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Should Pacer US Cash Cows 100 ETF (COWZ) Be on Your Investing Radar?
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Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Pacer US Cash Cows 100 ETF (COWZ - Free Report) is a passively managed exchange traded fund launched on 12/16/2016.
The fund is sponsored by Pacer Etfs. It has amassed assets over $18.10 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.49%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.95%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Energy sector--about 35.50% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Chevron Corp New (CVX - Free Report) accounts for about 2.67% of total assets, followed by Marathon Pete Corp (MPC - Free Report) and Valero Energy Corp (VLO - Free Report) .
The top 10 holdings account for about 22.31% of total assets under management.
Performance and Risk
COWZ seeks to match the performance of the Pacer US Cash Cows 100 Index before fees and expenses. 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.
The ETF has added about 15.10% so far this year and was up about 16.34% in the last one year (as of 12/20/2023). In the past 52-week period, it has traded between $44.32 and $52.53.
The ETF has a beta of 1.07 and standard deviation of 19.33% for the trailing three-year period. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Cash Cows 100 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, COWZ is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $55.25 billion in assets, Vanguard Value ETF has $105.72 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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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Should Pacer US Cash Cows 100 ETF (COWZ) Be on Your Investing Radar?
Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Pacer US Cash Cows 100 ETF (COWZ - Free Report) is a passively managed exchange traded fund launched on 12/16/2016.
The fund is sponsored by Pacer Etfs. It has amassed assets over $18.10 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.49%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.95%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Energy sector--about 35.50% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Chevron Corp New (CVX - Free Report) accounts for about 2.67% of total assets, followed by Marathon Pete Corp (MPC - Free Report) and Valero Energy Corp (VLO - Free Report) .
The top 10 holdings account for about 22.31% of total assets under management.
Performance and Risk
COWZ seeks to match the performance of the Pacer US Cash Cows 100 Index before fees and expenses. 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.
The ETF has added about 15.10% so far this year and was up about 16.34% in the last one year (as of 12/20/2023). In the past 52-week period, it has traded between $44.32 and $52.53.
The ETF has a beta of 1.07 and standard deviation of 19.33% for the trailing three-year period. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Cash Cows 100 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, COWZ is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $55.25 billion in assets, Vanguard Value ETF has $105.72 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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.