Longnook's compounders ETF leads with tankers, Newmont and Exxon Mobil

A fund of stocks Longnook calls uncommon compounders, LUNC, began trading on Tuesday, September 29. A holdings profile updated Thursday, October 1, put nearly 45% of it in a tanker company, a gold miner, an oil company and a mining-royalty firm.

Scorpio Tankers, which ships refined petroleum products, was 14.24% of the fund. Newmont was 13.30%, Exxon Mobil 9.22% and Vox Royalty, which collects mining royalties rather than operating mines, 8.09%. The asset manager reported 28 positions as of Friday, October 2, the day after that profile.

The September 20 prospectus calls the targets Misclassified Compounders, "companies with characteristics of a durable, high-quality business that are priced by the market as though they are not." It also says the manager may overweight sectors and regions with improving supply and demand, a stronger economic backdrop, or better corporate governance, and that those overweights are likely to change.

Funds that already use the word compounders own a different list. Harbor's fund of compounder stocks outside the United States, COSEA, is led by Taiwan Semiconductor and ASML, and its ten largest positions are 46% of that fund. The ten largest in the October 1 profile were 69% of LUNC.

First Manhattan's fund of U.S. compounder stocks, DFMCE, holds companies such as Microsoft and Visa. Neither COSEA nor DFMCE is global. The prospectus says LUNC may buy stocks in any country, including emerging markets, and companies of any size, and it is non-diversified, so a few companies can be a large share of it.

That prospectus also said that at launch the fund expected to take in a material amount of its assets as contributed stock, in transactions meant to defer tax.

As of Monday, October 5, COSEA charges 0.55%, DFMCE charges 0.71%, and T. Rowe Price's fund of stocks from around the world, CTGLB, charges 0.46%. The September 20 prospectus sets LUNC's fee at 0.75% a year, all of it the management fee, and estimates other expenses at zero.

The prospectus says the fund pays a share of the expenses of any ETF it holds. A Vanguard fund that tracks the Russell 2000 index of smaller U.S. stocks, AVTWO, was 3.62% of the October 1 list, one of the ten largest positions.

David Daglio, Longnook's founder, chief investment officer and only portfolio manager, reviews an artificial-intelligence model's output, can reject its conclusions, and decides what the fund owns. The model researches the stocks and does not select them.

The prospectus still says the fund relies heavily on the model. If the model does not work as intended, the fund may lose value.

Before this fund, Daglio was chief investment officer at Mellon Investments from 2017 to 2019, where he managed value equity strategies and hedge funds, and chief investment officer at TwinFocus until April 2026. He left the Alkermes board in 2025.

ETF Architect, the fund's adviser, reported assets of $32.4 million as of Friday, October 2. In the first four sessions, through that Friday, the shares traded a few thousand on each of the first two days, then about a hundred.

A buyer of LUNC owns that mix of tankers, gold, oil and mining royalties, not the lists in COSEA and DFMCE. The prospectus lets the manager overweight sectors and then change the bets.