Kelly US Cash Cow Leaders Index
Why Exposure to this Index
The strategy targets US companies with strong cash flows and healthy balance sheets. Free Cash Flow (FCF) Yield measures the amount of cash generated from the core operations of a company relative to its valuation.
The Kelly US Cash Cow Leaders Index seeks to provide total return by investing in a passively managed, concentrated portfolio of companies that generate a high free cash flow yield.
The Index uses an objective, rules-based methodology to provide exposure to mid- and large-capitalization U.S. companies with high free cash flow yields. Companies with high free cash flow yields are commonly referred to as “cash cows”.
- Designed to capitalize on companies s to provide capital appreciation over time by screening the Morningstar US Large-Mid Cap Index for the top sixty-five companies based on free cash flow yield.
- The initial index universe is derived from the component companies of the Morningstar US Large-Mid Cap Index.
- Free cash flow is the cash remaining after a company has paid expenses, interest, taxes, and long-term investments. It can be used to buy back stock, pay dividends, or participate in mergers and acquisitions.
- The ability to generate a high free cash flow yield indicates a company is producing more cash than it needs to run the business and can invest in growth opportunities.