When profits run ahead of cash | FTSE Russell Index Ideas

In this episode of FTSE Russell Index Ideas, Matt Monach, senior manager of equity quant research and index design at FTSE Russell, looks at the equity quality factor, which combines measures of profitability and leverage. He discusses the striking recent divergence between profits and cash flow amidst the heavy infrastructure spending on the artificial intelligence (AI) boom. Our FTSE Russell Index Ideas podcast series brings you insights into how our indices and benchmarks are built and why. We explore index ideas that can help you address real-world investment challenges. 01:17 What is the quality factor? 03:11 How does FTSE Russell measure the quality factor? 04:44 Why have tech companies historically scored highly on the quality factor 06:43 Why tech company accruals are at record levels 09:25 2027 and Beyond: Will Tech’s AI Spending Pay Off? 15:04 What index users can do to downsize large tech bets? Watch the full series here: https://www.youtube.com/playlist?list=PLs_YjOh3pCYiJlgj7gxsEqG5l84Cyo1Sz To listen on your preferred podcast platform go to https://pod.link/1824483218 Subscribe now for more videos like this one @LSEGplc If you have any questions about this episode, financial markets or the economy, please leave us a comment or email [email protected]. Follow FTSE Russell: https://x.com/ftserussell https://www.linkedin.com/company/ftse/ LSEG (London Stock Exchange Group) is a diversified international markets infrastructure business —earning our clients’ trust for over 300 years. That legacy of customer-focused excellence ensures that you can rely on our expertise in capital formation, intellectual property and risk and balance sheet management. As global leaders in financial indexing, benchmarking and analytic services, we offer unrivalled access to international capital markets. Our high-performance technology solutions enable companies worldwide to access funds for growth and development. And with our Data & Analytics, Capital Markets and Post Trade divisions, we provide a comprehensive, integrated suite of trusted financial market infrastructure services that help our customers pursue—and achieve—their ambitions. That’s how we make a difference— ensuring people can meet their potential—worldwide. Follow us on LinkedIn (linkedin.com/company/london-stock-exchange-group) and Twitter (@LSEGplc).