Designed to provide broad exposure to the Small Cap Value segment of the US equity market, the Pacer US Small Cap Cash Cows ETF (CALF) is a passively managed exchange traded fund launched on June 16, 2017.
The fund is sponsored by Pacer Etfs. It has amassed assets over $4.06 billion, making it one of the larger ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
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 counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.59%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.36%.
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 to the Consumer Discretionary sector -- about 22.9% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, United Airlines Holdings Inc (UAL) accounts for about 2.52% of total assets, followed by Expedia Group Inc (EXPE) and Viatris Inc (VTRS).
The top 10 holdings account for about 19.75% of total assets under management.
Performance and Risk
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.
The ETF has lost about 0.56% so far this year and is up about 2.16% in the last one year (as of 09/11/2025). In the past 52-week period, it has traded between $32.00 and $48.76.
The ETF has a beta of 1.10 and standard deviation of 22.73% for the trailing three-year period. With about 202 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Small Cap Cash Cows ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, CALF is a good option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 Value ETF (IWN) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While iShares Russell 2000 Value ETF has $11.83 billion in assets, Vanguard Small-Cap Value ETF has $31.39 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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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Pacer US Small Cap Cash Cows ETF (CALF): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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