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Should Pacer US Cash Cows 100 ETF (COWZ) Be on Your Investing Radar?
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If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Pacer US Cash Cows 100 ETF (COWZ - Free Report) , a passively managed exchange traded fund launched on 12/16/2016.
The fund is sponsored by Pacer Etfs. It has amassed assets over $19.72 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
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
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.
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 1.89%.
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.
This ETF has heaviest allocation to the Energy sector--about 29.80% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Lennar Corp (LEN - Free Report) accounts for about 2.52% of total assets, followed by Cvs Health Corp (CVS - Free Report) and Phillips 66 (PSX - Free Report) .
The top 10 holdings account for about 21.35% 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 1.58% so far this year and it's up approximately 8.95% in the last one year (as of 02/19/2024). In the past 52-week period, it has traded between $44.32 and $53.19.
The ETF has a beta of 1.05 and standard deviation of 19.19% for the trailing three-year period. With about 101 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 Schwab U.S. Dividend Equity ETF (SCHD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $52.83 billion in assets, Vanguard Value ETF has $108.67 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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?
If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Pacer US Cash Cows 100 ETF (COWZ - Free Report) , a passively managed exchange traded fund launched on 12/16/2016.
The fund is sponsored by Pacer Etfs. It has amassed assets over $19.72 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
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
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.
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 1.89%.
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.
This ETF has heaviest allocation to the Energy sector--about 29.80% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Lennar Corp (LEN - Free Report) accounts for about 2.52% of total assets, followed by Cvs Health Corp (CVS - Free Report) and Phillips 66 (PSX - Free Report) .
The top 10 holdings account for about 21.35% 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 1.58% so far this year and it's up approximately 8.95% in the last one year (as of 02/19/2024). In the past 52-week period, it has traded between $44.32 and $53.19.
The ETF has a beta of 1.05 and standard deviation of 19.19% for the trailing three-year period. With about 101 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 Schwab U.S. Dividend Equity ETF (SCHD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $52.83 billion in assets, Vanguard Value ETF has $108.67 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.