Distillate Capital Launches Small, Midcap ETF

The active fund will be the value firm’s third ETF.

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Reviewed by: Shubham Saharan
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Edited by: Shubham Saharan

Distillate Capital Partners, a Chicago-based value investor managing nearly $770 million in assets, has added a third exchange-traded fund to its lineup, an actively managed ETF focused on small and midcap stocks.  

The Distillate Small/Mid Cash Flow ETF (DSMC) charges an expense ratio of 0.55% and lists on the NNYSE Arca exchange, according to a company statement. It joins Distillate’s two other equity-focused products, the Distillate U.S. Fundamental Stability & Value ETF (DSTL) and the Distillate International Fundamental Stability & Value ETF (DXTX)

 

Source: ETF.com 

 

The fund’s launch comes at a precarious time for equity markets. The S&P 500 has notched three-straight quarterly declines, its longest slide since 2009. Even the brief rally that appeared at the beginning of the month seems to have ended, with the S&P dropping nearly 0.7% and the Nasdaq falling 0.4% in the middle of Thursday’s trading day in New York.  

Still, the fund’s managers say they’re optimistic their approach of following about 150 U.S. small and midcap stocks that meet parameters such as valuations and future cash flow will yield positive returns.  

“Recent market turmoil has created enormous opportunity within the small/midcap space,” Jay Beidler, Distillate Capital’s co-founder, told ETF.com.  

He said turbulence in the market has created a “double-digit free cash flow yield” that investors will find attractive.  

 

Contact Shubham Saharanat[email protected] 

Shubham Saharan is a markets reporter at etf.com. Before joining the company, she reported for Bloomberg and the Financial Times. Saharan is a graduate of Barnard College of Columbia University.