Making its debut on 12/16/2016, smart beta exchange traded fund Pacer US Cash Cows 100 ETF (COWZ) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the Pacer US Cash Cows 100 ETF (COWZ), a passively managed exchange traded fund launched on December 16, 2016.
Pacer US Cash Cows 100 ETF is reiterated as a buy, driven by strong free cash flow focus and recent outperformance versus the S&P 500. COWZ benefits from overweight positions in Energy and Health Care, attractive 13.7x P/E, and a 2.13% yield, supporting its value-oriented investment thesis. Technical momentum is robust, with all-time highs, a bullish RSI, and a measured move price target in the low $70s.
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.
Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Pacer US Cash Cows 100 ETF (COWZ) is a passively managed exchange traded fund launched on December 16, 2016.
Pacer US Cash Cows 100 ETF has lagged peers recently, despite attractive valuations and a unique free cash flow focus. COWZ's performance now trails both iShares Russell 1000 Value ETF and SPDR S&P 1500 Value Tilt ETF across most recent timeframes. The fund's higher expense ratio (0.49%) and sector exclusions, especially financials, reduce its appeal, versus lower-cost, broader value ETFs, like VLU and IWD.
COWZ provides consistent exposure to 100 high-quality U.S. stocks trading at cheap valuations, as measured by free cash flow yield. COWZ's recent returns have been disappointing, and over the last year, it's been one of the worst-performing cash-flow-focused funds on the market. This article lists the 15 others I track. High quality is COWZ's current advantage, but my fundamental analysis reveals its peers generally offer a better growth and value combination. Notably, VFLO is superior to COWZ on both metrics.
COWZ: Low Valuation, Alternative Sector Exposure
I'm upgrading COWZ from hold to buy, citing improved risk/reward and a modest valuation after recent underperformance versus the S&P 500. Health Care is now the largest sector weight in COWZ, and its cheap valuation and strengthening technicals could drive future outperformance. COWZ trades at just 13.6x earnings with a low PEG ratio, offering value exposure, though share momentum and historical volatility remain concerns.
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.
If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Pacer US Cash Cows 100 ETF (COWZ), a passively managed exchange traded fund launched on 12/16/2016.
COWZ focuses on high free cash flow yields, a basic value investing strategy which has rewarded me greatly over the decades. As a value investor, I'm attracted to so-called cash cows, mature businesses that deliver reliable cash flows which are distributed to shareholders in the form of dividends or buybacks. While I approve of the strategy, I dislike COWZ's execution. With a turnover rate close to 100%, the ETF replaces nearly all its holdings once a year.