The Cash Cows ETF Series

CALF

Pacer US Small Cap Cash Cows 100 ETF

A strategy driven exchange traded fund that aims to provide capital appreciation over time by screening the S&P SmallCap 600® for the top 100 companies based on free cash flow yield.

Cash Cows Index Strategy

  • Free cash flow is the cash remaining after a company has paid expenses, interest, taxes, and long-term investments. It can be used to buy back stock, pay dividends, or participate in mergers and acquisitions.
  • The ability to generate a high free cash flow yield indicates a company is producing more cash than it needs to run the business and can invest in growth opportunities.
  • Small-cap companies offer a variety of opportunities
    including exposure to companies with higher growth
    that are often under-researched.
  • Watch to learn more about how Pacer Cash Cows Index ETFs work.




Free Cash Flow Yield Comparison (as of 6/30/17)1

1. High Quality Small-Cap Companies
Unique focus on quality small-cap companies with high free cash flow yield.
 

2. Trading at a Discount
Exposure to opportunities in the market where high quality stocks are trading at a discount.


3. Long-Term Capital Appreciation
Using free cash flow yield to measure the sustainability of a company may produce potentially higher returns and more attractive upside/downside capture over time.



 


 


Definitions
Free Cash Flow (FCF): A company’s cash flow from operations minus capital expenditures (expenses, interest, taxes, and long-term investments)
Enterprise Value (EV): A company’s market capitalization adjusted to eliminate any capital structure bias (i.e. by adding debt and subtracting cash or cash equivalents)
Free Cash Flow Yield: FCF/EV. Measures a company’s total free cash flow relative to its enterprise value. This is an internal statistic and does not constitute investor yield.
Upside/Downside capture: Upside/downside capture ratio show you whether a given fund has outperformed--gained more or lost less than--a broad market benchmark during periods of market strength and weakness


Pacer US Small Cap Cash Cows Strategy Overview

An objective rules-based methodology that uses a quality screen to select top companies in the index universe.
All data as of June 2017 quarterly rebalance.

Top 100 small-cap companies with the highest free cash flow yield.

  • Weighted by free cash flow (highest trailing twelve month)
  • Holdings capped at 2% for each company at time of rebalance
  • Reconstituted and rebalanced quarterly

Pacer US Small Cap Cash Cows Index Characteristics

as of 6/30/17

Weighted Average Market Cap ($mil) 1,145.13
Dividend Yield (%) 1.65
Free Cash Flow Yield (%) 9.92
Price to Earnings (P/E) Ratio 18.65

Source: FactSet

(1)The individual components of the index are weighted by their total market capitalization. Market capitalization is determined by multiplying each company’s market price by their total outstanding shares. Companies are ranked in descending order based on their market cap in dollars.
(2)All financial companies are excluded from the index universe. In addition, companies with negative free cash flow (FCF) are excluded based on FactSet analyst consensus estimates for average projected FCF and earnings over the next two years.
(3)The 3-year dividend growth is a weighted average of each company’s 3-year dividends per share growth rate. The growth rate is determined by measuring the change between each company’s most recent trailing 12 month dividends per share versus their trailing 12 month dividend per share 3 years ago.
(4)Remaining 100 companies are weighted by their trailing twelve month free cash flow. Free cash flow weighting is calculated as a company’s operating cash flow minus capital expenditures. Companies are ranked in descending order based on their free cash flow in dollars

P/E ratio a fundamental measure commonly used to determine if an investment is valued appropriately. Each holding’s P/E is the latest closing price divided by the latest fiscal year’s earnings per share. Negative P/E ratios are excluded from this calculation.

Current Holdings

Daily Holdings

Performance

as of 6/30/17

  Since Fund Inception (6/16/17) YTD 1-Year 3-Year 5-Year
Pacer US Small Cap Cash Cows 100 ETF NAV 2.97 - - - -
Pacer US Small Cap Cash Cows 100 ETF Market Price 3.31 - - - -
Pacer US Small Cap Cash Cows Index 2.96 - - - -
S&P SmallCap 600 Index 0.44 2.79 22.47 9.32 15.47

Monthly Performance

Source: US Bank and S&P.

This is a new Fund and therefore has limited performance to report. Performance quoted represents past performance and does not guarantee future results. Investment return and principal value will fluctuate, so shares may be worth more or less when redeemed or sold. Current performance may be lower or higher than the performance quoted. Visit http://www.paceretfs.com for the most recent month-end performance. Index returns are for illustrative purposes only. Index performance does not reflect any management fees, transaction costs or expenses. You cannot invest directly in an index.

The Pacer US Small Cap Cash Cows Index was released on 5/29/17.

 

Current Holdings

Daily Holdings

Index Characteristics

as of 6/30/17

  Pacer US Small Cap Cash Cows Index S&P SmallCap 600 Index
Weighted Average Market Cap ($mil) 1,145.13 1,766.74
Dividend Yield (%) 1.65 1.34
Free Cash Flow Yield (%) 9.92 3.49
Price/Earnings (P/E) Ratio 18.65 23.54

Top 10 Holdings (%)

as of 6/30/17

Pacer US Small Cap Cash Cows Index
Ticker Holding Weight Free Cash Flow Yield (%)
RH RH 2.37 6.45
CYH Community Health Systems Inc. 2.34 9.59
AMAG AMAG Pharmaceuticals Inc. 2.09 18.63
WWW Wolverine World Wide Inc. 2.07 8.91
CBL CBL & Associates Properties Inc. 2.06 9.97
LKSD LSC Communications Inc. 2.00 16.22
SBRA Sabra Health Care REIT Inc. 1.99 6.78
SANM Sanmina-SCI Corporation 1.97 7.38
ASNA Ascena Retail Group Inc. 1.94 14.87
UVV Universal Corp 1.92 11.78
Total 20.75

Sector Breakdown (%)

as of 6/30/17

  Weight
Consumer Discretionary 42.84
Information Technology 17.70
Industrials 15.65
Health Care 8.35
Materials 5.91
Real Estate 4.70
Consumer Staples 3.94
Energy 0.67
Telecommunication Services 0.24

Free cash flow yield measures a company’s total free cash flow relative to its enterprise value. This is an internal statistic and does not constitute investor yield. It is an internal statistic and does not constitute investor yield.
Dividend yield is calculated using the gross dividend of a security (i.e., before any applicable withholding tax). Special cash dividends, unless they are paid for three consecutive years, and capital repayments are excluded from the dividend yield calculation. There is no guarantee dividends will be paid.
Weighted average market cap is the sum of each company's weight multiplied by its market cap.
Dividend yield is calculated using the gross dividend of a security (i.e., before any applicable withholding tax). Special cash dividends, unless they are paid for three consecutive years, and capital repayments are excluded from the dividend yield calculation.
Price to earning ratio (P/E ratio) is a fundamental measure used to determine if an investment is valued appropriately. Each holding’s P/E is the latest closing price divided by the latest fiscal year’s earnings per share. Negative P/E ratios are excluded from this calculation.
Treasury yield is the interest rate on a given bond issued by the United States government.
S&P SmallCap 600® Index measures the performance of 600 small sized companies in the US equity market, with market capitalization ranging from $450 million to $2.1 billion USD. The index does not overlap holdings with the S&P 500 or S&P MidCap 400.

Pacer US Small Cap Cash Cows Index (the “Index”) is the property of Index Design Group, LLC which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) to calculate and maintain the Index.  The Index is not sponsored by S&P Dow Jones Indices or its affiliates or its third party licensors (collectively, “S&P Dow Jones Indices”).  S&P Dow Jones Indices will not be liable for any errors or omissions in calculating the Index. “Calculated by S&P Dow Jones Indices” and the related stylized mark(s) are service marks of S&P Dow Jones Indices and have been licensed for use by Index Design Group, LLC.  S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“SPFS”), and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”).

 

  • Pacer US Small Cap Cash Cows 100 ETF Factsheet

    Pacer US Small Cap Cash Cows 100 ETF Factsheet

    as of 6/30/17

    Category: Cash Cows Series, CALF

    Download

  • Free Cash Flow as a Proven Measurement of Quality

    Free Cash Flow as a Proven Measurement of Quality

    as of 6/30/17

    Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW

    Download

  • Pacer ETFs Performance

    Pacer ETFs Performance

    as of 8/31/17

    Category: General Material, PTLC, PTMC, PTNQ, PTEU, GCOW, COWZ, CALF, ICOW

    Download