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Is Pacer US Cash Cows 100 ETF (COWZ) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Pacer US Cash Cows 100 ETF (COWZ - Free Report) debuted on 12/16/2016, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
COWZ is managed by Pacer Etfs, and this fund has amassed over $15.62 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, COWZ seeks to match the performance of the Pacer US Cash Cows 100 Index.
The Pacer US Cash Cows 100 Index uses an objective, rules-based methodology to provide exposure to large and mid-capitalization U.S. companies with high free cash flow yields.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.49% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.04%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For COWZ, it has heaviest allocation in the Energy sector --about 38.10% of the portfolio --while Healthcare and Materials round out the top three.
When you look at individual holdings, Chevron Corp New (CVX - Free Report) accounts for about 2.67% of the fund's total assets, followed by Marathon Pete Corp (MPC - Free Report) and Valero Energy Corp (VLO - Free Report) .
COWZ's top 10 holdings account for about 22.31% of its total assets under management.
Performance and Risk
So far this year, COWZ has added about 9.76%, and is up about 16.52% in the last one year (as of 10/18/2023). During this past 52-week period, the fund has traded between $44.01 and $51.65.
COWZ has a beta of 1.09 and standard deviation of 19.77% for the trailing three-year period. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Cash Cows 100 ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $48.47 billion in assets, Vanguard Value ETF has $99 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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 - Large 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 Cash Cows 100 ETF (COWZ) a Strong ETF Right Now?
A smart beta exchange traded fund, the Pacer US Cash Cows 100 ETF (COWZ - Free Report) debuted on 12/16/2016, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
COWZ is managed by Pacer Etfs, and this fund has amassed over $15.62 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, COWZ seeks to match the performance of the Pacer US Cash Cows 100 Index.
The Pacer US Cash Cows 100 Index uses an objective, rules-based methodology to provide exposure to large and mid-capitalization U.S. companies with high free cash flow yields.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.49% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.04%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For COWZ, it has heaviest allocation in the Energy sector --about 38.10% of the portfolio --while Healthcare and Materials round out the top three.
When you look at individual holdings, Chevron Corp New (CVX - Free Report) accounts for about 2.67% of the fund's total assets, followed by Marathon Pete Corp (MPC - Free Report) and Valero Energy Corp (VLO - Free Report) .
COWZ's top 10 holdings account for about 22.31% of its total assets under management.
Performance and Risk
So far this year, COWZ has added about 9.76%, and is up about 16.52% in the last one year (as of 10/18/2023). During this past 52-week period, the fund has traded between $44.01 and $51.65.
COWZ has a beta of 1.09 and standard deviation of 19.77% for the trailing three-year period. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Cash Cows 100 ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $48.47 billion in assets, Vanguard Value ETF has $99 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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 - Large 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.