The Schwab Fundamental U.S. Large Company Index ETF (NYSEArca: FNDX) focuses on retained operating cash flow, adjusted sales, and dividends plus buybacks. While not an overt buyback, dividend or value ETF, FNDX marries those components through large weights to sectors that can be considered value groups (think energy and financial services) as well as allocations to some of the largest share repurchasers and companies that have long histories of increasing dividends.
The First Trust Large Cap Core AlphaDEX Fund (NYSEArca: FEX) also tracks an enhanced index that incorporates growth and value screens. Growth factors including 3-, 6- and 12- month price appreciation, sales to price and one year sales growth, and separately on value factors including book value to price, cash flow to price and return on assets.
Related: Oppenheimer Adds International ETFs to Revenue-Weighted Lineup
The PowerShares S&P 500 High Quality Portfolio (NYSEArca: SPHQ) is one of the elder statesmen of the quality ETF category, having come to market in late 2005. The ETF’s quality tilt comes by way of emphasizing companies’ long-term earnings growth dividend-paying potential. The underlying index focuses on companies with the highest quality as determined by fundamental measures, including return on equity, accruals ratio and financial leverage ratio.
Additionally, the Oppenheimer Large Cap Revenue ETF (NYSEArca: RWL) is a strategy comprised of the same securities as the S&P 500 index, except the fund’s securities are ranked by top line revenue. Components are then rebalanced every quarter to keep the Revenue-Weighted index in line with the companies’ most recently reported revenue levels.
For more information on alternative index-based strategies, visit our Smart Beta Channel.