Is Pacer US Cash Cows 100 ETF (COWZ) a Strong ETF Right Now?

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 long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

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.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

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

The fund is managed by Pacer Etfs, and has been able to amass over $21.16 billion, which makes 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 this ETF are 0.49%, making it on par with most peer products in the space.

It's 12-month trailing dividend yield comes in at 1.55%.

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.

For COWZ, it has heaviest allocation in the Information Technology sector --about 17.3% of the portfolio --while Energy and Consumer Discretionary round out the top three.

When you look at individual holdings, Marathon Petroleum Corp (MPC) accounts for about 2.42% of the fund's total assets, followed by Booking Holdings Inc (BKNG) and Uber Technologies Inc (UBER).

The top 10 holdings account for about 21.95% of total assets under management.

Performance and Risk

The ETF has added roughly 1.03% and it's up approximately 7.13% so far this year and in the past one year (as of 07/09/2025), respectively. COWZ has traded between $47.46 and $61.35 during this last 52-week period.

COWZ has a beta of 0.94 and standard deviation of 18.08% 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 $71.32 billion in assets, Vanguard Value ETF has $139.67 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

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This article originally published on Zacks Investment Research (zacks.com).

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