Launched on June 16, 2017, the Pacer US Small Cap Cash Cows ETF (CALF Quick QuoteCALF - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.

The fund is sponsored by Pacer Etfs. It has amassed assets over $3.68 billion, making it one of the larger ETFs attempting to match the Small Cap Value segment of the US equity market.

Why Small Cap Value

There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.

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. 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

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 0.59%, making it one of the more expensive products in the space.

It has a 12-month trailing dividend yield of 1.39%.

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 Consumer Discretionary sector -- about 19.9% of the portfolio. Energy and Healthcare round out the top three.

Looking at individual holdings, Biogen Inc (BIIB) accounts for about 2.48% of total assets, followed by Halliburton Co (HAL) and Expedia Group Inc (EXPE).

The top 10 holdings account for about 21.18% of total assets under management.

Performance and Risk

CALF seeks to match the performance of the Pacer US Small Cap Cash Cows Index before fees and expenses. The 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 ETF has added about 3.21% so far this year and was up about 6.42% in the last one year (as of 01/13/2026). In the past 52-week period, it has traded between $32.00 and $45.97.

The ETF has a beta of 1.05 and standard deviation of 21.29% for the trailing three-year period. With about 200 holdings, it effectively diversifies company-specific risk.

Alternatives

Pacer US Small Cap Cash Cows ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, CALF is a good option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Russell 2000 Value ETF (IWN) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While iShares Russell 2000 Value ETF has $12.76 billion in assets, Vanguard Small-Cap Value ETF has $33.72 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.

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.