5 Actively Managed ETFs That Beat The Market In 2013
TrimTabs Float Shrink (TTFS), up 44%, beat the S&P by 12 percentage points last year after lagging the benchmark the prior year by 2 percentage points. Investor assets swelled more than tenfold in 2013 to about $104 million currently.
The fund holds stocks of 100 equal-weighted companies screened from the Russell 3000 index that are buying back shares, thereby decreasing the number of publicly traded shares or "shrinking the float."
Companies must also be increasing their cash flow and paying back debts to ensure that companies aren't borrowing money to beef up their stock prices.
"Six percentage (points) of the outperformance was due to the average TTFS holdings reducing the number of shares outstanding by about 6%," Charles Biderman, the ETF's portfolio manager, said in an email. "In addition, companies growing free cash flow while reducing the float of shares traded at an additional 6% premium, resulting in the 12% outperformance." The ETF carries a 0.99% annual expense ratio.
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