Description

This passively managed ETF aims to construct a portfolio of high-caliber U.S. equities, focusing on large and mid-sized companies. From a universe comprising the thousand largest U.S. stocks, eligible companies are assessed and ranked within their specific industry sectors using a comprehensive quality metric, which is then adjusted for company size. This quality metric is derived from a weighted average of three core financial indicators: free cash flow margin, return on invested capital, and the consistency of free cash flow. However, for banking institutions, Return on Equity (ROE) and the debt-to-asset ratio are utilized in place of these standard metrics. The resulting portfolio, typically holding between 60 and 100 different stocks, is strategically weighted to emphasize sectors demonstrating superior return on invested capital. Its underlying index undergoes rebalancing twice a year.