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Is Pacer US Cash Cows 100 ETF (COWZ) a Strong ETF Right Now?
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Launched on 12/16/2016, the Pacer US Cash Cows 100 ETF (COWZ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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 managed by Pacer Etfs, and has been able to amass over $23.23 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Value. COWZ seeks to match the performance of the Pacer US Cash Cows 100 Index before fees and expenses.
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
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 0.49% for COWZ, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.52%.
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.
COWZ's heaviest allocation is in the Energy sector, which is about 26.40% of the portfolio. Its Consumer Discretionary and Healthcare round out the top three.
Taking into account individual holdings, Qualcomm Inc (QCOM - Free Report) accounts for about 2.39% of the fund's 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
Year-to-date, the Pacer US Cash Cows 100 ETF has added about 6.74% so far, and is up about 21.54% over the last 12 months (as of 06/25/2024). COWZ has traded between $46.50 and $58.11 in this past 52-week period.
COWZ has a beta of 1.03 and standard deviation of 18.74% 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.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $56.23 billion in assets, Vanguard Value ETF has $117.32 billion. IWD has an expense ratio of 0.19% 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?
Launched on 12/16/2016, the Pacer US Cash Cows 100 ETF (COWZ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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 managed by Pacer Etfs, and has been able to amass over $23.23 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Value. COWZ seeks to match the performance of the Pacer US Cash Cows 100 Index before fees and expenses.
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
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 0.49% for COWZ, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.52%.
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.
COWZ's heaviest allocation is in the Energy sector, which is about 26.40% of the portfolio. Its Consumer Discretionary and Healthcare round out the top three.
Taking into account individual holdings, Qualcomm Inc (QCOM - Free Report) accounts for about 2.39% of the fund's 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
Year-to-date, the Pacer US Cash Cows 100 ETF has added about 6.74% so far, and is up about 21.54% over the last 12 months (as of 06/25/2024). COWZ has traded between $46.50 and $58.11 in this past 52-week period.
COWZ has a beta of 1.03 and standard deviation of 18.74% 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.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $56.23 billion in assets, Vanguard Value ETF has $117.32 billion. IWD has an expense ratio of 0.19% 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.