ETF Trends
ETF Trends

In another sign that investors continue to embrace exchange traded funds that offer exposure to companies returning cash to shareholders, the AdvisorShares TrimTabs Float Shrink ETF (NYSEArca: TTFS) has topped the $100 million in assets under management mark.

To be precise, TTFS finished with $105.3 million in AUM at last Friday’s close. The ETF debuted in early October 2011. The $100 million in assets level is viewed as pivotal by many industry observers because a widely held belief is that $100 million is necessary for an ETF to be profitable for the issuer.

Actively managed, TTFS does not focus solely on companies engaged in share buybacks. Sub-advised by TrimTabs Asset Management, TTFS is an equal-weight fund that focuses on companies that have reduced their shares outstanding over the prior 120 days. The ETF’s holdings are selected based on three primary criteria: Shareholder friendliness via float shrinkage, profitability measured by free cash flow and balance sheet sturdiness measured by leverage ratio. TTFS has a free cash flow yield of almost 8.1%, according to issuer data.

Broader market shrinkage, be it through mergers and acquisitions, delistings and share repurchases, has helped propel TTFS to an almost 38% gain over the past year. The fund is up 1% to start 2014. [Market Shrinkage Boosts Some ETFs]

Members of the S&P 500 increased share buybacks by 8.6% during the third quarter to $128.2 billion up from the $118.1 billion spent on share repurchases during the second quarter, according to S&P Dow Jones Indices. Through the end of the third quarter 2013, U.S. companies had spent $445.3 billion on share repurchase plans. [Stock-Picking Buybacks has Mixed Results]

At the end of the fourth quarter, TTFS allocated a combined 43% of its weight to the consumer discretionary and technology sectors. Industrials accounted for 16% of the fund’s weight while financial services and health care each had allocations of 12%.

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