It's a pretty common event on the ASX for a new exchange-traded fund (ETF) to be launched. Many of them tend to be funds that ASX growth investors might find appealing.
Over the past two years, we have seen the number of ASX ETFs continue to swell, reflecting the seemingly insatiable ASX appetite for passive investments. Since the start of 2022, we've welcomed the Global X Cybersecurity ETF (ASX: BUGG), the BetaSahres Global Uranium ETF (ASX: URNM), the Global X US 100 ETF (ASX: N100) and the BetaShares Global Roytalies ETF (ASX: ROYL).
But the latest ETF to hit the ASX is a little different. Rather than focusing on a specific sector or commodity, it instead looks to a company's financials to determine membership.
Last week, the ASX welcomed the debut of the BetaShares Global Cash Flow Kings ETF (ASX: CFLO).
If you love growth shares, this ETF might be worth a look
According to the provider, this Global Cash Flow Kings ETF tracks an index that comprises "200 global companies that demonstrate strong free cash flow".
You can read more about cash flow here, but in essence, this financial metric reflects how much money a company has after it brings in revenue and pays its expenses. The more of this positive cash flow a company has, the more capital it has at its disposal to fund expansion or shareholder returns.
BetaShares argues that "companies that generate high levels of free cash flow historically have tended to outperform broad global equity benchmarks over the medium to long term [and]… demonstrate strong and consistent free cash flow generation, growth of free cash flow, and relatively low levels of debt".
This arguably makes this CFLO ETF a top option for investors interested in growth shares to consider.
Breaking down this ETF's portfolio, we can see that it is indeed tilted towards mostly US growth shares. US stocks make up 68.2% of its overall portfolio, with names like Microsoft, Adobe, Visa, Tesla, Google-owner Alphabet and Ozempic manufacturer Novo Nordisk.
But we also have other companies in the fund as well that aren't traditionally thought of as growth stocks. These include Procter & Gamble, Chevron and British American Tobacco.
Breaking down the BetaShares Global Cash Flow Kings ETF
But let's get down to some performance metrics. Although this ETF only debuted on the ASX earlier this month, the index it tracks (the Solactive Global ex-Australia Cash Flow Kings Index) has been around a lot longer.
As of 31 October, this index has delivered a return of 22.27% per annum. It has also delivered an average annual return of 14.84% per annum over the past three years, 13.96% per annum over the past five and 14.39% over the past ten.
The BetaShares Global Cash Flow Kings ETF charges a management fee of 0.4% per annum. That's $40 a year for every $10,000 invested.
