Frankfurt-headquartered index provider writes that cash flow is a fundamental metric for evaluating the financial health and resilience of a business.
“However, amid today’s volatile macroeconomic environment of high inflation, rising interest rates, and market uncertainty, it can be difficult for companies to consistently generate stable cash flows and maintain a strong balance sheet.”
In this context, Solactive has announced that Australian fund manager Betashares has expanded its engagement with the German index provider by launching the Betashares Global Cash Flow Kings ETF, which tracks the Solactive Global ex-Australia Cash Flow Kings Index.
The Solactive Global ex-Australia Cash Flow Kings Index tracks a portfolio of large- and mid-cap stocks from developed markets demonstrating strong quality attributes related to free cash flow. With a rule-based methodology, the index evaluates and selects companies with higher free cash flow generation, growth, stability, and lower leverage. The index aims to provide exposure to companies that have reliably generated healthy cash flows. It also encourages diversification by constraining sector and country exposures, while excluding the Australian home market to further distinguish from existing strategies.