Abacus FCF International Leadership ETF (TTAI)

Overview

The strategy described focuses on creating a diversified investment portfolio by selecting around 150 of the highest ranked securities. These securities are evaluated through Systematic Models which primarily assess the strength of a company's free cash flow. This method diverges from traditional market capitalization weighted approaches, opting instead for a modified market capitalization, log-weighted portfolio design. Such a strategy emphasizes giving greater exposure to companies that exhibit strong proprietary free cash flow rankings. By employing this approach, the portfolio aims to increase issuer diversification, potentially mitigating risk and optimizing returns compared to portfolios that are weighted solely by market capitalization.

Products and Services

• Modified Market Capitalization, Log-Weighted Portfolio

  This investment product leverages a unique approach to portfolio construction. Unlike traditional portfolios that weight securities based solely on their market capitalization, this product utilizes a modified market cap, log weighting method. By doing so, it aims to allocate a higher weighting to companies with robust free cash flow metrics, as identified by proprietary Systematic Models. The result is a strategic tilt towards firms that are deemed financially healthy and capable of sustaining growth, with the goal of enhancing returns for investors.

• Proprietary Free Cash Flow Ranking System

  The cornerstone of the investment strategy is its proprietary free cash flow ranking system. This methodology systematically assesses the free cash flows of companies to identify those with superior financial strength and growth potential. Investments are then selected and weighted based on these rankings. This approach is designed to surface investments that not only offer attractive valuation but also present a sustainable financial model, aiming to drive consistent performance in the portfolio.

• Enhanced Issuer Diversification

  By deviating from conventional market capitalization weighted strategies, the approach inherently promotes a broader issuer diversification within the portfolio. The systematic selection and weighting of securities based on the strength of their free cash flow allow for increased exposure across a variety of sectors and industries. This diversification is a deliberate attempt to lower risk by spreading investment across companies that exhibit financial soundness, thereby providing a safeguard against market volatility and sector-specific downturns.