State Street Global Advisors has launched a “Quality Aristocrats” ETF range with the launch of two new funds for European investors.
The range offers exposure to companies that have a track record of long-term positive free cashflow (FCF) generation.
The SPDR S&P 500 Quality Aristocrats UCITS ETF and the SPDR S&P Developed Quality Aristocrats UCITS ETF will track companies that have at least 10 consecutive years of positive FCF, a high FCF margin and FCF return on invested capital.
By focusing quality companies, the tracker funds will aim to outperform their parent indices: the S&P 500 and S&P Developed LargeMidCap, respectively.
Rupert Watts, head of factors and dividends at S&P Dow Jones Indices, said: “We are pleased that State Street Global Advisors has selected our S&P Quality FCF Aristocrats Indices as the underlying benchmarks for its new exchange-traded funds.
“By focusing on companies that excel in long-term FCF generation, these indices are designed to primarily track high-quality firms and distinguish themselves from other FCF-based indices in the market, which are generally yield-focused and exhibit a strong value tilt.”
This article first appeared in our sister publication, Portfolio Adviser.
