A value fund buys tech when the multiple and an insider agree

The Tweedy Browne Insider + Value ETF held 6.22% of its portfolio in information technology as of August 31, per the fund's own page — a modest weight for a fund whose name is unambiguously about value, and an instructive one. COPY's screen is narrow by design, owning value stocks where insiders are buying shares or the company is repurchasing them; nothing in that test forbids technology, so when multiples in a sector compress, the screen starts finding things there.

John Spears, a managing director and investment committee member at Tweedy, Browne, walked through one of those finds in an interview with Bloomberg: a longtime Adobe director, David Ricks, had bought $2 million of the stock while shares slid from about $400 this year to $190, and the fund's managers looked at what that left — roughly eight and a half times earnings, an earnings yield near 12% — and judged it to clear their proprietary value score. ETF Trends carried the exchange, along with the fund's 23.74% year-to-date NAV gain as of August 31.

Read the trade closely and the insider purchase does less work than the multiple: Adobe at eight and a half times earnings is a value stock on the arithmetic alone, and the director's $2 million adds timing — evidence from someone with an unusually close view of the business that the repricing has gone far enough to act on. That is real evidence, and it is thin. A single director's purchase is an observation, and a fund buying on it is buying a name the market has already marked down, often for reasons the filings do not capture.

The multiple, not the insider, is what makes this defensible: at eight times earnings, being early is survivable if the earnings are real; at the $400 the shares carried earlier this year, being right about the franchise was not enough to avoid the drawdown. COPY's edge here is willingness, not insight — a growth manager can read the same tape, but cannot buy it without breaking a mandate.

That is also why the tech line should stay small: it is the same insider-copying machinery the firm brought to a foreign-value ETF this publication covered this month, and the same century-old shop's pitch to ETF investors from August — an old discipline wearing a new wrapper. Tweedy, Browne is unaffiliated with VettaFi, which publishes the ETF Trends piece.

Watch the next holdings disclosure for whether the sleeve grows: if de-rated large-cap tech names keep printing single-digit multiples with insider buying attached, 6.22% is a floor rather than a ceiling — and a value fund whose tech weight grew large would be a value fund that stopped waiting for price.