Distillate Small/Mid Cash Flow ETF
Our economy has undergone tectonic changes over the last several decades, and we believe accounting rules have not kept up, rendering many traditional measures of value, quality, and risk unhelpful.
By drawing on decades of experience as fundamental investors, we have developed customized measures of value and quality that are particularly relevant to today’s long-term investors. We utilize these measures in our investment process to exploit behavioral biases and minimize risk by eliminating stocks of companies that are not profitable, stocks that are expensive, and those of companies that are significantly indebted.
- Rationally-defined value: utilizes Distillate Capital’s proprietary normalized cash yield methodology, which focuses on through-cycle durability of an asset’s cash generation and indebtedness.
- Rationally-defined quality: focuses on fundamental financial strength rather than short-term price volatility.
- Rationally-defined risk: operates as a function of quality and value; de-emphasizes short-term price fluctuations.
DSMC is designed to offer investors exposure to an attractively valued portfolio of approximately 150 U.S. small- and mid-cap stocks that meet specific parameters involving reported and expected free cash flow and balance sheet quality.