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Is Pacer US Small Cap Cash Cows 100 ETF (CALF) a Strong ETF Right Now?
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The Pacer US Small Cap Cash Cows 100 ETF (CALF - Free Report) made its debut on 06/16/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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
Managed by Pacer Etfs, CALF has amassed assets over $9.34 billion, making it one of the largest ETFs in the Style Box - Small Cap Value. This particular fund 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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.59% for CALF, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.14%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For CALF, it has heaviest allocation in the Consumer Discretionary sector --about 37.10% of the portfolio --while Industrials and Energy round out the top three.
Taking into account individual holdings, Abercrombie & Fitch Co (ANF - Free Report) accounts for about 2.43% of the fund's total assets, followed by Mdc Holdings Inc (MDC) and Alpha Metallurgical Resources Inc (AMR - Free Report) .
The top 10 holdings account for about 21.97% of total assets under management.
Performance and Risk
Year-to-date, the Pacer US Small Cap Cash Cows 100 ETF has lost about -4.47% so far, and is up about 21.77% over the last 12 months (as of 04/22/2024). CALF has traded between $35.81 and $49.16 in this past 52-week period.
CALF has a beta of 1.24 and standard deviation of 24.86% for the trailing three-year period. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Small Cap Cash Cows 100 ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.66 billion in assets, Vanguard Small-Cap Value ETF has $27.08 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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 - Small 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 Small Cap Cash Cows 100 ETF (CALF) a Strong ETF Right Now?
The Pacer US Small Cap Cash Cows 100 ETF (CALF - Free Report) made its debut on 06/16/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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
Managed by Pacer Etfs, CALF has amassed assets over $9.34 billion, making it one of the largest ETFs in the Style Box - Small Cap Value. This particular fund 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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.59% for CALF, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.14%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For CALF, it has heaviest allocation in the Consumer Discretionary sector --about 37.10% of the portfolio --while Industrials and Energy round out the top three.
Taking into account individual holdings, Abercrombie & Fitch Co (ANF - Free Report) accounts for about 2.43% of the fund's total assets, followed by Mdc Holdings Inc (MDC) and Alpha Metallurgical Resources Inc (AMR - Free Report) .
The top 10 holdings account for about 21.97% of total assets under management.
Performance and Risk
Year-to-date, the Pacer US Small Cap Cash Cows 100 ETF has lost about -4.47% so far, and is up about 21.77% over the last 12 months (as of 04/22/2024). CALF has traded between $35.81 and $49.16 in this past 52-week period.
CALF has a beta of 1.24 and standard deviation of 24.86% for the trailing three-year period. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Small Cap Cash Cows 100 ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.66 billion in assets, Vanguard Small-Cap Value ETF has $27.08 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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 - Small 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.