The Pacer US Small Cap Cash Cows 100 ETF (CALF) was launched on 06/16/2017, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Value segment of the US equity market.

The fund is sponsored by Pacer Etfs. It has amassed assets over $8.66 billion, making it one of the larger ETFs attempting to match the Small Cap Value segment of the US equity market.

Why Small Cap Value

Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.

Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.59%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.11%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Consumer Discretionary sector--about 28.50% of the portfolio. Energy and Industrials round out the top three.

Looking at individual holdings, Peabody Energy Corp (BTU) accounts for about 2.28% of total assets, followed by Signet Jewelers Ltd (SIG) and Sylvamo Corp (SLVM).

The top 10 holdings account for about 20.74% of total assets under management.

Performance and Risk

CALF seeks to match the performance of the Pacer US Small Cap Cash Cows Index before fees and expenses. 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.

The ETF has lost about -7.08% so far this year and it's up approximately 13% in the last one year (as of 11/01/2024). In the past 52-week period, it has traded between $40.41 and $49.16.

The ETF has a beta of 1.18 and standard deviation of 24.40% for the trailing three-year period. With about 102 holdings, it effectively diversifies company-specific risk.

Alternatives

Pacer US Small Cap Cash Cows 100 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, CALF is a sufficient option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The Avantis U.S. Small Cap Value ETF (AVUV) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While Avantis U.S. Small Cap Value ETF has $13.94 billion in assets, Vanguard Small-Cap Value ETF has $30.59 billion. AVUV has an expense ratio of 0.25% and VBR charges 0.07%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

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 Small Cap Cash Cows 100 ETF (CALF): ETF Research Reports

Peabody Energy Corporation (BTU) : Free Stock Analysis Report

Signet Jewelers Limited (SIG) : 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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