Pacer US Cash Cows 100 UCITS ETF
| Issuer: Pacer ETFs |
| Asset Class: Equity |
| TER: 65bps |
| Trading Currency: GBP |
| Pays Income: False |
| Listing Date: 28 Feb 2025 |
| Ticker: COWZ |
| ISIN: IE000IL7PZ05 |
This fund provides exposure to large-cap US companies selected based on a strong free cash flow (FCF) yield. The investment strategy targets the top 100 companies within the Russell 1000 Index that exhibit the highest FCF yield. Free cash flow represents the cash a company generates after accounting for the capital expenditures necessary to maintain or expand its operations. A high FCF yield can indicate a company's financial strength and its ability to return value to shareholders through dividends, share buybacks, or debt reduction. The methodology is rules-based, aiming to capture companies that are potentially undervalued yet financially robust.
The portfolio construction process begins by screening the Russell 1000 Index to exclude all financial companies, except for real estate investment trusts. The remaining companies are then ranked by their trailing 12-month FCF yield, and the top 100 are selected for inclusion. These constituents are then weighted by their market capitalization, with a cap on individual security weights to enhance diversification. By focusing on cash-generating businesses, the portfolio seeks to offer a degree of resilience, particularly during periods of market stress or economic uncertainty, as these firms often possess stronger balance sheets and are less dependent on external financing for growth.
This product is designed for investors seeking a core US equity holding with a distinct tilt towards the value and quality factors. It offers a systematic method for identifying companies with solid fundamentals, which may appeal to long-term investors aiming for sustainable growth and capital preservation. The emphasis on FCF yield offers a different perspective compared to more common value metrics like price-to-earnings ratios, potentially uncovering unique investment opportunities. As an accumulating fund, all income generated is reinvested, which is ideal for investors focused on compounding their returns over time.
