Pacer US Small Cap Cash Cows Growth Leaders ETF (CAFG)

ETF Pacer US Small Cap Cash Cows Growth Leaders ETF (CALF)

Profile:

• Focus: CALF invests in small-cap U.S. stocks with strong free cash flow and growth potential. It tracks the Pacer US Small Cap Cash Cows Growth Leaders Index.
• Asset Allocation: Primarily invests in U.S. equities, with exposure to various sectors including financials, healthcare, and technology.
• Investment Strategy: CALF utilizes a multi-factor quantitative approach to select stocks based on factors such as free cash flow yield, return on equity, earnings growth, and price momentum.

Objective:

The primary objective of CALF is to achieve long-term capital appreciation by investing in small-cap stocks with strong cash flow generation and growth prospects.

Issuer:

• Company: Pacer Financial
• Reputation and Reliability: Pacer Financial is a reputable ETF provider with over $30 billion in assets under management. They have been in business since 1997 and are known for their unique and innovative ETF products.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in quantitative analysis and small-cap investing.

Market Share:

CALF has a market share of approximately 0.05% within the small-cap growth ETF category.

Total Net Assets:

As of November 10, 2023, CALF has approximately $193 million in net assets.

Moat:

CALF's competitive advantages include:

• Unique Strategy: The ETF's focus on free cash flow generation differentiates it from traditional small-cap growth ETFs.
• Quantitative Approach: The data-driven investment process helps identify stocks with strong growth potential and favorable financial characteristics.
• Experienced Management: The ETF benefits from the expertise of Pacer's experienced portfolio managers.

Financial Performance:

• Historical Performance: Since its inception in 2018, CALF has generated an annualized return of 13.4%.
• Benchmark Comparison: The ETF has outperformed its benchmark, the Russell 2000 Growth Index, by an average of 1.5% per year over the same period.

Growth Trajectory:

CALF has experienced steady growth in its assets under management and has shown strong performance since its inception, indicating a positive growth trajectory.

Liquidity:

• Average Trading Volume: The ETF has an average daily trading volume of approximately 7,000 shares.
• Bid-Ask Spread: The bid-ask spread is typically around 0.1%.

Market Dynamics:

The ETF's market environment is influenced by factors such as:

• Economic Growth: A strong economy typically leads to higher corporate profits and increased investment in small-cap stocks.
• Interest Rates: Rising interest rates can impact the valuation of growth stocks.
• Investor Sentiment: Market sentiment towards small-cap and growth stocks can significantly impact the ETF's performance.

Competitors:

Key competitors include:

• iShares Russell 2000 Growth ETF (IWO)
• Vanguard Small-Cap Growth ETF (VBK)
• SPDR S&P 600 Small Cap Growth ETF (SLYG)

Expense Ratio:

The expense ratio for CALF is 0.65%.

Investment Approach and Strategy:

• Strategy: CALF tracks the Pacer US Small Cap Cash Cows Growth Leaders Index, actively selecting stocks based on a quantitative model.
• Composition: The ETF primarily holds small-cap U.S. stocks across various sectors.

Key Points:

• Unique strategy focusing on free cash flow generation.
• Strong historical performance and alpha generation.
• Experienced portfolio management team.
• Competitive expense ratio.

Risks:

• Market Risk: The ETF is subject to the overall market risk associated with small-cap and growth stocks, which can be more volatile than large-cap or value stocks.
• Quantitative Strategy Risk: The ETF's reliance on quantitative models could lead to underperformance if market conditions change unexpectedly.
• Liquidity Risk: While the ETF has decent liquidity, its lower trading volume compared to larger competitors could result in higher transaction costs.

Who should consider investing?

CALF is suitable for investors:

• Seeking long-term growth potential in small-cap stocks.
• Comfortable with higher volatility and market risk.
• Believing in the ETF's underlying investment strategy.

Fundamental Rating Based on AI:

8.5 out of 10

CALF receives a high rating based on its strong financial performance, competitive advantages, and experienced management team. AI analysis indicates a positive outlook for the ETF's continued growth and performance.

Disclaimer:

This analysis is for informational purposes only and should not be considered investment advice. Please conduct your own research and consult with a financial advisor before making investment decisions.

Resources:

• Pacer Financial CALF ETF Fact Sheet: https://pacer.com/etfs/equity/calf/
• Pacer Financial CALF ETF Top 10 Holdings: https://pacer.com/etfs/equity/calf/holdings/
• Morningstar CALF ETF Profile: https://www.morningstar.com/etfs/arcx/calf
• Zacks CALF ETF Overview: https://www.zacks.com/funds/etf/calf/overview