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Is Pacer US Cash Cows 100 ETF (COWZ) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the Pacer US Cash Cows 100 ETF (COWZ - Free Report) is a smart beta exchange traded fund launched on 12/16/2016.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Pacer Etfs. It has amassed assets over $22.34 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
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 cousins, other things remaining the same.
Annual operating expenses for COWZ are 0.49%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.87%.
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 in the Energy sector - about 32.10% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Qualcomm Inc (QCOM - Free Report) accounts for about 2.39% of total assets, followed by Abbvie Inc (ABBV - Free Report) and Lennar Corp (LEN - Free Report) .
Its top 10 holdings account for approximately 21.39% of COWZ's total assets under management.
Performance and Risk
The ETF return is roughly 6.57% and is up about 18.38% so far this year and in the past one year (as of 04/22/2024), respectively. COWZ has traded between $44.37 and $58.11 during this last 52-week period.
The fund has a beta of 1.05 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 $53.61 billion in assets, Vanguard Value ETF has $111.21 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?
Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the Pacer US Cash Cows 100 ETF (COWZ - Free Report) is a smart beta exchange traded fund launched on 12/16/2016.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Pacer Etfs. It has amassed assets over $22.34 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
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 cousins, other things remaining the same.
Annual operating expenses for COWZ are 0.49%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.87%.
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 in the Energy sector - about 32.10% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Qualcomm Inc (QCOM - Free Report) accounts for about 2.39% of total assets, followed by Abbvie Inc (ABBV - Free Report) and Lennar Corp (LEN - Free Report) .
Its top 10 holdings account for approximately 21.39% of COWZ's total assets under management.
Performance and Risk
The ETF return is roughly 6.57% and is up about 18.38% so far this year and in the past one year (as of 04/22/2024), respectively. COWZ has traded between $44.37 and $58.11 during this last 52-week period.
The fund has a beta of 1.05 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 $53.61 billion in assets, Vanguard Value ETF has $111.21 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.