TrimTabs Asset Management, begun trading a new New Float Shrink US Equity ETF, the TrimTabs Float Shrink ETF (Bats: TTAC) on Wednesday, September 28, 2016. Here is a synopsis of the new ETF:
|Symbol: TTAC||Exchange: BATS|
|Name: TrimTabs Float Shrink ETF||Net Expense Ratio: 0.59%|
The TrimTabs Float Shrink ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by primarily investing in the broad U.S. equity market, as represented by the Russell 3000 Index Stocks. The Fund seeks to achieve this goal by investing in stocks with liquidity and fundamental characteristics that are historically associated with superior long-term performance. Based on extensive historical research, TrimTabs Asset Management, LLC (Adviser) designed the following quantitative stock selection rules to make allocation decisions and to protect against dramatic over- or under-weighting of individual securities in the Fund’s portfolio.
Decile Rankings of Russell 3000 Index Stocks.
The Adviser ranks stocks in the Index by decile (i.e., top 10%, top 20%, top 30%, etc.) based on the following criteria:
(i) the decrease in their outstanding shares (float shrink) over approximately the past 126 trading days;
(ii) the increase in free cash flow (the money available to the company that is not used to pay for its daily operations) over approximately the past 126 trading days; and
(iii) the decrease in leverage over approximately the past 126 trading days. Leverage is measured as the ratio of total liabilities to total assets. The Adviser uses the relative decrease in leverage rather than amount of leverage itself as a criterion because the degree of leverage varies across industries.
The Russell 3000 Index measures the performance of the 3,000 largest publicly traded U.S. companies, based on market capitalization.The Index measures the performance of approximately 98% of the total market capitalization of the publicly traded U.S. equity market.
The top decile of stocks ranked represent the companies in the Index with (1) the largest reduction in shares outstanding, (2) the strongest growth in free cash flow, and (3) the largest decrease in leverage, respectively.
Stock Selection Algorithm.
The Adviser uses an algorithm to combine the three rankings into a single ranking for each stock ranked (combined ranking). The algorithm places a higher weight on the float shrink ranking, followed by the free cash flow ranking, followed by the leverage ranking. Under normal circumstances the Fund invests in 80 to 120 stocks from the top decile of stocks with the highest combined ranking, although the Adviser retains discretion to adjust allocations.
Fund Top Holdings:
|FTI||FMC TECHNOLOGIES INC||1.33%|
|UAL||UNITED CONTL HLDGS INC||1.33%|
|WOR||WORTHINGTON INDS INC||1.32%|
|IDTI||INTEGRATED DEVICE TECHNOLOGY COM||1.31%|
|LUV||SOUTHWEST AIRLS CO||1.30%|
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