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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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Pacer Etfs. COWZ has been able to amass assets over $25.01 billion, making it one of the largest 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.49%, making it on par with most peer products in the space.
COWZ's 12-month trailing dividend yield is 1.91%.
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.
Representing 21.10% of the portfolio, the fund has heaviest allocation to the Energy sector; Information Technology and Consumer Discretionary round out the top three.
Taking into account individual holdings, Hewlett Packard Enterprise Co (HPE - Free Report) accounts for about 2.18% of the fund's total assets, followed by Airbnb Inc (ABNB - Free Report) and Nucor Corp (NUE - Free Report) .
Its top 10 holdings account for approximately 20.23% of COWZ's total assets under management.
Performance and Risk
The ETF has added roughly 11.12% and is up about 22.80% so far this year and in the past one year (as of 10/31/2024), respectively. COWZ has traded between $47.85 and $58.80 during this last 52-week period.
The ETF has a beta of 1 and standard deviation of 18.83% for the trailing three-year period. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Cash Cows 100 ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $63.18 billion in assets, Vanguard Value ETF has $127.66 billion. SCHD has an expense ratio of 0.06% 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Pacer Etfs. COWZ has been able to amass assets over $25.01 billion, making it one of the largest 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.49%, making it on par with most peer products in the space.
COWZ's 12-month trailing dividend yield is 1.91%.
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.
Representing 21.10% of the portfolio, the fund has heaviest allocation to the Energy sector; Information Technology and Consumer Discretionary round out the top three.
Taking into account individual holdings, Hewlett Packard Enterprise Co (HPE - Free Report) accounts for about 2.18% of the fund's total assets, followed by Airbnb Inc (ABNB - Free Report) and Nucor Corp (NUE - Free Report) .
Its top 10 holdings account for approximately 20.23% of COWZ's total assets under management.
Performance and Risk
The ETF has added roughly 11.12% and is up about 22.80% so far this year and in the past one year (as of 10/31/2024), respectively. COWZ has traded between $47.85 and $58.80 during this last 52-week period.
The ETF has a beta of 1 and standard deviation of 18.83% for the trailing three-year period. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Cash Cows 100 ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $63.18 billion in assets, Vanguard Value ETF has $127.66 billion. SCHD has an expense ratio of 0.06% 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.