The Zacks Analyst Blog Highlights MCOW, SCOW, SFLO and CALF

For Immediate Release

Chicago, IL – September 8, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: Pacer S&P MidCap 400 Quality FCF Aristocrats ETF MCOW, Pacer S&P SmallCap 600 Quality FCF Aristocrats Strategy SCOW, Victoryshares Small Cap Free Cash Flow ETF SFLO and Pacer US Small Cap Cash Cows ETF CALF.

Here are highlights from Friday’s Analyst Blog:

Looking for Quality ETFs in Smaller Caps? Tap 2 New FCF Aristocrats

Pacer ETFs recently launched two new exchange-traded funds (ETFs) that are deemed to offer quality exposure. These two ETFs are Pacer S&P MidCap 400 Quality FCF Aristocrats ETF and Pacer S&P SmallCap 600 Quality FCF Aristocrats Strategy.

MCOW in Focus

The fund looks to provide capital appreciation over time by screening the S&P MidCap 400 for companies with at least seven successive years of positive free cash flow (per the issuer) and the highest free cash flow (FCF) quality score. The 81-stock fund charges 49 bps in fees.

No stock takes more than 4.24% weight of the fund's weight. Pure Storage (4.24%), Docusign (4.21%) and Manhattan Associates (4.12%) are the top three holdings of the fund. Information Technology (31.98%), Industrials (31.38%), Health Care (11.58%) and Consumer Discretionary (10.91%) are the top four sectors of the fund.

SCOW in Focus

The fund's focus is on the S&P SmallCap 600 for companies with at least seven consecutive years of positive free cash flow and the highest free cash flow quality score. The 82-stock fund charges 59 bps in fees, per the issuer.

Jackson Financial Inc (5.76%), Corcept Therapeutics (4.95%) and Etsy (4.67%) are the top stocks of the fund. Information Technology (22.19%), Consumer Discretionary (18.71%) and Financials (16.80%) are the top three sectors of the fund.

How Do They Fit in a Portfolio?

A higher free cash flow margin shows a company's excess cash-generating ability. The higher the margin, the stronger the company's financial resilience in volatile operating environments.

With Trump tariffs leaving some businesses in ashes, quality exposure is essential. Smaller-caps, with less export exposure and a stronger domestic focus, seem intriguing choices amid trade tensions. But lest we forget, they also need robust U.S. economic growth to truly outperform.

However, tariffs are likely to push up inflation, which, in turn, may lead consumers to become more cautious with their spending. This could weigh on economic growth.

Hence, in the smaller-cap spectrum, quality exposure is needed. As the measure — a high FCF score —indicates a company's solid fundamentals, one can bet on newbies like MCOW and SCOW.

Competition

Victoryshares Small Cap Free Cash Flow ETF is an ETF with almost the same concept. The fund puts focus on companies with high FCF yield and the highest expected growth rates. The fund has an asset base of $338.1 million. The fund hit the market in December 2023.

Pacer management also has a cash-focused small-cap ETF, namely Pacer US Small Cap Cash Cows ETF. The fund has an asset base of $4.1 billion. It charges 59 bps in fees.

The asset bases of both funds – SFLO and CALF – indicate the likelihood of success of the newbies. Both funds, MCOW and SCOW, should make a killing given their appealing investment objectives and the historical success of their peer funds.

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