SCHD - COWZ: Q1 2025 Index Shakeup Was The Biggest On Record
2025-03-25 23:14:00 ET
Summary
- COWZ's Index reconstituted after the close of business Friday, resulting in 73/100 substitutions in its biggest quarterly shakeup on record.
- Overall, I'm pleased with the changes. COWZ now holds higher quality stocks with better sales and earnings growth potential, and the slight sacrifice in value was well worth it.
- Still, COWZ's high turnover rate confirms the sensitivity of its free cash flow yield screen. Substituting two-thirds of your holdings in three months isn't normal for the typical value investor.
- While I like the changes, I don't trust the strategy. Therefore, I've assigned COWZ a "hold" rating, with a fundamental analysis comparing it with VFLO, FLOW, and COWS to follow.