Pacer Enters Europe With Three Cash Cow ETFs

The funds mimic 3 popular U.S. funds, including COWZ, Pacer's No. 1 product.

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Reviewed by: Ron Day
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Edited by: etf.com Staff

Pacer ETFs has entered Europe with the launch of three "cash cow" exchange-traded funds that have proven popular with U.S. investors.

Listed on Euronext Dublin and Euronext Amsterdam, the three free-cash-flow ETFs cover U.S., developed markets and global dividend-paying stocks. The Malvern, Penn.-based company said earlier this year that it would launch products on European exchanges.

Pacer's half-dozen or so cash cow funds, which focus on companies that produce high cash flow, are the most popular among the firm's 47 funds that manage $43.5 billion. It's largest is the $22.8 billion Pacer U.S. Cash Cows 100 ETF (COWZ), which brought in $1.3 billion in new cash last month. 

In Europe, the company launched the Pacer US Cash Cows 100 UCITS ETF, which mimics COWZ; the Pacer Developed Markets International Cash Cows 100 UCITS ETF, copy of the Pacer Developed Markets International Cash Cows 100 ETF (ICOW); and the Pacer Global Cash Cows Dividend UCITS ETF, a cousin of the Pacer Global Cash Cows Dividend ETF (GCOW).

COWZ, which tracks the Solactive Pacer US Cash Cows 100 index offers exposure to the top 100 companies of the Russell 1000 based on free cash flow yield, a metric that indicates a company is producing more cash than it needs to run the business and can invest in growth opportunities.

“By entering the European market we aim to serve a broader demographic of investors and advisors who are looking to tap into the opportunity these free-cash-flow focused funds offer,” Pacer president Sean O’Hara said. 

As well as targeting the European market, O’Hara previously told ETF Stream the firm was eyeing growth opportunities in Latin America for US investors who prefer the UCITS structure.

“We have expansion plans for Europe and beyond, but there is also a pretty vibrant market in the US for investors who prefer the UCITS structure, non-resident citizens who have relationships with US-based financial advisers,” he said.

Last week, U.S. asset manager Janus Henderson confirmed its entry into the European ETF market after it acquired Tabula Investment Management.

The firm will look to leverage its current European client base as well as regions such as Latin America, the Middle East and APAC where the UCITS structure is often preferred.

Note: This article originally appeared in etf.com sister publication ETF Stream at Pacer ETFs lists three Cash Cow ETFs in Europe (etfstream.com)

Theo Andrew joined ETF Stream as a senior reporter in September 2021. He has over four years of investment writing experience spanning pensions and retail investments, most recently at Citywire, where he was a senior reporter covering environmental, social and governance investing.