, obviously, uh, it'll move to 50% plus. So, a lot of growth ahead there and Full Truck Alliance is the leader by far in that space. Um, you know, other names like Trip.com, the leader in online travel, uh, they're also growing, uh, very rapidly with the growth of travel, uh, in China, both the Chinese going overseas, but also with inbound traffic and travel coming into China. Uh, that company should grow at, uh, you know, 15% plus for many years with the growth of travel, with the rise of The middle class, uh, over time and also trading at a very low valuation as well, so single digit multiple there as well. So a lot of really great opportunities, great companies, um, and so we think that is a really attractive market, um, that is, yes, it might be contrarian, um, but I think that's really where one of the big opportunities lies today.
Host: I want to quickly ask you about active management. You manage DWLD and DINT. That's going to be the Davis Select worldwide and the Davis Select International ETF. What's the benefit of active management, do you think, particularly in international markets compared to just buying a broad international index?
Stanton Goy: Yes, I mean the index, you know, the international index today has nearly 2000 companies in it. We know. Obviously there's not 2000 great companies out there. A lot of those companies are state owned enterprises where shareholder value is not the primary focus, right? I mean, they're obviously sort of quasi or even fully government run entities, um, and so as an active manager you can avoid. Already those type of companies and then the world is changing so quickly with geopolitics, uh, with technology that I do think you really wanna have, uh, active management at the helm and in, uh, DINT, the Davis Select International DF, for example, we have 27 names. We're really focused on a few countries where we think that, um, the prospects, uh, and the safety are the best, um, and we really think about the long term and how all of this. Geopolitics and technology kind of looks like in 3 to 5 years, not just today.
Host: All right, thank you so much, Stanton Goy, portfolio manager at Davis Advisors.
