Pacer ETFs, begun trading a new US Cash Cows ETF, the Pacer US Cash Cows 100 ETF (Bats: COWZ), on Monday, December 19, 2016. Here is a synopsis of the new ETF:
FUND INFORMATION:
| Symbol: COWZ | Exchange: BATS |
| Name: Pacer US Cash Cows 100 ETF | Net Expense Ratio: 0.49% |
FUND OBJECTIVE:
The Pacer US Cash Cows 100 ETF seeks to track the total return performance, before fees and expenses, of the Pacer US Cash Cows 100 Index.
REFERENCE INDEX:
The Pacer US Cash Cows 100 Index is based on a proprietary methodology developed by Index Design Group, an affiliate of Pacer Advisors, Inc., the Fund’s investment adviser.
The Index uses an objective, rules-based methodology to provide exposure to large and mid-capitalization U.S. companies with high free cash flow yields. Companies with high free cash flow yields are commonly referred to as “cash cows”. The initial index universe is derived from the component companies of the Russell 1000 Index. The initial universe of companies is screened based on their average projected free cash flows and earnings (if available) over each of the next two fiscal years. Companies with no forward year estimates available for free cash flows or earnings will remain in the Index universe. Companies with negative average projected free cash flows or earnings are removed from the Index universe. Additionally, financial companies, other than real estate investment trusts (REITs), are excluded from the Index universe. The remaining companies are ranked by their free cash flow yield for the trailing twelve month period. The equity securities of the 100 companies with the highest free cash flow yield are included in the Index. At the time of each rebalance of the Index, the companies included in the Index are weighted in proportion to their trailing 12 month free cash flow, and weightings are capped at 2% of the weight of the Index for any individual company. As of December 8, 2016, the companies included in the Index had a market capitalization of $1.48 billion to $598.3 billion. The index is reconstituted and rebalanced quarterly as of the close of business on the 3rd Friday of March, June, September, and December based on data as of the 1st Friday of the applicable rebalance month.
Ιndex Top Holdings (12/08/16):
Name |
Weight |
FCF Yield |
| United Continental Holdings, Inc. | 2.71% | 9.75% |
| Delta Air Lines, Inc. | 2.63% | 9.62% |
| Southwest Airlines Co. | 2.47% | 5.48% |
| Valero Energy Corporation | 2.37% | 8.53% |
| Boeing Company | 2.26% | 8.42% |
| LyondellBasell Industries NV | 2.16% | 6.55% |
| Nordstrom, Inc. | 2.15% | 5.64% |
| HP Inc. | 2.12% | 13.50% |
| QUALCOMM Incorporated | 2.06% | 7.27% |
| VMware, Inc. Class A | 2.03% | 8.45% |
Index Sector Breakdown (12/08/16):
| Information Technology | 24.86% |
| Industrials | 20.51% |
| Consumer Discretionary | 18.81% |
| Health Care | 11.65% |
| Real Estate | 7.02% |
| Materials | 6.67% |
| Energy | 6.03% |
| Consumer Staples | 2.81% |
| Telecommunication Services | 1.64% |
Useful Links:
COWZ Home Page
ETFtrack comment:
Here is a comment from Sean O’Hara, President of Pacer ETF Distributors:
“The Pacer US Cash Cows strategy captures an innovative and relatively untapped segment of the market by focusing on US companies with a high free cash flow yield and we’re incredibly excited to make it available to individual investors and advisors. High quality, high free-cash-flow yielding companies are an important part of a well-balanced portfolio because of their ability to sustain and grow income while also providing an opportunity for capital appreciation over time.”