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Is Pacer US Small Cap Cash Cows 100 ETF (CALF) a Strong ETF Right Now?
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The Pacer US Small Cap Cash Cows 100 ETF (CALF - Free Report) was launched on 06/16/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
CALF is managed by Pacer Etfs, and this fund has amassed over $3.69 billion, which makes it one of the larger ETFs in the Style Box - Small Cap Value. CALF, before fees and expenses, seeks to match the performance of the Pacer US Small Cap Cash Cows Index.
The Pacer US Small Cap Cash Cows Index uses an objective, rules-based methodology to provide exposure to small-capitalization U.S. companies with high free cash flow yields.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.59% for this ETF, which makes it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.26%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 24.80% of the portfolio, the fund has heaviest allocation to the Consumer Discretionary sector; Energy and Industrials round out the top three.
When you look at individual holdings, Par Pac Holdings Inc (PARR - Free Report) accounts for about 2.79% of the fund's total assets, followed by Consol Energy Inc New (CEIX - Free Report) and Sm Energy Co (SM - Free Report) .
CALF's top 10 holdings account for about 24.4% of its total assets under management.
Performance and Risk
The ETF has added about 14.66% so far this year and was up about 16.27% in the last one year (as of 10/19/2023). In the past 52-week period, it has traded between $34.60 and $43.90.
The ETF has a beta of 1.24 and standard deviation of 26.31% for the trailing three-year period. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Small Cap Cash Cows 100 ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $10.13 billion in assets, Vanguard Small-Cap Value ETF has $23.55 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Small Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Pacer US Small Cap Cash Cows 100 ETF (CALF) a Strong ETF Right Now?
The Pacer US Small Cap Cash Cows 100 ETF (CALF - Free Report) was launched on 06/16/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
CALF is managed by Pacer Etfs, and this fund has amassed over $3.69 billion, which makes it one of the larger ETFs in the Style Box - Small Cap Value. CALF, before fees and expenses, seeks to match the performance of the Pacer US Small Cap Cash Cows Index.
The Pacer US Small Cap Cash Cows Index uses an objective, rules-based methodology to provide exposure to small-capitalization U.S. companies with high free cash flow yields.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.59% for this ETF, which makes it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.26%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 24.80% of the portfolio, the fund has heaviest allocation to the Consumer Discretionary sector; Energy and Industrials round out the top three.
When you look at individual holdings, Par Pac Holdings Inc (PARR - Free Report) accounts for about 2.79% of the fund's total assets, followed by Consol Energy Inc New (CEIX - Free Report) and Sm Energy Co (SM - Free Report) .
CALF's top 10 holdings account for about 24.4% of its total assets under management.
Performance and Risk
The ETF has added about 14.66% so far this year and was up about 16.27% in the last one year (as of 10/19/2023). In the past 52-week period, it has traded between $34.60 and $43.90.
The ETF has a beta of 1.24 and standard deviation of 26.31% for the trailing three-year period. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Small Cap Cash Cows 100 ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $10.13 billion in assets, Vanguard Small-Cap Value ETF has $23.55 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Small Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.