Investors looking stocks that are prodigious generators of cash flow have a new exchange traded product to turn to: The Pacer US Cash Cows 100 ETF (BATS: COWZ), which debuted last month.
The new ETF tries to reflect the performance of the Pacer US Cash Cows 100 Index, which is comprised of large- and mid-cap U.S. companies with high free cash flow yields, or those commonly referred to as “cash cows.”
The underlying index selects companies from the Russell 1000 Index and screens those based on average projected free cash flows and earnings over each of the next two fiscal years, excluding financial companies other than real estate investment trusts.
COWZ “tracks the Pacer US Cash Cows 100 Index, which screens equities based on their average projected free cash flows and earnings, if available, over two fiscal years. The companies are ranked by their trailing 12-month free cash flow yield and the 100 companies with the highest free cash flow yields are included in the index,” according to a statement issued by Pacer.