Janet Johnston, Co-Chief Investment Officer, TrimTabs Asset Management discusses the firm’s approach to quality investing, the importance of free cash flow, and newly launched ETFs: DFNV and DFHY.
TrimTabs Asset Management is a boutique investment manager focused around delivering alpha at an affordable cost. Today, the firm centers its investment approach around identifying quality companies who demonstrate strong free cash flow and balance sheets. The first iteration of TrimTabs was founded in 1990 as an independent investment research firm and eventually became TrimTabs Asset Management, launching their first round of active free cash flow ETFs in 2016.
Recently, the firm partnered with tactical investment manager Donoghue Forlines, to launch two new rules-based ETFs, the TrimTabs Donoghue Forlines Risk Managed Innovation ETF (DFNV) and The TrimTabs Donoghue Forlines Tactical High Yield ETF (DFHY).
According the firm’s recently published white paper, The Power of Free Cash Flow, companies with a strong free cash flow have historically delivered outperformance with a reduced level of volatility, when compared to the broader market.
The TrimTabs US Free Cash Flow Quality ETF (TTAC) and TrimTabs International Free Cash Flow Quality ETF (TTAI) leverage a fundamental proprietary investment process and aim to provide investors exposure to high-quality stocks and generate alpha.
The firm’s newest ETFs, DFNV and DFHY were launched in December 2020. The TrimTabs Donoghue Forlines Risk Managed Innovation ETF (DFNV) provides risk-managed exposure to companies with both strong free cash flow and research and development (R&D) investment. The rules-based ETF aims to uncover high-quality stocks with an appetite for innovation and growth. The TrimTabs Donoghue Forlines Tactical High Yield ETF (DFHY), also managed by Donoghue Forlines, aims to provide exposure to the high yield bond market, with tactical downside protection.
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