Investors who want to target U.S. companies that allocate more toward capital expenditures may take a look at the Elkhorn S&P 500 Capital Expenditures Portfolio (NasdaqGM: CAPX), which focuses on those companies that are diligently reinvesting in their businesses to increase market share and competitive moat.
Specifically, CAPX takes the top 100 S&P 500 companies based on efficient capital expenditure as a way to track U.S. firms that have reinvested their money toward meaningful growth and innovation, including top components like Nvidia corp 1.5%, KeyCorp 1.4%, United Rentals 1.3%, Fifth Third Bancorp 1.3% and M&T Bank Corp 1.3%.
The fund includes a larger 22.2% tilt toward the financial sector, along with 17.0% tech, 16.3% health care, 16.3% consumer discretionary and 7.8% industrials.
If companies are not putting enough money back into expanding operations, people may see that capital expenditure is trending below depreciation. Through healthy level of reinvestment, companies are capable of sustaining earnings growth in the future.
For more information on the markets, visit our current affairs category.