In terms of screening for quality, DSTL emphasizes long-term fundamental stability over short-term price-based metrics and also incorporates a financial indebtedness measure that adjusts for off-balance sheet leases or other calls on capital that may not be picked up by traditional measures.
“These metrics lie at the very heart of what we’re trying to accomplish with DSTL,” said Matt Swanson, Cofounder. “They circumvent the inconsistent balance sheet treatment of intangible and physical investments while incorporating a company’s total firm value—not just its market cap.”
DSTL has the potential to perform well in a variety of market environments.
“With DSTL’s focus on fundamental stability, low leverage, and redefined valuation and quality metrics, we seek to outperform in up markets and remain resilient through periods of market stress,” said Swanson. “In upward-trending or flat markets, DSTL’s process systematically pushes the ETF towards solid value opportunities.”
DSTL seeks to track the Distillate Fundamental Stability & Value Index, and its expense ratio is 0.39%.
“We’re thrilled to draw on our long-term experience as fundamental value investors to share our approach to equity investing with ETF investors,” said Jay Beidler, Cofounder. “We take pride in the simplicity of our approach. In order to overcome our own behavioral biases, we’ve systematized an active investing philosophy and packaged it in a passively-managed vehicle. By paying attention to the fundamentals—value, quality, and risk—and how they’re measured, we’re confident that DSTL can play a key role as an equity allocation in investors’ portfolios, whether as a core or satellite holding.”
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