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Fundamental indices can outperform over short periods but you aren't getting the long track record you get with a market cap weighted index. Also arguably a low interest rate environment favours cash cows because they are seen as bond proxies and they may not do as well in a somewhat higher interest rate environment and cash cows also generally are mature or declining business with their growth behind them. A basic FCF calculation also penalizes companies that are making growth investments through their P+L (e.g. marketing expenses, research expenses) or intentionally keeping prices low to increase market share (e.g. Amazon). 

 

 

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