Investors seeking exposure to U.S. companies with high free cash-flow yield and dividend growth have a new option from Amplify ETFs.
The $4.4 billion asset manager, which acquired the ETFs of the ETF Managers Group in June, has announced the launch of the Amplify Cash Flow Dividend Leaders ETF (COWS) in response to investor demand for funds that provides diversification, risk control and a focus on companies that have the fundamentals that are likely to withstand overall market volatility.
The fund’s ticker, COWS, reflects the fact that these firms are often branded "cash cows."
“ETF investors have gravitated towards companies with high free cash flows due to their financial stability. COWS takes this investment strategy one step further by focusing on the dividend-paying companies in this universe which should allow shareholders to receive attractive dividend income,” said Christian Magoon, CEO of Amplify ETFs. “COWS will also have a 0% expense ratio in its first year of operation which we believe adds an important additional consideration for ETF investors.”
The new fund seeks an equal-weight portfolio with an industry exposure cap of 24% and aims for investment results that generally correspond to the Kelly U.S. Cash Flow Dividend Leaders Index, which uses an objective, rules-based methodology. It will include 40 to 100 U.S. companies at any given time and rebalance quarterly.
“We evaluate free cash flow in totality, not only looking at trailing but more importantly, by evaluating future free cash flows, which we believe enhances the dividend screen that is inclusive across all market segments,” said Kevin Kelly, CEO of Kelly Intelligence.
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