Milking It for All It's Worth: Cash Cow ETFs Focus on Free Cash Flow

The video discusses Pacer US Cash Cows ETFs, focusing on two funds: COWS and CALF. COWS screens the Russell 1000 for the top 100 companies by free cash flow yield, while CALF uses the S&P Smallcap 600 index. Both funds target companies with strong cash flows and healthy balance sheets, weighting holdings by 12-month free cash flow and capping at 2% during quarterly rebalancing. COWS includes large companies like Dell and Apple, whereas CALF features smaller firms. COWS is larger with $250 million in assets and a lower expense ratio. Bloomberg Intelligence rates both funds positively for their alternative weighting approach.

What index does the COWS fund screen to select its top 100 companies?

• S&P 500

• Russell 1000

• Dow Jones Industrial Average

• NASDAQ 100

Which index is used by the CALF fund to achieve its investment objective?

• FTSE 100

• S&P Smallcap 600

• Russell 2000

• NASDAQ Composite

What is a common characteristic of companies targeted by both COWS and CALF funds?

• High market volatility

• Rapid growth

• Strong cash flows

• High dividend yield

Which fund is larger in terms of assets, COWS or CALF?

• Neither, they are different types of funds

• CALF

• Both are equal

• COWS

What is the expense ratio comparison between COWS and CALF?

• Both have the same expense ratio

• CALF has a higher expense ratio

• Expense ratio is not mentioned

• COWS has a higher expense ratio