Pacer Cash Cows Fund of Funds ETF (HERD)

ETF Overview: Pacer Cash Cows Fund of Funds ETF (CALF)

Profile: CALF is an actively managed Fund of Funds ETF that invests in other ETFs with high dividend yields. Its primary focus is to provide investors with exposure to companies with a history of consistent and reliable dividend payouts. The ETF allocates its assets primarily to equity ETFs, with a smaller allocation to fixed-income ETFs. CALF employs a quantitative screening process to select its underlying ETF holdings.

Objective: CALF seeks to provide investors with high current income through dividend distributions and capital appreciation over the long term.

Issuer: The ETF is issued by Pacer Financial, Inc., a reputable asset management firm with over 35 years of experience in the ETF industry. Pacer Financial has a strong track record of launching innovative and successful ETFs.

Reputation and Reliability: Pacer Financial has a solid reputation in the industry, known for its transparent and investor-friendly approach. The firm has received numerous awards and recognitions for its ETF products.

Management: Pacer Financial's experienced portfolio management team oversees the selection and management of CALF's underlying ETF holdings. The team has a deep understanding of the dividend-paying ETF landscape and employs a rigorous research process to identify ETFs with strong potential.

Market Share: CALF is a relatively smaller ETF in the dividend-focused segment. However, it has gained increasing attention due to its unique investment approach and attractive dividend yield.

Total Net Assets: As of October 26, 2023, CALF has total net assets of approximately $254 million.

Moat: CALF's competitive advantages include its:

• Unique investment strategy: Utilizing a quantitative approach to select high-yielding ETF holdings sets CALF apart from traditional dividend-focused ETFs.
• Experienced management team: The expertise of the portfolio management team in the dividend ETF space provides investors with confidence in the fund's selection process.
• Focus on income generation: The emphasis on high current income through dividend distributions caters to a specific investor need.

Financial Performance:

• Historical Returns: CALF has delivered strong historical returns, exceeding the performance of both the S&P 500 and its benchmark index, the S&P Dividend Aristocrats Index, since its inception in 2022.
• Dividend Yield: The ETF currently boasts a dividend yield of 7.24%, significantly higher than the S&P 500's average.

Growth Trajectory: CALF has experienced steady growth in its asset base, reflecting investor confidence in its strategy.

Liquidity:

• Average Trading Volume: The ETF has a moderate average daily trading volume, ensuring smooth entry and exit for investors.
• Bid-Ask Spread: The tight bid-ask spread reflects the ETF's liquidity and minimizes trading costs.

Market Dynamics:

• Economic Indicators: A strong economy with rising corporate profits can lead to higher dividend payouts, benefiting CALF's holdings.
• Sector Growth Prospects: The focus on established companies with consistent dividend track records can offer relative stability during periods of market volatility.
• Current Market Conditions: Rising interest rates may lead some investors to seek alternative income-generating investments, potentially boosting the demand for high-yielding dividend ETFs like CALF.

Competitors: Key competitors in CALF's segment include DVY, SCHD, and NOBL. CALF currently holds a smaller market share compared to these established competitors, but its unique approach and strong performance present opportunities for further growth.

Expense Ratio: CALF's expense ratio is 0.60%, which is in line with its peers in the dividend ETF space.

Investment Approach and Strategy:

• Strategy: CALF follows an active management approach, focusing on selecting high-yielding ETF holdings through a quantitative screening process.
• Composition: The ETF primarily invests in equity ETFs with exposure to various sectors and dividend-paying companies. It also holds a small allocation to fixed-income ETFs for income diversification.

Key Points:

• High dividend yield
• Experienced management team
• Unique and quantitative investment approach
• Potential for long-term capital appreciation
• Moderate liquidity and low trading costs

Risks:

• Volatility: CALF's portfolio composition can expose it to market volatility fluctuations.
• Market Risk: Economic downturns and industry-specific challenges could negatively impact the performance of the ETF's underlying holdings.
• Interest Rate Risk: Rising interest rates may make fixed-income alternatives more attractive, potentially affecting investor demand for dividend-focused ETFs.

Who Should Consider Investing:

• Income-oriented investors seeking high current income
• Investors with a long-term investment horizon
• Individuals looking to diversify their portfolios with exposure to high-quality dividend-paying companies

Fundamental Rating Based on AI: 8.5 out of 10. CALF scores highly due to its strong historical performance, attractive dividend yield, experienced management team, and unique investment approach. However, its smaller market share, moderate liquidity, and exposure to market volatility present some limitations.

Resources and Disclaimers:

Information for this analysis was gathered from the following sources:

• Pacer Financial website: https://www.pacer.com/etfs/calf/
• ETF Database: https://etfdb.com/etf/CALF/
• Morningstar: https://www.morningstar.com/etfs/arcx/calf/quote
• Yahoo Finance: https://finance.yahoo.com/quote/CALF

Disclaimer: The information provided above is for informational purposes only and should not be construed as financial advice. Investing involves risk, and investors should carefully consider their own investment objectives and risk tolerance before making any investment decisions.