Pacer Cash Cows Fund of Funds ETF (HERD)

Overview

The Pacer Cash Cows Fund of Funds ETF (HERD) is designed to provide investors with exposure to a diversified portfolio of ETFs that focus on companies with high free cash flow. It aims to capture the potential upside of investing in companies with strong cash generation capabilities across various market sectors and capitalization sizes.

Reputation and Reliability

Pacer ETFs is known for its innovative suite of rules-based ETFs, often focused on factor-based investing. They have a solid reputation for delivering targeted exposure through systematic strategies.

Management Expertise

The management team at Pacer ETFs has expertise in developing and managing quantitative investment strategies, particularly those focused on fundamental factors like cash flow.

Goal

The primary investment goal of HERD is to provide capital appreciation by investing in a portfolio of ETFs that focus on companies with high free cash flow.

Investment Approach and Strategy

Strategy: HERD invests in a selection of other Pacer ETFs that employ a 'cash cows' strategy, focusing on companies with high free cash flow yield.

Composition HERD's assets are primarily composed of shares of other Pacer ETFs, which in turn hold stocks selected based on free cash flow yield.

Market Share: The exact market share of HERD is difficult to determine precisely as it is a fund of funds, but it is a smaller player in the overall ETF market.

Total Net Assets (AUM): 120880451.75

Key Competitors

• Invesco S&P 500 Pure Value ETF (RPV)
• SPDR Portfolio S&P 500 Value ETF (SPYV)
• Vanguard Value ETF (VTV)

Competitive Landscape

The ETF industry is highly competitive, with numerous providers offering various investment strategies. HERD differentiates itself by offering a fund-of-funds approach specifically targeting free cash flow, which provides diversification but may also introduce an extra layer of fees. Competitors often focus on broader value strategies or single-factor approaches.

Historical Performance: Historical performance data is essential to understanding the ETFu2019s track record. Since inception, HERD's performance has varied with market conditions and the performance of its underlying funds.

Benchmark Comparison: Comparing HERDu2019s performance to a broad market index or a value-focused benchmark is essential to determine its effectiveness in capturing the cash flow factor.

Expense Ratio: 0.75

Average Trading Volume

The average trading volume for HERD is moderate, which may impact the ease of buying and selling shares. It usually trades several thousands of shares daily.

Bid-Ask Spread

The bid-ask spread for HERD can vary, but investors should monitor this to minimize trading costs, usually around 0.1%.

Market Environment Factors

Economic indicators, sector performance, and overall market sentiment can significantly influence the performance of HERD due to its exposure to equities. The economic cycle and interest rates impact the underlying sectors.

Growth Trajectory

The growth trajectory of HERD depends on its ability to attract assets and generate returns in line with its investment objective. Its growth is tied to the investor demand for smart beta and factor-based strategies.

Competitive Edge

HERD's competitive advantage lies in its fund-of-funds structure that focuses exclusively on cash cows using Pacer's existing expertise in this area. This provides diversification across multiple companies with high free cash flow and streamlines portfolio construction for investors seeking this specific exposure. The focused approach can lead to higher returns compared to broader market ETFs, but it also concentrates risk. The smart-beta strategy may attract investors looking for active management with a rules-based approach.

Volatility

HERDu2019s volatility is likely to be similar to that of the underlying ETFs it holds, which invest in equities. This may make the ETF suitable for risk-tolerant investors.

Market Risk

HERD is subject to market risk associated with equity investments, including economic downturns, sector-specific risks, and interest rate fluctuations.

Ideal Investor Profile

The ideal investor for HERD is one seeking capital appreciation through exposure to companies with strong free cash flow and is comfortable with equity market risk.

Market Risk

HERD may be suitable for long-term investors seeking a diversified portfolio of cash-generating companies.

The Pacer Cash Cows Fund of Funds ETF (HERD) offers a unique approach to investing by focusing on companies with high free cash flow through a fund-of-funds structure. It provides diversification across multiple sectors and market caps, offering a potentially attractive strategy for long-term capital appreciation. However, investors should be aware of the associated equity market risk, expense ratio, and moderate trading volume. This ETF can be a suitable addition to a portfolio seeking smart-beta exposure and factor-based investing.

Data Sources:

• Pacer ETFs Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

The data provided is for informational purposes only and should not be considered financial advice. Investment decisions should be based on individual circumstances and after consulting with a qualified financial advisor. Market conditions can change rapidly, and past performance is not indicative of future results.