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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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $24.88 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Value. COWZ is managed by Pacer Etfs. This particular fund 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.
Annual operating expenses for COWZ are 0.49%, which makes it on par with most peer products in the space.
COWZ's 12-month trailing dividend yield is 1.99%.
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.
This ETF has heaviest allocation in the Consumer Discretionary sector - about 19.90% of the portfolio. Information Technology and Energy round out the top three.
Looking at individual holdings, 3m Co (MMM - Free Report) accounts for about 2.47% of total assets, followed by Gilead Sciences Inc (GILD - Free Report) and Bristol-Myers Squibb Co (BMY - Free Report) .
COWZ's top 10 holdings account for about 21.97% of its total assets under management.
Performance and Risk
Year-to-date, the Pacer US Cash Cows 100 ETF has gained about 11.76% so far, and it's up approximately 17.19% over the last 12 months (as of 08/26/2024). COWZ has traded between $47.09 and $58.11 in this past 52-week period.
COWZ has a beta of 1.01 and standard deviation of 18.95% 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 $59.57 billion in assets, Vanguard Value ETF has $123.66 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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $24.88 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Value. COWZ is managed by Pacer Etfs. This particular fund 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.
Annual operating expenses for COWZ are 0.49%, which makes it on par with most peer products in the space.
COWZ's 12-month trailing dividend yield is 1.99%.
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.
This ETF has heaviest allocation in the Consumer Discretionary sector - about 19.90% of the portfolio. Information Technology and Energy round out the top three.
Looking at individual holdings, 3m Co (MMM - Free Report) accounts for about 2.47% of total assets, followed by Gilead Sciences Inc (GILD - Free Report) and Bristol-Myers Squibb Co (BMY - Free Report) .
COWZ's top 10 holdings account for about 21.97% of its total assets under management.
Performance and Risk
Year-to-date, the Pacer US Cash Cows 100 ETF has gained about 11.76% so far, and it's up approximately 17.19% over the last 12 months (as of 08/26/2024). COWZ has traded between $47.09 and $58.11 in this past 52-week period.
COWZ has a beta of 1.01 and standard deviation of 18.95% 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 $59.57 billion in assets, Vanguard Value ETF has $123.66 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.