Introducing the Pacer US Small Cap Cash Cows 100 ETF (CALF): A New Player in the Small Cap Value Segment
Launched on June 16, 2017, the Pacer US Small Cap Cash Cows 100 ETF (CALF) is a passively managed exchange-traded fund (ETF) that offers investors an opportunity to gain broad exposure to the Small Cap Value segment of the US equity market. This ETF is an addition to the growing list of investment vehicles designed to cater to investors seeking to diversify their portfolios by investing in small cap value stocks.
About Pacer ETFs and the Small Cap Cash Cows 100 Index
Pacer ETFs is a California-based exchange-traded fund provider that offers a range of niche ETFs focused on various sectors and investment strategies. The Small Cap Cash Cows 100 Index, the underlying index for CALF, is designed to select the 100 US small cap companies that exhibit strong cash flow characteristics. These companies are selected based on their cash flow from operations relative to market capitalization, and they must also have a minimum market capitalization of $300 million.
Investment Objective and Strategy
The investment objective of CALF is to replicate the performance of the Small Cap Cash Cows 100 Index, net of expenses. The ETF uses a passive indexing approach, which involves tracking the index by holding all the securities in the index in the same weightings as they appear in the index.
Key Features and Benefits
CALF offers several features and benefits that make it an attractive investment option for investors seeking exposure to the small cap value segment:
- Broad Exposure: CALF provides investors with exposure to a diversified portfolio of small cap value stocks, which can help reduce the risk associated with investing in individual stocks.
- Passive Indexing: The ETF uses a passive indexing strategy, which means that it automatically tracks the index, reducing the need for active management and the associated costs.
- Cash Flow Focus: The index selection process focuses on companies with strong cash flow characteristics, which can help mitigate the risk of investing in companies with weak financials.
- Liquidity: CALF is listed on the NYSE Arca exchange, which provides investors with the ability to buy and sell the ETF throughout the trading day.
Impact on Individual Investors
For individual investors, CALF offers a cost-effective way to gain exposure to the small cap value segment of the US equity market. By investing in an ETF like CALF, investors can diversify their portfolios and potentially earn higher returns than they would by investing in individual stocks. Additionally, the passive indexing strategy and low expense ratio make it an attractive option for investors seeking to minimize costs.
Impact on the World
The launch of CALF is significant for the ETF industry and the investment community as a whole. It provides investors with another option for investing in the small cap value segment, which has historically outperformed other segments of the market. Additionally, the focus on cash flow characteristics can help investors identify companies with strong financials and potentially better long-term growth prospects.
Conclusion
The Pacer US Small Cap Cash Cows 100 ETF (CALF) is a new player in the small cap value segment of the US equity market. It offers investors a cost-effective way to gain broad exposure to this segment, with a focus on companies that exhibit strong cash flow characteristics. For individual investors, CALF provides an attractive option for diversifying their portfolios and potentially earning higher returns than they would by investing in individual stocks. For the investment community as a whole, CALF adds another tool to the growing list of investment vehicles designed to help investors navigate the complex world of investing.
Investing in an ETF like CALF involves risks, including the possible loss of principal. It is important for investors to carefully consider their investment objectives, risk tolerance, and financial situation before investing in any security. Consult with a financial professional for more information.
