Looking ahead, Goldman projects total company share repurchases this year to be about $1 trillion, which could support the bank’s 2,850 price target for the S&P 500 – the S&P 500 benchmark was up 1.4% to 2,678 Tuesday.
As more companies look to add value through share repurchases, ETF investors can also capitalize on the potential opportunity through buyback-themed ETF strategies.
For instance, ETF investors who believe in a rise in share repurchases can look to ETFs that specifically target companies that implement buyback schemes, including the Invesco Buyback Achievers ETF (NYSEArca: PKW), the SPDR S&P 500 Buyback ETF (NYSEArca: SPYB), iShares U.S. Dividend and Buyback ETF (Cboe: DIVB) and AdvisorShares Wilshire Buyback ETF (NYSEArca: TTFS).
PKW includes a broader selection of U.S. companies that have effected a net reduction in shares outstanding by 5% or more in the trailing 12 months. SPYB focuses on S&P 500 companies with the highest buyback ratio in the past 12 months. DIVB is comprised of U.S. stocks with a history of dividend payments and or share buybacks where holdings include those with the largest dividend and buyback programs in the market measured by dollar value. Lastly, TTFS is comprised of companies that have a reduction in outstanding shares and meet specific leverage and cash flow requirements, weighting components based on Wilshire’s quantitative buyback strength signal.
For more information on the buybacks strategy, visit our buybacks category.