DSTL ETF

The Distillate U.S. Fundamental Stability & Value ETF blends primary and peripheral factors to optimize value-investing. The fund's methodology focuses on high-quality value stocks with high free cash flow yields, low debt, and stable cash flows. DSTL has historically outperformed the SPDR S&P 500 ETF Trust, illustrating its ability to generate excess returns.

DSTL ETF filters out lower-quality companies based on financial measures and primarily uses free cash flow to gauge valuations. Portfolio consists of stable businesses in healthcare and industrial sectors, avoiding mega caps. DSTL has performed on par with benchmarks over the past 5 years, offering diversification and reasonable valuations without lower-quality companies.

Distillate U.S. Fundamental Stability & Value ETF is a fund focused on cash flow generation, screening for stable, profitable companies with low debt ratios and attractive valuations. The DSTL fund holds about 100 large-cap US stocks, with a diverse sector mix and top positions in Health Care, offering a different dynamic from passive benchmarks. DSTL has outperformed similar funds in the past two years, but the active approach may not continue to outperform in all market conditions.

The goal of the Distillate U.S. Fundamental Stability & Value ETF is to offer investors access to discounted stocks with consistent cash flow, using a unique algorithm to choose stocks based on stability and value criteria. While the ETF has outperformed the market since its launch in 2018, potential investors should carefully consider the long-term effects.

DSTL, an actively managed vehicle focused on top-quality U.S. stocks with copious free cash flows, has reconstituted its portfolio since my December note. DSTL has become more attractive from a valuation standpoint, with quality definitely remaining robust. Unfortunately, there is something to dislike about growth. I am of the opinion that there are ample reasons for a Buy rating.

DSTL is an actively managed FCF-focused ETF, prioritizing fundamental stability and value. DSTL has an exceedingly convincing performance track record, as it beat IVV in 33 out of 61 of its full trading months since its launch in October 2018. There is a solid factor mix under the hood, with a plethora of adequately valued, cash-rich names with low leverage and impressive capital efficiency.