Pacer Cash Cows Fund of Funds ETF (HERD)

Overview

The Pacer Cash Cows Fund of Funds ETF (HERD) aims to provide capital appreciation over the long term by investing in a portfolio of ETFs that follow a rules-based, factor-driven approach focused on companies with high free cash flow yields. The fund allocates its assets across various sectors, primarily focusing on large-cap companies. Its investment strategy involves selecting ETFs that track the Pacer Cash Cows Index Series, emphasizing those with robust cash flow generation.

Reputation and Reliability

Pacer ETFs is known for its rules-based, index-tracking ETFs, and generally regarded as a reliable issuer.

Management Expertise

Pacer ETFs has a dedicated management team focused on developing and managing factor-based investment strategies.

Goal

The primary goal of HERD is to provide long-term capital appreciation.

Investment Approach and Strategy

Strategy: HERD invests in other ETFs that track indexes based on free cash flow yield.

Composition HERD primarily holds other ETFs, thus diversifying across a range of large-cap companies with strong cash flow.

Market Share: HERD's market share within the fund of funds and smart beta ETF category is relatively small compared to broader market ETFs.

Total Net Assets (AUM): 44590000

Key Competitors

• Invesco QQQ Trust (QQQ)
• SPDR S&P 500 ETF Trust (SPY)
• Vanguard Total Stock Market ETF (VTI)

Competitive Landscape

The ETF industry is highly competitive with numerous players. HERD competes with broad market ETFs and other factor-based ETFs. Advantages of HERD include its focused cash flow strategy. A disadvantage is its potentially higher expense ratio due to the fund-of-funds structure and specialized focus, and lack of extensive tracking history.

Historical Performance: Past performance does not guarantee future results. Because HERD is relatively new, there is not a significant amount of historical data available for performance analysis.

Benchmark Comparison: A relevant benchmark would be an index tracking large-cap stocks with high free cash flow yield, though a direct comparison is difficult due to the fund-of-funds structure.

Expense Ratio: 0.75

Average Trading Volume

HERD's average trading volume is relatively low, which could impact trading costs, but this fluctuates.

Bid-Ask Spread

HERD's bid-ask spread is generally moderate, potentially impacting trading costs depending on the order size.

Market Environment Factors

HERD's performance is influenced by overall economic conditions, market sentiment towards value and quality stocks, and interest rate movements, all of which impact the underlying ETFs it holds.

Growth Trajectory

HERD's growth depends on investor demand for factor-based strategies focused on cash flow, as well as its ability to attract assets through performance and marketing.

Competitive Edge

HERD's competitive edge lies in its unique fund-of-funds approach targeting companies with strong free cash flow, providing diversification within this specific factor. This strategy offers investors a convenient way to gain exposure to a basket of cash flow-focused ETFs without the need for individual ETF selection. The rules-based approach ensures consistent application of the cash flow factor. However, the higher expense ratio compared to single-ETF strategies could be a disadvantage.

Volatility

Volatility is dependent on the underlying ETFs within the fund, but factor-based strategies can experience periods of higher or lower volatility compared to the broad market.

Market Risk

Market risk includes the potential for losses due to overall market downturns affecting the value of the underlying stocks held by the constituent ETFs. There is also a risk that the cash flow factor may underperform during certain market cycles.

Ideal Investor Profile

The ideal investor for HERD is one seeking long-term capital appreciation, exposure to companies with strong free cash flow, and diversification through a fund-of-funds structure. Investors should understand and be comfortable with the factor-based investment approach.

Market Risk

HERD is suitable for long-term investors seeking factor-based exposure, but it might not be ideal for active traders due to lower liquidity and potentially higher transaction costs.

The Pacer Cash Cows Fund of Funds ETF (HERD) provides investors with a unique approach to accessing companies with high free cash flow through a fund-of-funds structure. It aims for long-term capital appreciation by investing in ETFs that track the Pacer Cash Cows Index Series. While offering diversification and a rules-based investment strategy, investors should consider the higher expense ratio and relatively lower liquidity compared to broader market ETFs. It best suits long-term investors comfortable with factor-based investing and seeking exposure to a specific investment thesis.

Data Sources:

• Pacer ETFs Website
• ETF.com
• Yahoo Finance

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be based on individual circumstances and risk tolerance. Past performance is not indicative of future results.