The Power Of Free Cash Flow

TrimTabs

Research

9 Pages

January 2020

TrimTabs Asset Management outlines a free cash flow driven equity strategy centered on identifying high quality companies with strong cash generation and disciplined capital allocation. The paper argues free cash flow is a more reliable signal than earnings and highlights a systematic model that expands holdings while tightening quality screens, including ESG overlays.

Key Takeaways

Expanded Portfolio Breadth: Holdings increased from 80–120 stocks to approximately 150, improving diversification while maintaining exposure to top decile free cash flow ranked companies.

Fee Structure Insight: Total annual fund expenses sit at 0.61%, with a 0.59% management fee, positioning the strategy competitively within active ETF frameworks.

Turnover And Efficiency: Portfolio turnover reached 45% in 2020, reflecting active rebalancing tied to changing free cash flow rankings and systematic model outputs.

Markets

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