etf
We screened 18 exchanges for quality stocks held by fewer than 10 ETFs. Only Germany produced competitive returns (9.23% CAGR). The US returned 0.90%. Six exchanges had zero qualifying stocks. The orphan thesis is a global negative result.
quality investing
We screened for companies that grew FCF in 4+ of the last 5 years with ROIC above 15% and backtested on US stocks from 2000-2025. 12.15% CAGR vs 7.85% for SPY. 68% win rate, 51.2% down capture, invested 23 of 25 years.
income quality
We tested the Sloan accrual anomaly on US stocks from 2000 to 2025. Companies generating 20%+ more cash than reported profit returned 8.7% annually vs 4.7% for accrual-heavy stocks. The 4.0% annual spread has survived 30 years of academic scrutiny.
quality investing
We screened XETRA for FCF compounders from 2000-2025. 8.84% CAGR vs 5.04% for the DAX with 20 invested years out of 25. Germany's industrial cash discipline beats the local benchmark by 3.80% annually.
roic
We screened US stocks for ROIC above 12% in 3+ of the last 5 fiscal years. Over 25 years, the sustained ROIC portfolio returned 9.27% annually vs 7.33% for the S&P 500. Modest alpha, but 74.2% down capture and -33.1% max drawdown tell the real story.
etf
Germany is the one market where quality stocks ignored by ETFs actually work. 9.23% CAGR, 0.460 Sharpe, -29.26% max drawdown over 20 years. The Mittelstand's structural ETF blind spot creates a genuine opportunity.
quality investing
We ran the FCF Compounders screen on 18 exchanges from 2000-2025 with local benchmarks. US led at 12.15% CAGR (+4.29% vs S&P 500). UK +9.48% vs FTSE. India trails Sensex by 6.14% annually. Only deep markets work.
income quality
We tested income quality (OCF/NI) on 25 years of SAO data. High IQ returned 12.5% CAGR with a 72% win rate vs SPY and 44.6% down capture. But medium IQ (17.4%) beat high IQ by 5% per year. The spread vs low quality is +8.1%. Cash conversion matters in Brazil, just not the way you'd expect.
income quality
We tested income quality (OCF/NI) on 25 years of KSC data. The medium quality basket (7.1% CAGR) beat the high quality basket (5.5%). The signal works as a filter against low quality (1.4% CAGR) but the top tier underperforms, likely due to chaebol cash flow structures.
income quality
We tested income quality (OCF/NI) on 25 years of JSE data. High IQ returned 16.6% CAGR with +8.91% alpha. Low IQ lost 5.6% per year. The 22.1% spread is the widest globally. But the high IQ basket averaged just 10 stocks, so interpret with caution.
income quality
We tested income quality (OCF/NI) on 25 years of Stockholm exchange data. High IQ returned 8.7% CAGR, beating medium (3.8%) and low (4.2%). Clean monotonic ranking, +4.5% spread. But 130% down capture and 1.057 beta mean higher volatility than SPY.
income quality
We tested income quality (OCF/NI) on 25 years of LSE data. The spread between high and low quality is just 0.5% per year. All three buckets returned nearly identical CAGRs. The UK market is too cash-generative for this signal to separate.