Cash Cows Index Strategy
- Free cash flow is the cash remaining after a company has paid expenses, interest, taxes, and long-term investments. It is the source from which dividends are paid.
- The ability to generate a high free cash flow yield indicates that a company has the capacity to pay dividends. Paying a dividend signals management is confident in the long-term viability of the business.
- Dividends are a source of income to investors.
- Watch to learn more about how Pacer Cash Cows Index ETFs work.
Impact of Current Dividend Yield
as of 3/31/20201
1. Capital Appreciation
Using free cash flow yield to measure the sustainability of a company may produce a higher return with lower volatility over time.
2. Reduced Volatility
Companies with a high free cash flow yield and a high dividend yield have historically declined less in market downturns.
3. Yield
Companies with a high free cash flow yield are better positioned to grow and maintain their dividends, but there is no guarantee dividends will be paid.
(1)Dividend yield is the annual percentage of return earned by an investor on a common or preferred stock. The yield is calculated by dividing the amount of the 12 month dividends per share by the current market price per share of the stock. There is no guarantee dividends will be paid.
Source(s): FactSet
Pacer Global Cash Cows Strategy Overview
An objective rules-based methodology that uses a quality and value screens to select top companies in the index universe.
All data as of December 2019 semi-annual rebalance.
|
Top 100 companies with the highest free cash flow yield and highest dividend yield.
|
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)Financial companies, other than real estate investment trusts (REITs), are excluded from the Index universe. In addition, companies with negative free cash flow are excluded based on FactSet analyst consensus estimates for average projected FCF and earnings over the next two years.
(4)Remaining 100 companies are weighted by their trailing twelve month dividends. Dividend weighting is calculated by adding the 100 companies’ dividends and dividing the total by each company’s trailing 12 month dividends.
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)
(3)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.
Performance
as of 3/31/2020
| Since Fund Inception (2/22/16) | YTD | 1 Year | 3 Year | 5 Year | ||||
|---|---|---|---|---|---|---|---|---|
| Pacer Global Cash Cows Dividend ETF NAV | 1.11 | -27.03 | -22.13 | -3.55 | N/A | |||
| Pacer Global Cash Cows Dividend ETF Market Price | 0.87 | -27.67 | -22.91 | -4.01 | N/A | |||
| Pacer Global Cash Cows Dividend Total Return Index | 1.95 | -27.13 | -21.65 | -2.76 | N/A | |||
| Pacer Global Cash Cows Dividend Price Return Index | -2.25 | -28.18 | -25.53 | -6.91 | N/A | |||
| FTSE Developed Large-Cap Index | 7.65 | -19.62 | -8.01 | 3.31 | 4.39 | |||
|
Source: FTSE and US Bank. Total return is the actual rate of return of an investment over a given evaluation period. Total return includes interest, capital gains, dividends and distributions realized over a given period of time. |
||||||||
Top 10 Holdings (%)
as of 6/30/17
View All Holdings
| Ticker | Holding | Weight |
|---|
Sector Breakdown (%)
as of 3/31/2020
| Sector | Weight |
|---|---|
| Communication Services | 23.95 |
| Energy | 15.56 |
| Consumer Staples | 13.16 |
| Materials | 12.88 |
| Health Care | 12.07 |
| Consumer Discretionary | 6.61 |
| Industrials | 5.26 |
| Real Estate | 3.76 |
| Information Technology | 3.73 |
| Utilities | 3.02 |
Top 10 Country Breakdown (%)
as of 3/31/2020
| Country | Weight | ||
|---|---|---|---|
| United States | 29.98 | ||
| United Kingdom | 16.72 | ||
| Japan | 12.93 | ||
| Australia | 6.32 | ||
| Germany | 5.16 | ||
| Hong Kong | 5.05 | ||
| France | 3.17 | ||
| Italy | 2.98 | ||
| Spain | 2.71 | ||
| Canada | 2.53 |
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. There is no guarantee dividends will be paid.
FTSE Developed Large-Cap Index is a market-capitalization weighted index representing the performance of large-cap stocks in developed markets.
Source: FTSE International Limited ("FTSE") © FTSE 2016. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data and no party may rely on any FTSE indices, ratings and / or data underlying data contained in this communication. No further distribution of FTSE Data is permitted without FTSE’s express written consent. FTSE does not promote, sponsor or endorse the content of this communication.
Index Characteristics
as of 3/31/2020
| Pacer Global Cash Cows Dividend Index | FTSE Developed Large-Cap Index | ||
|---|---|---|---|
| Weighted Average Market Cap ($mil) | 61,963.62 | 221,350.32 | |
| Free Cash Flow Yield (%) | 7.53 | 4.23 | |
| Dividend Yield (%) | 6.97 | 2.94 | |
| Price/Earnings | 12.32 | 16.15 |
Distributions
| Ex Date | Total Distributions | Ordinary Income* | Short Term Capital Gains | Long Term Capital Gains | Return of Capital | |||
|---|---|---|---|---|---|---|---|---|
| 6/22/2020 | $0.16247039 | $0.16247039 | $0 | $0 | $0 | |||
| 3/23/2020 | $0.21529170 | $0.21529170 | $0 | $0 | $0 | |||
| 12/24/2019 | $0.34764103 | $0.34764103 | $0 | $0 | $0 | |||
| 9/24/2019 | $0.43245845 | $0.43245845 | $0 | $0 | $0 | |||
| 6/25/2019 | $0.28236187 | $0.28236187 | $0 | $0 | $0 | |||
| 3/26/2019 | $0.32146235 | $0.32146235 | $0 | $0 | $0 | |||
| 12/24/2018 | $0.25679 | $0.25679 | $0 | $0 | $0 | |||
| 9/25/2018 | $0.37688173 | $0.37688173 | $0 | $0 | $0 | |||
| 6/26/2018 | $0.24443164 | $0.24443164 | $0 | $0 | $0 | |||
| 3/27/2018 | $0.22295838 | $0.22295838 | $0 | $0 | $0 | |||
| 12/27/2017 | $0.22477 | $0.22477 | $0 | $0 | $0 | |||
| 9/26/2017 | $0.26317596 | $0.26317596 | $0 | $0 | $0 | |||
| 6/27/2017 | $0.21802782 | $0.21802782 | $0 | $0 | $0 | |||
| 3/28/2017 | $0.17259276 | $0.17259276 | $0 | $0 | $0 | |||
| 12/28/2016 | $0.22806600 | $0.22806600 | $0 | $0 | $0 | |||
| 9/13/2016 | $0.11591613 | $0.11591613 | $0 | $0 | $0 | |||
| 6/14/2016 | $0.17877886 | $0.17877886 | $0 | $0 | $0 | |||
|
Past distributions are not indicative of future distributions. |
||||||||
Premium/Discount
As of Jul 9, 2020
| As of Date | Discount Premium |
|---|---|
| 01/02/2020 | 0.17 |
| 01/03/2020 | -0.2 |
| 01/06/2020 | -0.06 |
| 01/07/2020 | -0.34 |
| 01/08/2020 | 0.14 |
| 01/09/2020 | 0.11 |
| 01/10/2020 | -0.18 |
| 01/13/2020 | -0.02 |
| 01/14/2020 | -0.04 |
| 01/15/2020 | -0.18 |
| 01/16/2020 | 0.02 |
| 01/17/2020 | 0.00 |
| 01/21/2020 | 0.01 |
| 01/22/2020 | -0.03 |
| 01/23/2020 | 0.52 |
| 01/24/2020 | -0.15 |
| 01/27/2020 | -0.38 |
| 01/28/2020 | -0.06 |
| 01/29/2020 | 0.07 |
| 01/30/2020 | 0.39 |
| 01/31/2020 | -0.2 |
| Next | |
GCOW Premium/Discount Q3 2020
| As of Date | Discount Premium |
|---|---|
| 07/01/2020 | -0.03 |
| 07/02/2020 | -0.03 |
| 07/06/2020 | -0.21 |
| 07/07/2020 | -0.38 |
| 07/08/2020 | -0.15 |
| 07/09/2020 | -0.23 |
-
Pacer Global Cash Cows Dividend ETF Factsheet
as of 3/31/20
Category: Cash Cows Series, GCOW
Download -
Free Cash Flow as a Proven Measurement of Quality
as of 12/31/19
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW
Download -
Institutional Presentation: Pacer Cash Cows Index ETF Strategies
as of 3/31/20
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL
-
A Systematic Withdrawal Plan Comparison
as of 3/31/20
Category: Cash Cows Series, GCOW
-
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
Download -
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.
Download -
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.
Download -
Jump on the European Bandwagon
May 2017
Category: Trendpilot Series, PTEU, GCOW
The European stock market began to see improvement in 2016 as bank lending increased and earnings grew.
Download -
Break from the herd. Consider free cash flow.
January 2017
Category: Cash Cows Series, GCOW, COWZ
The Department of Labor’s new fiduciary regulations require many financial advisors to change the way they do business.
Download -
Overcoming Home Country Bias and Seizing the Intl. Opportunity.
October 2016
Category: Cash Cows Series, GCOW
Based on our conversations with financial advisors, most admit they don’t have enough international exposure.
Download -
Don't Miss Opportunities Abroad. Globalize Your Portfolio.
September 2016
Category: Trendpilot Series, PTEU, Cash Cows Series, GCOW
A common piece of investment advice is to “invest in what you know.” This may be sound advice, but it limits investors to a small part of the market.
Download -
Finding Quality Investments in an Overcrowded Market
August 2016
Category: Cash Cows Series, GCOW
Given the recent market volatility, investors are searching for stability in their portfolios. Weak economic growth, a hawkish Fed and declining earnings are creating more urgency for this stability.
Download -
Global Opportunity for Dividends
April 2016
Category: Cash Cows Series, GCOW
In the current low interest rate environment, bonds and other fixed income products are not providing the same level of income they once did. As a result, investors are turning towards other opportunities like dividend stocks for income.
Download -
Pacer Cash Cows ETF Series
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL, HERD
Educational Videos
Duration: 2:51
-
Cash Cows in 1 Minute
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL, HERD
Educational Videos
Duration: 1:00
-
Pacer Cash Cows Index Series 2019 Q4 Quarterly Rebalance
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL
Institutional Presentation Videos
-
Pacer Cash Cows Index Series 2019 Q2 Quarterly Rebalance
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL
Institutional Presentation Videos
-
Cash Cows Update April 2, 2020 Webinar
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL
Institutional Presentation Videos
Duration: 45:15
-
Cash Cows Update April 16, 2020 Webinar
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL
Institutional Presentation Videos
Duration: 42:53
-
Cash Cows Update June 9, 2020 Webinar
Category: Cash Cows Series, GCOW, COWZ, CALF, ICOW, ECOW, BUL
Institutional Presentation Videos
Duration: 43:01