Pacer ETFs has expanded its fund lineup by rolling out new strategic funds in response to investors rebalancing portfolios in response of 2026 expectations.
The company on Tuesday launched the Pacer S&P 500 Quality FCF R&D Leaders ETF (BATS:QFRD), the Pacer S&P 500 Quality FCF High Dividend ETF (BATS:QFHD), and the Pacer International Export Leaders ETF (BATS:PIEL). Taken together, the launches reflect the company's attempt to combine growth, income, and balance sheet discipline in a marketplace where leadership and dividend integrity are increasingly in question.
QFRD aims to replicate the S&P 500 Quality FCF R&D Leaders Index. The index focuses on the performance of 50 companies from the S&P 500 with a high research and development expenses ratio with strong free-cash-flow (FCF) margins. QFRD was developed with the objective of targeting companies with a high reinvestment rate for future growth while still focusing on financial discipline.
Free Cash Flow Takes Center Stage
Meanwhile, QFHD tracks the S&P 500 Quality FCF High Dividend Index. It identifies high dividend-paying stocks in the S&P 500 that have paid dividends for at least five years with high-quality FCF. By using free cash flow as an added screening mechanism, the ETF places heightened emphasis on dividend sustainability, providing investors with exposure to income-oriented companies that possess the operational health to support payouts over time.
Both funds expand Pacer’s Quality FCF franchise. The launches also deepen Pacer’s collaboration with S&P Dow Jones Indices, bringing the total number of funds launched under the partnership to five in the past 12 months.
Finally, PIEL rounds out the expansion and targets roughly 100 large- and mid-cap non-U.S. companies with high levels of foreign sales and strong free cash flow margins. The ETF is positioned as a tool for investors looking to dip into international exposure to globally competitive companies with solid balance sheets and durable growth potential.
Rupert Watts, head of factors and dividends at S&P Dow Jones Indices said the new indices showcase how free cash flow can be joined with other factors to provide different exposures whether it targets long-term growth through innovation or sustainable income.
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