Insights From ETFs: Share Buyback: A Long-Term Outperformance Factor

1. What is share buyback? Share buyback or share repurchase is one of the key options in capital allocation that a company can choose to allocate cash flow in addition to paying dividends, implementing acquisitions, or paying down debt. In a share buyback, the issuing company repurchases its shares on the open market from any investor interested in selling, which reduces the amount of shares available, and increases the value of remaining shares. The purpose of a share buyback is...