Generating free cash flow is the ultimate purpose for any business, said Charles Biderman, CEO of TrimTabs. And that is why the TrimTabs International Free-Cash-Flow ETF is a necessary addition to any portfolio. ‘The only reason to start a business is to grow cash ultimately. It’s not to create earnings per share or revenue growth. It’s to create free cash flow after all expenses,’ said Biderman. TrimTabs International Free-Cash-Flow ETF (FCFI), which was launched earlier this month, invests in a basket of international companies screened for maximum free cash flow yield. FCFI tracks the TrimTabs International Free-Cash-Flow Index (TTIFC), which follows foreign companies with the highest free cash flow yield across ten international markets denominated in six different currencies. Those markets are the: Hong Kong Hang Seng Index, S&P/ASX 100 Index (Australia), Swiss Market Index, FTSE 100 Index (UK), S&P/TSX Composite Index (Canada), MSCI France Index, Korea Stock Exchange KOSPI 200 Index, Nikkei 225 Index (Japan), Deutsche Boerse AG German Stock Index and the Amsterdam Exchange Index (Netherlands). ‘The top 20% of companies growing free cash flow in each those markets are currently in the FCFI,’ said Biderman, adding that he does not hedge currencies in the ETF. The FCFI has lost 70 basis points since its June 2nd launch.
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