Tweedy, Browne Insider + Value ETF Outperforms Market Through Contrarian Insider Purchase Strategy

The Tweedy, Browne Insider + Value ETF (ticker: COPY) represents a compelling case study in contrarian active management during a period of extraordinary market concentration. Launched on December 26, 2024, by the 106-year-old value investing firm Tweedy, Browne Company, the fund’s first full calendar year of operation has validated its distinctive approach to identifying undervalued investment opportunities through corporate insider purchasing patterns [1][2].

The fund’s remarkable 2025 performance—generating approximately 22.85% year-to-date returns versus 17.43% for the MSCI World Index—highlights an increasingly relevant investment thesis as mega-cap technology stocks continue to dominate traditional benchmarks [2]. With the “Magnificent Seven” (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla) representing approximately 34.3% of the S&P 500 by December 2025, up from just 12.3% in 2015, the concentration risk in passive index investing has become a material concern for sophisticated investors [4]. The COPY fund’s deliberate avoidance of these mega-cap names positions it as a potential solution for investors seeking differentiated exposure.

The investment strategy underpinning COPY draws directly from academic research on insider trading patterns, particularly the work of H. Nejat Seyhun of the University of Michigan, which demonstrated that corporate insiders with comprehensive knowledge of firm affairs—such as board chairmen and officer-directors—are more successful predictors of future abnormal stock price changes than officers or shareholders alone [2][3]. This empirical foundation provides intellectual credibility to what might otherwise appear as a niche screening approach.

The fund’s proprietary scoring model incorporates 33 distinct data items, combining traditional value metrics with insider purchase analysis to identify companies where management confidence exceeds market sentiment [3]. The screening criteria exclude compensation-plan-related purchases, focusing instead on discretionary “free will” purchases that more accurately signal insider conviction. This methodological rigor distinguishes COPY from simpler insider trading strategies that may incorporate mechanical purchase-trigger rules without qualitative assessment.

The COPY fund’s performance reveals several significant insights about the current market environment and factor-based investing strategies.

First, the 2025 performance data demonstrates that the “Magnificent Seven” narrative, while dominant in market commentary, obscures considerable heterogeneity within the group. While the simple average return across all seven stocks reached approximately 27.5%, five of the seven stocks (Amazon, Apple, Meta, Microsoft, and Tesla) actually underperformed the market-cap-weighted S&P 500 return of 17.5% [5][6]. Only Alphabet (+65.8%) and Nvidia (+40.9%) delivered truly exceptional results. This dispersion suggests that passive exposure to the Magnificent Seven is increasingly a bet on just two stocks rather than a diversified technology allocation—a nuance that COPY’s avoidance strategy implicitly addresses.

Second, the fund’s heavy weighting in small- and mid-cap companies (approximately 78-79% of holdings with market capitalizations below $25 billion) positioned it advantageously amid the market’s year-end rotation into smaller-capitalization stocks [2][3]. The Russell 2000’s 10.71% gain for 2025, while modest in absolute terms, represented meaningful outperformance relative to its recent historical underperformance versus large-cap indices. COPY’s multi-cap approach captured this rotation benefit while maintaining the analytical discipline of its insider purchase framework.

Third, the sector concentration in financials (29.2% of equities) proved fortuitous given the year-end sector strength, with financial services showing relative resilience despite broader market volatility [0][2]. The fund’s banking exposure alone represents approximately 15.7% of holdings, creating meaningful sensitivity to interest rate expectations and credit cycle dynamics. This concentration represents both a source of outperformance and a risk factor requiring ongoing monitoring.

Fourth, the fund’s geographic diversification—particularly its substantial international allocation (71.09% outside the United States)—provided useful diversification during periods of dollar strength and U.S. market volatility [3]. The emphasis on Great Britain (13.66%), Canada (11.18%), Germany (7.43%), and France (4.74%) reflects a genuinely global approach that differs materially from domestically-focused U.S. value funds.

The COPY fund presents a risk profile characterized by several distinct factors that investors should carefully evaluate.

represents the most significant risk factor, with approximately 65% of holdings in companies below $10 billion market capitalization and roughly 17% in companies under $2 billion [2]. Smaller-capitalization stocks historically exhibit higher volatility, wider bid-ask spreads, and greater sensitivity to economic downturns. During periods of market stress, liquidity can evaporate rapidly in these segments, potentially amplifying drawdowns relative to broad market indices.

at 29.2% creates meaningful correlation risk with banking sector performance [2]. While this weighting contributed to 2025 outperformance, it also means the fund’s returns depend heavily on interest rate trajectories, credit quality trends, and regulatory developments affecting financial institutions. The banking sector’s performance is notoriously difficult to predict and can diverge significantly from broader economic indicators.

warrant acknowledgment—the fund has operated for less than one calendar year, representing an insufficient period to evaluate strategy effectiveness across different market conditions [2]. First-year performance, while impressive, may reflect favorable timing as much as strategic skill. Investors should monitor whether outperformance persists through complete market cycles.

emerge as the fund scales, with $158.8 million in assets under management representing a modest base [2]. The strategy’s focus on smaller-cap stocks with relatively illiquid trading characteristics means that substantial AUM growth could impact execution quality and returns. The 182-position portfolio suggests attempts to mitigate concentration risk, but the underlying liquidity constraints remain.

include the fund’s genuinely differentiated approach, its high active share (97.19%), and its foundation in academic research on insider trading signals [2][3]. As market concentration concerns continue to mount among institutional investors, COPY represents a potential allocation for investors seeking contrarian exposure with meaningful tracking error relative to passive benchmarks.

The Tweedy, Browne Insider + Value ETF (COPY) delivered first-year results that merit serious consideration within the context of active management evaluation. The fund’s +22.85% year-to-date return through September 30, 2025, outperformed the MSCI World Index by 5.42 percentage points and exceeded all major U.S. equity indices including the NASDAQ Composite (+19.78%), S&P 500 (+15.96%), and Russell 2000 (+10.71%) [0][2].

The fund’s distinctive characteristics include an expense ratio of 0.80%, 182 holdings across global markets, and a valuation profile significantly below market averages with a weighted average price-to-earnings ratio of 11.7-13.8x and price-to-book ratio of 1.70x [2][3]. The 3.59% dividend yield provides meaningful income component, while the 97% active share confirms genuine portfolio differentiation from benchmark exposure.

The investment universe—companies where corporate insiders are making discretionary stock purchases—provides a continuously refreshed pool of ideas that adapts to changing market conditions. This approach contrasts with static factor strategies that may become overcrowded as assets flow into systematic value or quality funds.

Geographic diversification across 28.91% U.S. exposure and 71.09% international allocation, combined with sector weighting focused on financials (29.2%), consumer discretionary (14.7%), industrials (11.8%), and energy (10.0%), creates a portfolio profile distinct from both traditional domestic value funds and global benchmark representations [2][3].

Investors evaluating COPY should consider the fund’s alignment with their broader portfolio construction objectives, its role as a satellite position versus core holding, and its suitability given the explicit small-cap and sector concentration risks embedded in the strategy. The limited track record necessitates patience in evaluating long-term viability, while the academic foundation underlying the insider purchase methodology provides intellectual grounding for the approach.