The Pacer US Cash Cows 100 ETF (COWZ) made its debut on 12/16/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Pacer Etfs. It has amassed assets over $18.19 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. 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.
It's 12-month trailing dividend yield comes in at 1.60%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Healthcare sector - about 21.5% of the portfolio. Information Technology and Energy round out the top three.
Taking into account individual holdings, Applied Materials Inc (AMAT) accounts for about 2.71% of the fund's total assets, followed by Warner Bros Discovery Inc (WBD) and Newmont Corp (NEM).
COWZ's top 10 holdings account for about 21.76% of its total assets under management.
Performance and Risk
The ETF has gained about 5.03% so far this year and is down about -0.12% in the last one year (as of 11/14/2025). In the past 52-week period, it has traded between $47.46 and $61.35
The ETF has a beta of 0.95 and standard deviation of 16.15% 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) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $70.25 billion in assets, Vanguard Value ETF has $151.24 billion. SCHD has an expense ratio of 0.06% and VTV changes 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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Pacer US Cash Cows 100 ETF (COWZ): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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