Earlier this week, Distillate Capital rolled out an ETF that relies on fundamentals to select securities from the largest 1,500 stocks outside the U.S. The Distillate International Fundamental Stability & Value ETF (DSTX) focuses on companies with “stable cash flows and healthy balance sheets,” according to a press release.
DSTX comes with an expense ratio of 0.55% and lists on the NYSE Arca.
Eligible companies must meet size and liquidity requirements, but they also must have at least five years of cash flow per share data available. From there, companies are evaluated based on financial indebtedness; the volatility of its projected and historical cash flows; and valuation as measured by free cash flow yield, with the top 100 companies selected for inclusion, the prospectus says.
Securities in the index are weighted via a modified equal weighting approach that also takes into account normalized free cash flow. The selection universe is updated annually, while the index itself is rebalanced on a quarterly basis, the document indicates.
Distillate launched the Distillate U.S. Fundamental Stability & Value ETF (DSTL), which uses a similar methodology with U.S. stocks, in 2018, and the fund has gone on to accumulate $204 million in assets under management.
Global Beta ETF Changes Name, Index
Global Beta ETFs announced that effective today it would be changing the index and name of the Global Beta Momentum Growth ETF (GBGR), which it launched earlier this year. Although the ticker remains the same, the fund will now be known as the Global Beta Rising Stars ETF and will track the FactSet Rising Stars Index.
The fund had previously tracked the Global Beta Momentum-Growth Factor Index, which targeted the top 100 growth stocks in the S&P 500 Index based on revenue growth rate. The new index focuses on the information technology sector and selects companies based on market share growth, industry growth and operating margin growth.
First Trust ETFs Reorganized
Two of First Trust’s ETFs were merged into two of the firm’s other existing ETFs at the start of this week. As of Dec. 14, the First Trust Value Line 100 ETF (FVL) was reorganized into the $10 billion First Value Line Dividend Index Fund (FVD) and the First Trust Mega Cap AlphaDEX Fund (FMK) was reorganized into the $73 million First Trust Dow 30 Equal Weight ETF (EDOW).
Contact Heather Bell at [email protected]