The Pacer US Cash Flows 100 Index shows a 8.65% free-cash-flow yield as of December 8, compared to the 3.87% free-cash-flow yield for the broader Russell 1000 Index.
“Using a free cash flow screen to provide exposure to the top 100 companies in the Russell 1000 allows investors to track high quality US large cap companies with the potential for long term capital appreciation,” Ron Bundy, CEO of North America benchmarks for global index provider FTSE Russell, said in a press release.
Free cash flow is a measure of a company’s financial performance as calculated by operating cash flow minus capital expenditures. The measure marks the cash available after spending the money required to maintain or expand its asset base. Companies with high free cash flow also have more leeway to grow dividends over time.
Top holdings include United Continental Holdings (NYSE: UAL) 2.7%, Delta Air Lines (NYSE: DAL) 2.6%, Southwest Airlines (NYSE: LUV) 2.5%, Valero Energy Corp. (NYSE: VLO) 2.4% and Boeing Company (NYSE: BA) 2.3%.
Sector weights include information technology 24.9%, industrials 20.5%, consumer discretionary 18.8%, health care 11.7%, real estate 7.0%, materials 6.7%, energy 6.0% consumer staples 2.8% and telecom services 1.6%.
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