For investors seeking momentum, Pacer US Small Cap Cash Cows 100 ETF (CALF Quick QuoteCALF - Free Report) is probably on radar. The fund just hit a 52-week high and is up 27.92% from its 52-week low price of $35.28/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:

CALF in Focus

The underlying 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. The fund has major allocations to the consumer discretionary sector, with 36.8% of the assets of the fund, followed by the industrial sector with 19.9%. The product charges 59 bps in annual fees (See: all the Small Cap Value ETF here).

Why the Move?

Small-cap stocks are closely connected to the domestic economy because their capitalization is influenced by how well the domestic economy is doing. A stronger-than-anticipated third-quarter 2023 performance by the U.S. economy and cooling inflation levels are the key tailwinds for the fund. The broad market index, the S&P 500, set the record high of 2023, driven by optimism that the Fed is done with interest rate hikes. This gave a boost to the prospects of the fund.

More Gains Ahead?

Currently, CALF has a Zacks ETF Rank #3 (Hold). However, it might continue its strong performance in the near term, with a positive weighted alpha of 23.53, which gives cues of a further rally.