The AdvisorShares TrimTabs Float Shrink ETF (TTFS) has received a Five-Star Morningstar Rating for both its three-year and overall risk adjusted performances from inception to 31 October 2014.
There are currently 347 funds in Morningstar’s Mid-Cap Blend category.
TTFS is managed by TrimTabs Asset Management, a California-based SEC registered investment advisor affiliated with TrimTabs Investment Research.
In pursuing its investment strategy, TTFS invests in companies that shrink their equity float – the total number of shares publicly available for trading – while growing free cash flow and reducing leverage on their balance sheets. These are important attributes that differentiate TTFS from a passive approach to buyback investing. Using a quantitative algorithm, the manager screens approximately 3,000 US companies on a daily basis and then invests in their highest ranked 100 stocks for TTFS’ equal-weighted portfolio. TrimTabs’ liquidity research shows that companies using free cash flow to shrink the trading float of shares create a potentially profitable supply and demand imbalance as more money chases fewer shares, and TTFS’ performance reinforces that notion. Since its inception on 4 October 2011, and through 31 October 2014, TTFS has outperformed the Russell 3000 Index.
Morningstar compares each ETF’s risk-adjusted return, with at least a three-year history, to the open-end mutual fund rating breakpoints for each of its respective categories. Consistent with the open-end mutual fund ratings, TTFS earned its five-star ranking as being in the top 10 per cent of funds – that includes both ETFs and mutual funds – in the Mid-Cap Blend category.
“We are pleased that TTFS becomes yet another domestic equity strategy from AdvisorShares transparent actively managed ETF suite to earn a Five-Star Morningstar Rating,” says Noah Hamman, chief executive officer of AdvisorShares. “Although statistically speaking it’s difficult for active equity managers to outperform their benchmark indexes, it’s not hard to find those managers who produce alpha especially when they’re fully transparent. This ranking is further testament to TrimTabs industry-leading portfolio management delivered with the sought-after benefits of a transparent active ETF structure.”