At a time when buzzwords and high-frequency trading tend to get all the attention, Argent Capital Management has taken a lower-key — but more strategic — approach. The St. Louis active asset manager has launched two new ETFs: the Argent Large Cap ETF (NASDAQ:ABIG) and the Argent Focused Small Cap ETF (NASDAQ:ALIL). These complement the firm’s already existing Mid Cap ETF (NASDAQ:AMID), providing a complete array of U.S. equity exposure that adheres to a rather old-fashioned policy: invest in good companies and let them compound.

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Argent’s strategy focuses on the idea it calls “enduring businesses” — companies with steadily increasing cash flows, sound capital allocation habits and a lasting competitive advantage. “We think of it as the economic version of a well-built house that stands strong in all weather. We look closely at how a company reinvests its profits, manages debt, and maintains its edge over competitors. Even as markets rapidly evolve, these fundamental strengths rarely go out of style,” ABIG portfolio manager Jed Ellerbroek, Jr., told Benzinga.

These are not big, index-hugging funds. Each is constructed with conviction: about 30 to 35 names in ABIG and 35 to 45 in ALIL. That focused method reflects Argent’s view that meaningful long-term outperformance results from extensive fundamental research and allowing great businesses to do what they do best—compound cash flows over time.

“Good capital allocation is like planting trees today, knowing they’ll provide shade in the future. It takes patience,” Ellerbroek said. “We seek companies that consistently reinvest cash wisely to fuel long-term growth. When volatility hits, our conviction in these disciplined firms allows us to look beyond short-term and hold positions confidently for years, compounding returns along the way.”

In today’s market, that conviction causes them to be overweight in sectors like consumer discretionary and industrials within ABIG. Amazon (NASDAQ:AMZN) is the fund’s largest holding and a key driver of that discretionary tilt. Argent also prefers stocks like Copart (NASDAQ:CPRT), Booz Allen Hamilton (NYSE:BAH) and Waste Connections (NYSE:WCN) for their consistent cash flows and resilient business models. At the same time, they’re underweight in consumer staples, which they consider less attractive compared to some industrials.

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In ALIL — the small-cap cousin — Argent is making the most of financials and housing-related consumer discretionary names. Ellerbroek cites strong long-term growth opportunities and favorable valuations in both areas. Conversely, the team is cautious about a few companies that don’t have their quality-first approach.

“For ALIL, our small cap strategy, we’re overweight consumer discretionary, especially housing-related names, given their attractive long-term growth potential,” he said. “We're also overweight in financials, thanks to compelling secular trends and reasonable valuations. Meanwhile, we're cautious on healthcare, largely due to our aversion to unprofitable biotech businesses.”

That research-led approach is particularly important in the small-cap space, where analyst coverage can be thin and market narratives can shift quickly. According to Ellerbroek, the firm conducts small-cap due diligence more like private equity investors than public market traders. “We're asking ourselves, ‘Would we want our own families to own this business?’ This mindset ensures we invest only in businesses we deeply understand and believe can compound value over time.”

Argent’s commitment to quality applies to risk management as well. Volatility isn’t risk; owning lousy businesses is. “Owning exceptionally high-quality companies, we can confidently look beyond short-term fluctuations, knowing these businesses are built to adapt and thrive over the long term,” Ellerbroek said.

With three concentrated ETFs now accessible for large-, mid- and small-cap stocks, Argent views a natural opportunity for advisers to create an all-weather core equity portfolio with their funds. ABIG represents a solid large-cap anchor, AMID focuses on mid-cap growth opportunities, and ALIL provides access to emerging opportunities in the small-cap universe.

In a market filled with passive approaches and moment-in-the-sun thematic ETFs, Argent is counting on something that has remained consistent: fundamental research, patience and the compounding power of quality businesses.

As a parting thought, summarizing Argent's investment approach, Ellerbroek told Benzinga, “We invest in a select group of great businesses that steadily compound cash flow and have lasting competitive advantages – because in investing, short-term thinking rarely wins; patience usually does.”

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Argent Large Cap ETF Stock News

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Tuesday, April 15, 2025