Pacer’s Cows ETFs Make Another Small Cap Bet

Pacer’s Cows ETFs Make Another Small Cap Bet

CAFG, a cousin to CALF, focuses on growth companies with the highest free cash flow.

Managing Editor
Reviewed by: Lisa Barr
Edited by: Lisa Barr

Pacer ETFs, which manages $24 billion in exchange-traded funds, is expanding its Cash Cows franchise with a niche fund that seeks growth by focusing on free cash flow at small cap companies. 

The Pacer US Small Cap Cash Cows Growth Leaders ETF (CAFG) began trading May 2 and has gained 1.6% since then, rising to $20.09 on Friday afternoon. The SPDR S&P 500 ETF Trust (SPY) has lost about 1% over that period. 

CAFG is the ninth of Malvern, Pennsylvania-based Pacer’s Cash Cows funds, which includes its biggest fund, the $13 billion Pacer U.S. Cash Cows 100 ETF (COWZ). The fund is similar to the $1.99 billion Pacer U.S. Small Cap Cash Cows 100 ETF (CALF), which launched in 2017, while specifically targeting growth companies with high free cash flow margins. 

Pacer says the fund is like a small cap version of its Pacer US Large Cap Cash Cows Growth Leaders ETF (COWG). It invests in the 100 companies in the S&P SmallCap 600 Index that have the highest free cash flow margins. Pacer defines “free cash flow margin” as free cash flow divided by sales. 

The company created the fund to address “the changing needs” of investors and financial advisors who are seeking “to add growth ETFs to their portfolios,” Sean O’Hara, president of Pacer ETF Distributors, said in a statement

CALF, the other small cap fund, has gained 1.6% so far this year, and has brought in $649.3 million in fund flows, according to data. COWG, the large cap cousin with the free cash flow focus, has lost less than 1% and had inflows of $19.8 million. It has $20.3 million in assets.  

Meanwhile, the iShares Core S&P Small-Cap ETF (IJR), which tracks the S&P SmallCap 600 index, has lost 2.2% this year. It has brought in $342.9 million, despite massive outflows of $260.2 million this week.  


Contact Ron Day at  [email protected] or follow him on Twitter at @RonDayETF 

Ron Day is Managing Editor at He joined the company in October 2022 and previously served as editor and deputy managing editor.

Ron covered business and financial news at Bloomberg News for 20 years, working on the breaking news, technology, commodities, headlines and First Word teams. He was previously senior editor at ESG news outlet Karma Impact and filled the same role at Boundless Impact. He also covered a variety of beats at New Jersey daily papers including the Daily Record in Parsippany, the North Jersey Herald & News and the Asbury Park Press. Ron's freelance work has been published in, and

Ron is an advocate and fan of literacy. He hopes to one day master his Telecaster, rather than the other way around. His wonderful family includes a 10-lb. malti-poo named Emmy.