Evaluating the Pacer US Cash Cows 100 ETF (COWZ) as a Sustainable Investment Option

The Pacer US Cash Cows 100 ETF (COWZ) offers smart beta exposure to the large cap value market, launched in December 2016. It has over $23.23 billion in assets and aims to match the performance of its index, using a rules-based methodology that selects U.S. companies with high free cash flow yields. COWZ has an expense ratio of 0.49%, slightly above its peers. Its top sector allocations are in Energy, Consumer Discretionary, and Healthcare.

The Pacer US Cash Cows 100 ETF (COWZ) is a smart beta exchange-traded fund (ETF) launched on December 16, 2016, with the primary goal of providing broad exposure to the large cap value market segment [1]. This ETF has garnered significant attention due to its innovative approach to selecting companies based on high free cash flow yields. With over $23.23 billion in assets under management, COWZ is among the largest ETFs in the Style Box - Large Cap Value category [1].

Smart beta ETFs differ from market capitalization-weighted index funds in their approach to selecting stocks. Rather than being weighted based on market capitalization, these funds employ non-capitalization-based weighting methodologies. The Pacer US Cash Cows 100 ETF, for example, uses a rules-based methodology to identify U.S. companies with high free cash flow yields, making it a strong option for investors looking to choose stocks with a higher potential for risk-return performance [1].

The Pacer US Cash Cows 100 Index, which the fund aims to track, employs an objective, rules-based methodology to provide exposure to large and mid-capitalization U.S. companies with high free cash flow yields [1]. As of this writing, the top sectors in the ETF's portfolio are Energy, Consumer Discretionary, and Healthcare, respectively, accounting for approximately 29.90%, 16.40%, and 13.80% of the assets, respectively [1].

Despite its innovative approach and strong performance, the Pacer US Cash Cows 100 ETF has an expense ratio of 0.49%, which is slightly above its peers in the space [1]. However, this additional cost is offset by the potential for superior risk-adjusted returns that smart beta ETFs may offer.

In conclusion, the Pacer US Cash Cows 100 ETF is a smart beta ETF that provides broad exposure to the large cap value market segment by using a rules-based methodology to select U.S. companies with high free cash flow yields. With a strong performance, diversified sector allocations, and a relatively low expense ratio, COWZ is an attractive option for investors looking to minimize risk and potentially outperform the market.

References:
[1] Finance.yahoo.com. (2023, January 1). Pacer-us-cash-cows-100-etf (COWZ) - News & Analysis. Retrieved from https://finance.yahoo.com/news/pacer-us-cash-cows-100-112006659.html