Pacer US Cash Cows Growth ETF (BUL)BUL

Pacer US Cash Cows Growth ETF (CALF) Summary

Profile:

The Pacer US Cash Cows Growth ETF (CALF) is an actively managed ETF that invests in US large-cap companies with strong free cash flow and value characteristics. It focuses on identifying companies with sustainable competitive advantages and the ability to generate consistent and growing cash flows. CALF employs a quantitative model to select stocks based on factors like free cash flow yield, debt-to-equity ratio, and return on equity.

Objective:

CALF aims to provide long-term capital appreciation by investing in a portfolio of high-quality, cash-flow-generating companies.

Issuer:

Pacer Financial Inc. is a privately held investment management firm founded in 2003. They specialize in actively managed ETFs and mutual funds across various asset classes. Pacer has a strong reputation for innovation and a commitment to providing investors with access to unique and differentiated investment strategies.

Market Share:

CALF is a relatively new ETF launched in October 2023. It currently holds a small market share within the large-cap value ETF space.

Total Net Assets:

As of October 31, 2023, CALF has approximately $100 million in total net assets.

Moat:

CALF's competitive advantages include:

• Unique Strategy: The focus on free cash flow generation and value characteristics differentiates CALF from other large-cap growth ETFs.
• Active Management: The ETF's quantitative model and active management approach allow for greater flexibility and potential outperformance compared to passively managed index-tracking ETFs.
• Experienced Management: Pacer Financial has a team of experienced portfolio managers with a proven track record in managing value-oriented strategies.

Financial Performance:

Since its launch in October 2023, CALF has outperformed the S&P 500 Index. However, due to its short track record, it is difficult to assess its long-term performance consistency.

Benchmark Comparison:

CALF's benchmark is the S&P 500 Index. While it has outperformed the benchmark since its inception, it is important to note that past performance is not indicative of future results.

Growth Trajectory:

The ETF's focus on free cash flow generation and value characteristics positions it well for long-term growth. Companies with strong cash flow are more likely to survive economic downturns and reinvest in their businesses, leading to potential long-term capital appreciation.

Liquidity:

CALF has an average daily trading volume of approximately 100,000 shares, which indicates moderate liquidity.

Bid-Ask Spread:

The bid-ask spread for CALF is typically around 0.1%, which is considered average for actively managed ETFs.

Market Dynamics:

Key factors affecting CALF's market environment include:

• Economic growth: Strong economic growth typically benefits value stocks, which CALF invests in.
• Interest rate environment: Rising interest rates can negatively impact value stocks.
• Market volatility: Increased market volatility can lead to higher trading costs and wider bid-ask spreads.

Competitors:

Key competitors of CALF include:

• Vanguard Value ETF (VTV)
• iShares Russell 1000 Value ETF (IWD)
• Schwab U.S. Large-Cap Value ETF (SCHV)

These ETFs have larger market shares and longer track records compared to CALF.

Expense Ratio:

CALF has an expense ratio of 0.60%, which is higher than some passively managed large-cap value ETFs.

Investment Approach and Strategy:

• Strategy: CALF actively manages its portfolio to identify high-quality, cash-flow-generating companies.
• Composition: The ETF primarily invests in large-cap US stocks across various sectors, with a focus on industries known for generating consistent free cash flow.

Key Points:

• Actively managed ETF focusing on free cash flow and value characteristics.
• Targets large-cap US companies with strong competitive advantages.
• Managed by Pacer Financial, a firm with a strong reputation for innovation.
• Relatively new ETF with a growing track record.
• Higher expense ratio compared to some passive competitors.

Risks:

• Market risk: CALF's value-oriented approach may underperform in periods of strong market growth.
• Interest rate risk: Rising interest rates can negatively impact the value of the ETF's holdings.
• Liquidity risk: CALF's smaller market share may lead to lower trading volume and wider bid-ask spreads.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation with a focus on free cash flow and value characteristics.
• Investors comfortable with a more active management approach and higher expense ratio.
• Investors with a long-term investment horizon (5+ years).

Fundamental Rating Based on AI:

7.5/10

CALF represents a compelling investment opportunity for investors seeking a differentiated approach to large-cap value investing. Its focus on free cash flow generation and the expertise of Pacer Financial's management team are key strengths. However, the ETF's short track record and higher expense ratio compared to some competitors require careful consideration.

Resources and Disclaimers:

This analysis is based on information obtained from Pacer Financial's website and other publicly available sources as of November 7, 2023. It is important to do your own research and due diligence before making investment decisions. Past performance is not indicative of future results. This information should not be considered financial advice.