The Pacer US Small Cap Cash Cows 100 ETF (CALF) made its debut on 06/16/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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
Because the fund has amassed over $8.19 billion, this makes it one of the larger ETFs in the Style Box - Small Cap Value. CALF is managed by Pacer Etfs. Before fees and expenses, this particular fund seeks to match the performance of the Pacer US Small Cap Cash Cows Index.
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.
Cost & Other Expenses
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 cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.59%.
CALF's 12-month trailing dividend yield is 1.08%.
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 Consumer Discretionary sector - about 26.80% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, Skywest Inc (SKYW) accounts for about 2.71% of total assets, followed by Hanesbrands Inc (HBI) and Sylvamo Corp (SLVM).
CALF's top 10 holdings account for about 21.83% of its total assets under management.
Performance and Risk
Year-to-date, the Pacer US Small Cap Cash Cows 100 ETF has lost about -7.74% so far, and is down about -7.74% over the last 12 months (as of 12/31/2024). CALF has traded between $42.22 and $49.16 in this past 52-week period.
CALF has a beta of 1.19 and standard deviation of 24.09% for the trailing three-year period. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
Pacer US Small Cap Cash Cows 100 ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Avantis U.S. Small Cap Value ETF (AVUV) tracks ---------------------------------------- and the Vanguard Small-Cap Value ETF (VBR) tracks CRSP U.S. Small Cap Value Index. Avantis U.S. Small Cap Value ETF has $15.13 billion in assets, Vanguard Small-Cap Value ETF has $30.68 billion. AVUV has an expense ratio of 0.25% and VBR charges 0.07%.
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 - Small 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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Get it free >>Pacer US Small Cap Cash Cows 100 ETF (CALF): ETF Research Reports
Hanesbrands Inc. (HBI) : Free Stock Analysis Report
SkyWest, Inc. (SKYW) : Free Stock Analysis Report
Vanguard Small-Cap Value ETF (VBR): ETF Research Reports
Avantis U.S. Small Cap Value ETF (AVUV): ETF Research Reports
Sylvamo Corporation (SLVM) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
