In a note, Ted Theodore, Portfolio Manager of the TrimTabs US ETF (TTAC), also argued that focusing on companies with strong free cash flow is a more sound approach to security selection than relying on other more popular factors like volatility or size.
Investors interested in the free-cash-flow metric as a focused factor now have a number of options to choose from. For instance, the Pacer Global Cash Cows Dividend ETF (NYSEArca: GCOW), Pacer US Cash Cows 100 ETF (NYSEArca: COWZ), Pacer US Small Cap Cash Cows 100 ETF (BATS: CALF) and Pacer Developed Markets International Cash Cows 100 ETF (BATS: ICOW) all implement free-cash-flow yield screens to narrow down their universe.
TrimTabs offers the actively managed TrimTabs All Cap International Free-Cash-Flow ETF (BATS: TTAI), which focuses on foreign markets, and the TrimTabs Float Shrink ETF (BATS: TTAC), which targets U.S. companies that have strong free cash flow and reduce share counts.
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