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 3/31/20201
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 March 2020 quarterly rebalance.
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Top 100 small-cap companies with the highest free cash flow yield.
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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.
Performance
as of 3/31/2020
| Since Fund Inception (6/16/17) | YTD | 1 Year | 3 Year | 5 Year | ||||
|---|---|---|---|---|---|---|---|---|
| Pacer US Small Cap Cash Cows 100 ETF NAV | -10.69 | -35.46 | -29.63 | N/A | N/A | |||
| Pacer US Small Cap Cash Cows 100 ETF Market Price | -10.62 | -35.13 | -29.43 | N/A | N/A | |||
| Pacer US Small Cap Cash Cows Index | -10.60 | -35.53 | -29.67 | N/A | N/A | |||
| S&P SmallCap 600 Index | -6.15 | -32.64 | -25.89 | -5.34 | 0.45 | |||
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Source: US Bank and S&P. |
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Top 10 Holdings (%)
as of 6/30/17
View All Holdings
| Ticker | Holding | Weight |
|---|
Sector Breakdown (%)
as of 3/31/2020
| Sector | Weight |
|---|---|
| Industrials | 26.01 |
| Consumer Discretionary | 23.94 |
| Information Technology | 16.00 |
| Materials | 14.42 |
| Health Care | 9.79 |
| Consumer Staples | 5.35 |
| Energy | 2.67 |
| Real Estate | 1.22 |
| Communication Services | 0.60 |
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.
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 $2.1 billion USD. The index does not overlap holdings with the S&P 500 or S&P MidCap 400.
Pacer US Small Cap Cash Cows Index (the Index) is the property of Index Design Group, LLC which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) to calculate and maintain the Index. The Index is not sponsored by S&P Dow Jones Indices or its affiliates or its third party licensors (collectively, S&P Dow Jones Indices). S&P Dow Jones Indices will not be liable for any errors or omissions in calculating the Index. Calculated by S&P Dow Jones Indices and the related stylized mark(s) are service marks of S&P Dow Jones Indices and have been licensed for use by Index Design Group, LLC. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (SPFS), and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones).
Index Characteristics
as of 3/31/2020
| Pacer US Small Cap Cash Cows Index | S&P SmallCap 600 Index | ||
|---|---|---|---|
| Weighted Average Market Cap ($mil) | 906.82 | 1,557.35 | |
| Dividend Yield (%) | 2.55 | 2.46 | |
| Free Cash Flow Yield (%) | 14.73 | 4.20 | |
| Price/Earnings (P/E) Ratio | 7.40 | 13.20 |
Distributions
| Ex Date | Total Distributions | Ordinary Income* | Short Term Capital Gains | Long Term Capital Gains | Return of Capital | |||
|---|---|---|---|---|---|---|---|---|
| 6/22/2020 | $0.01085660 | $0.01085660 | $0 | $0 | $0 | |||
| 3/23/2020 | $0.08387941 | $0.08387941 | $0 | $0 | $0 | |||
| 12/24/2019 | $0.04989884 | $0.04989884 | $0 | $0 | $0 | |||
| 6/25/2019 | $0.13480381 | $0.13480381 | $0 | $0 | $0 | |||
| 3/26/2019 | $0.08433717 | $0.08433717 | $0 | $0 | $0 | |||
| 12/24/2018 | $0.10487600 | $0.10487600 | $0 | $0 | $0 | |||
| 9/25/2018 | $0.09184090 | $0.09184090 | $0 | $0 | $0 | |||
| 6/26/2018 | $0.04149140 | $0.04149140 | $0 | $0 | $0 | |||
| 3/27/2018 | $0.08494546 | $0.08494546 | $0 | $0 | $0 | |||
| 12/27/2017 | $0.11804 | $0.11804 | $0 | $0 | $0 | |||
| 9/26/2017 | $0.06378820 | $0.06378820 | $0 | $0 | $0 | |||
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Past distributions are not indicative of future distributions. |
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Premium/Discount
As of Jul 10, 2020
| As of Date | Discount Premium |
|---|---|
| 01/02/2020 | -0.2 |
| 01/03/2020 | 0.06 |
| 01/06/2020 | -0.02 |
| 01/07/2020 | 0.14 |
| 01/08/2020 | -0.05 |
| 01/09/2020 | 0.06 |
| 01/10/2020 | 0.09 |
| 01/13/2020 | -0.07 |
| 01/14/2020 | -0.09 |
| 01/15/2020 | -0.04 |
| 01/16/2020 | 0.07 |
| 01/17/2020 | 0.07 |
| 01/21/2020 | -0.06 |
| 01/22/2020 | 0.09 |
| 01/23/2020 | 0.01 |
| 01/24/2020 | -0.08 |
| 01/27/2020 | 0.13 |
| 01/28/2020 | 0.11 |
| 01/29/2020 | -0.03 |
| 01/30/2020 | -0.08 |
| 01/31/2020 | -0.04 |
| Next | |
CALF Premium/Discount Q3 2020
| As of Date | Discount Premium |
|---|---|
| 07/01/2020 | 0.03 |
| 07/02/2020 | -0.11 |
| 07/06/2020 | 0.08 |
| 07/07/2020 | -0.03 |
| 07/08/2020 | -0.21 |
| 07/09/2020 | 0.19 |
| 07/10/2020 | 0.13 |
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Pacer US Small Cap Cash Cows 100 ETF Factsheet
as of 3/31/20
Category: Cash Cows Series, CALF
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Free Cash Flow as a Proven Measurement of Quality
as of 12/31/19
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW
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Institutional Presentation: Pacer Cash Cows Index ETF Strategies
as of 3/31/20
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL
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Pacer ETFs Performance
as of 5/31/20
Category: Trendpilot Series, PTLC, PTMC, PTNQ, PTEU, PTIN, TRND, PTBD, Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL, HERD, Leaders Series, PEXL, Pacer Custom Series, PWS, VETS, SRVR, INDS, RTL, SZNE, USAI
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The Case for Small Cap, Quality and Value.
March 2019
Category: Cash Cows Series, CALF
One of the most popular asset classes available to investors has been the small cap value space. Small cap companies are those with somewhat smaller market capitalization, which can range from just $300 million to $2 billion.
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The Power of Free Cash Flow Yield
December 2019
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW
Valuation metrics offer investors a simple way to assess a company’s worth by looking at its sales, earnings and cash flow.
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Value Stocks - Not the Bargain They Used to Be.
May 2018
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW
Following age old investing advice to buy low, value stocks are appealing to most investors because of their potentially attractive prices below fair value.
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Pacer Cash Cows ETF Series
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL, HERD
Educational Videos
Duration: 2:51
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Cash Cows in 1 Minute
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL, HERD
Educational Videos
Duration: 1:00
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Pacer Cash Cows Index Series 2019 Q4 Quarterly Rebalance
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL
Institutional Presentation Videos
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Pacer Cash Cows Index Series 2019 Q3 Quarterly Rebalance
Category: Cash Cows Series, COWZ, CALF, BUL
Institutional Presentation Videos
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Pacer Cash Cows Index Series 2019 Q2 Quarterly Rebalance
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL
Institutional Presentation Videos
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Pacer Cash Cows Index Series 2019 Q1 Quarterly Rebalance
Category: Cash Cows Series, COWZ, CALF
Institutional Presentation Videos
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Cash Cows Update April 2, 2020 Webinar
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL
Institutional Presentation Videos
Duration: 45:15
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Cash Cows Update April 16, 2020 Webinar
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL
Institutional Presentation Videos
Duration: 42:53
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Cash Cows Update June 9, 2020 Webinar
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL
Institutional Presentation Videos
Duration: 43:01