AdvisorShares’ domestic equity active exchange-traded fund, the TrimTabs Float Shrink ETF (TTFS), has outperformed the Russell 3000 Index since its inception just over a year ago.
TTFS is managed by TrimTabs Asset Management, an SEC-registered investment adviser affiliated with TrimTabs Investment Research, an independent institutional research firm focusing on equity market liquidity.
The investment strategy of TTFS has multiple critical components. First, the portfolio manager seeks to identify companies that are actively engaged in buying back their own company stock (shrinking the “float”), which may create a potentially profitable supply and demand imbalance in the secondary equity market. Additionally, they seek to identify companies that have positive and growing free cash flow (profitable companies), and reduce the leverage on their balance sheets.
TrimTabs’ research process shows that investing in such companies has the potential to outperform passive and other fundamentally based investment strategies. TTFS screens approximately 3,000 US companies on a daily basis and then invests in the highest ranked 100 stocks, equally weighted, based on its quantitative algorithm.
Since its inception on 4 October 2011 up to 30 September 2012, TTFS has outperformed the Russell 3000 Index, while providing transparency, liquidity and better operational and tax efficiency within an ETF structure.