In a recent interview with Bloomberg TV, deep value investor Tobias Carlisle explained his macro approach as well as the strategy behind his firm’s ETF.

Carlisle, founder and portfolio manager at Acquirers Funds, explained that he seeks “strong businesses that are throwing off cash and buying back stock, very traditional long side for value.” His preferred metric in evaluating companies, he explained, is one that he created himself and calls the “acquirer’s multiple” which is “agnostic” to a company’s capital structure. “It looks for strong operating income,” he said, “making sure there are matching cash flows.”

Holdings in his ETF are heavy insurance companies and banks, but Carlisle explains that the fund’s approach is strictly bottom-up and doesn’t seek out any particular industry. “I think financials are undervalued,” he explained, adding that the 2008-2009 financial crisis is still relatively fresh in investors’ minds.

According to Carlisle, deep value investors have experienced a decade of “nuclear winter” but explains that today spreads between the least and the most expensive stocks are at “historical widths.” Typically, he explained, this has “led to good performance for value.”