Launched on 06/16/2017, the Pacer US Small Cap Cash Cows ETF (CALF) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $3.79 billion, this makes it one of the larger ETFs in the Style Box - Small Cap Value. CALF is managed by Pacer Etfs. Before fees and expenses, CALF seeks to match the performance of the Pacer US Small Cap Cash Cows Index.
The Pacer US Small Cap Cash Cows Index uses an objective, rules-based methodology to provide exposure to small-capitalization U.S. companies with high free cash flow yields.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for CALF are 0.59%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.08%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector - about 22.9% of the portfolio. Information Technology and Industrials round out the top three.
When you look at individual holdings, Expedia Group Inc (EXPE) accounts for about 2.34% of the fund's total assets, followed by Tenet Healthcare Corp (THC) and Omnicom Group Inc (OMC).
The top 10 holdings account for about 19.88% of total assets under management.
Performance and Risk
Year-to-date, the Pacer US Small Cap Cash Cows ETF return is roughly 26.74% so far, and is up about 41.75% over the last 12 months (as of 08/05/2026). CALF has traded between $40.08 $56.12 in this past 52-week period.
CALF has a beta of 1.00 and standard deviation of 20.37% for the trailing three-year period. With about 202 holdings, it effectively diversifies company-specific risk .
Alternatives
Pacer US Small Cap Cash Cows ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Russell 2000 Value ETF (IWN) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) tracks CRSP U.S. Small Cap Value Index. iShares Russell 2000 Value ETF has $14.68 billion in assets, Vanguard Small-Cap Value Index Fund ETF Shares has $38.15 billion. IWN has an expense ratio of 0.24% and VBR changes 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Small Cap Value
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Pacer US Small Cap Cash Cows ETF (CALF): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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