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Published on Sep 29, 2016
Charles
Biderman is back with a new float shrink ETF. TrimTabs Asset Management
is launching the TrimTabs Float Shrink ETF under the ticker " " this
week. This follows AdvisorShares' decision to replace TrimTabs as the
Sub-Advisor for the AdvisorShares Wilshire Buyback ETF at the end of
June. With TTAC, TrimTabs founder Charles Biderman is bringing its
proven proprietary algorithmic approach to a new ETF. "We're extremely
excited to be able once again to offer our proven methodology to
investors," said Biderman. The AdvisorShares Wilshire Buyback ETF, which
was developed and managed by Biderman until this past June, is up 110%
over the past five years, 33 percentage points better than the S&P
500. TTAC is primarily focused on generating long-term gains that exceed
those of the Russell 3000 Index. It does so by selecting approximately
100 companies that are both generating free cash flow and reducing their
share count without the use of leverage. "Free cash flow is the gold
standard when it comes to evaluating a company," said Biderman. "While
managements have enormous discretion in how they report sales, earnings,
assets, and liabilities, free cash flow is much less likely to be
subject to the same financial gimmickry." Another pillar of TTAC's
investment methodology is a focus on share reductions, also known as
"float shrink." Companies execute share reductions by lowering the
amount of shares outstanding, most commonly through stock buybacks,
though this can also be accomplished with other corporate actions. This
can prove advantageous for investors holding the stock in question, as
they end up holding a "larger piece of the pie." Biderman said TrimTabs
takes an extra step by ensuring that companies executing buybacks are
only doing so with free cash flow, not through additional leverage.
TTAC's expense ratio will be 59 basis points, compared to 90 basis
points currently being charged for the AdvisorShares TTFS.
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