Distillate Files 130/30 Long/Short ETF Using Free Cash Flow Valuations

Distillate Capital has filed for the Distillate Long/Short Equity ETF (DSLS), an actively managed 130/30 strategy focused primarily on U.S. large-cap stocks. The fund will rank companies using Distillate’s proprietary valuation framework, which compares normalized free cash flow with enterprise value to identify stocks it views as undervalued or overvalued. DSLS will generally hold about 100 equally weighted long positions representing roughly 130% of assets and 100 short positions totaling about 30%, leaving net U.S. equity exposure near 100%. Companies must first meet liquidity requirements and have reliable free cash flow estimates. The portfolio will typically be re-ranked and rebalanced quarterly, with additional adjustments possible when market conditions warrant. Distillate expects the strategy to have significant exposure to the energy and healthcare sectors.