We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Pacer US Small Cap Cash Cows 100 ETF (CALF) a Strong ETF Right Now?
Read MoreHide Full Article
Making its debut on 06/16/2017, smart beta exchange traded fund Pacer US Small Cap Cash Cows 100 ETF (CALF - Free Report) provides investors 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
CALF is managed by Pacer Etfs, and this fund has amassed over $8.96 billion, which makes it one of the largest ETFs in the Style Box - Small Cap Value. 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.
Cost & Other Expenses
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.59%.
CALF's 12-month trailing dividend yield is 0.90%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
CALF's heaviest allocation is in the Consumer Discretionary sector, which is about 37.50% of the portfolio. Its Industrials and Energy round out the top three.
When you look at 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
The ETF has lost about -8.24% and was up about 12.31% so far this year and in the past one year (as of 06/24/2024), respectively. CALF has traded between $38.95 and $49.16 during this last 52-week period.
CALF has a beta of 1.21 and standard deviation of 24.45% 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.
Avantis U.S. Small Cap Value ETF (AVUV - Free Report) tracks ---------------------------------------- and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. Avantis U.S. Small Cap Value ETF has $11.19 billion in assets, Vanguard Small-Cap Value ETF has $27.74 billion. AVUV has an expense ratio of 0.25% 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Pacer US Small Cap Cash Cows 100 ETF (CALF) a Strong ETF Right Now?
Making its debut on 06/16/2017, smart beta exchange traded fund Pacer US Small Cap Cash Cows 100 ETF (CALF - Free Report) provides investors 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
CALF is managed by Pacer Etfs, and this fund has amassed over $8.96 billion, which makes it one of the largest ETFs in the Style Box - Small Cap Value. 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.
Cost & Other Expenses
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.59%.
CALF's 12-month trailing dividend yield is 0.90%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
CALF's heaviest allocation is in the Consumer Discretionary sector, which is about 37.50% of the portfolio. Its Industrials and Energy round out the top three.
When you look at 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
The ETF has lost about -8.24% and was up about 12.31% so far this year and in the past one year (as of 06/24/2024), respectively. CALF has traded between $38.95 and $49.16 during this last 52-week period.
CALF has a beta of 1.21 and standard deviation of 24.45% 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.
Avantis U.S. Small Cap Value ETF (AVUV - Free Report) tracks ---------------------------------------- and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. Avantis U.S. Small Cap Value ETF has $11.19 billion in assets, Vanguard Small-Cap Value ETF has $27.74 billion. AVUV has an expense ratio of 0.25% 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.