What happened

An SEC filing on July 2, 2025, showed Crumly & Associates sold 155,440 shares of Distillate Small/Mid Cash Flow ETF (DSMC 1.32%), totaling $4.98 million in transaction value. After the trade, the fund’s remaining stake in Distillate Small/Mid Cash Flow ETF was worth $1.04 million, according to the 13F report.

What else to know

Distillate Small/Mid Cash Flow ETF weight in the portfolio dropped sharply post-sale, now representing 0.25% of AUM.

Top five holdings after the filing:

1. JPMorgan Active Growth ETF (JGRO): $28.9 million (7% of AUM)
2. First Trust Rising Dividend Achievers ETF (RDVY): $22 million (5.3% of AUM)
3. Distillate U.S. Fundamental Stability & Value ETF (DSTL): $19.9 million (4.9% of AUM)
4. JPMorgan Ultra-Short Income ETF (JPST): $18 million (4.4% of AUM)
5. iShares Currency Hedged MSCI EAFE ETF (HEFA): $16.2 million (3.9% of AUM)

Other things to know about this ETF:

• DSMC stock closed at $33.91 on July 8, 2025.
• One-year stock price change: Down 1.3% with a 13-percentage-point alpha to the S&P 500 over the comparable period.
• The share price remains 11.9% below the 52-week high.

Company overview

Note: Data in the chart is current as of market close on July 8, 2025.

Company snapshot

• Provides exposure to small- and mid-cap U.S. equities
• Uses an active management strategy focused on cash flow metrics
• Targets investors seeking diversified equity exposure

Distillate Small/Mid Cash Flow ETF offers investors access to a portfolio of small- and mid-cap U.S. equities. It generates revenue by managing assets and collecting management fees from investors in the ETF. The fund employs an active management strategy to identify companies within the lowest 15% of U.S. market capitalization. DSMC's competitive edge lies in its disciplined focus on cash flow metrics, which may appeal to investors seeking quality exposure within the small- and mid-cap segments.

Foolish take

While most ETFs track an underlying benchmark such as an index, the Distillate Small/Mid Cash Flow ETF is an actively managed fund. Since that means the portfolio managers decide which securities to invest in and when to rebalance the fund, these funds can be riskier than passively managed ETFs. Moreover, the Distillate Small/Mid Cash Flow ETF invests only in small-and mid-cap stocks, which tend to be more volatile. As of May 27, 2025, the Fund considered companies whose market capitalization was in the “lowest 10% of the total market capitalization of the U.S. equity market,” or below or equal to around $12 billion.

That said, the Distillate Small/Mid Cash Flow ETF fund managers aim to beat the markets by identifying companies based on two “fundamental factors,” indebtedness and valuation. In other words, the fund avoids companies with high debt, and it invests in ones that look undervalued based on free-cash-flow metrics using Distillate’s proprietary measure. This approach filters out speculative stocks, and therefore risk, to some extent.

As of June 30, the Distillate Small/Mid Cash Flow ETF owned nearly 150 small-and mid-cap stocks, and some of its top holdings include stocks like TopBuild Corp., Sterling Infrastructure, and Skyworks Solutions.

Glossary

• ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding a basket of assets like stocks or bonds.
• 13F Filing: A quarterly report required by the SEC showing institutional investment holdings over $100 million.
• AUM (Assets Under Management): The total market value of assets that an investment firm manages on behalf of clients.
• Active Management: An investment strategy where managers make specific buy or sell decisions to outperform a benchmark.
• Small/Mid Cap: Companies with relatively small or medium total market values, typically below large-cap firms.
• Portfolio Weight: The percentage of a specific asset or holding relative to the total value of a portfolio.
• Moving Average: The average price of a security over a set period, used to identify trends.
• Alpha: A measure of an investment's performance compared to a benchmark, indicating value added or subtracted.
• SEC (Securities and Exchange Commission): The U.S. government agency regulating securities markets and protecting investors.
• Reportable Holdings: Investments that must be disclosed to regulators, often due to size or regulatory requirements.
• Transaction Value: The total dollar amount involved in a buy or sell transaction.
• Stake: The ownership interest or share an investor holds in a particular asset or company.