COWZ: Popular Free Cash Flow Yield ETF Needs Change To Catch VFLO
COWZ: Popular Free Cash Flow Yield ETF Needs Change To Catch VFLO
Pacer US Cash Cows 100 ETF Falls Short of VFLO on Growth and Quality Measures
The Pacer US Cash Cows 100 exchange‑traded fund (ticker COWZ) has been assigned a “hold” rating after analysts determined that its growth and quality metrics lag behind those of the Victory Financial US Free Cash Flow ETF (VFLO), even though both funds generate comparable free‑cash‑flow yields. COWZ builds its portfolio around companies that have demonstrated strong historical free cash flow, but it does not apply forward‑looking growth screens. This omission produces uneven growth rates at the portfolio level and has translated into weaker performance relative to its peer.
Strategy Differences Highlighted
VFLO’s methodology incorporates projections of future free cash flow together with an explicit growth filter, creating a more balanced fundamental profile. The inclusion of expected cash‑flow data and a growth criterion has allowed VFLO to deliver more consistent results and to outpace COWZ markedly since each fund’s launch. By contrast, COWZ’s reliance on past cash‑flow figures leaves it vulnerable to companies whose earnings may not sustain the same level of cash generation moving forward.
Recent Analyst Outlook
The most recent coverage of COWZ appeared on April 5, 2026, when the analyst rated the fund a “hold” and forecast a heavier weighting toward energy‑sector holdings in the months ahead. The analyst noted that, while Pacer has not signaled any imminent changes to the COWZ strategy, the firm previously demonstrated a willingness to close gaps in its product lineup, as seen with adjustments made to the CALF ETF. Given the current performance gap, the analyst argued that a strategic revision appears necessary to keep COWZ competitive.
Performance Gap Persists
Data show that VFLO has been beating COWZ at the very game both funds are designed to play—capturing high‑quality, free‑cash‑flow‑rich companies. Because VFLO adds a forward‑looking growth screen, it has generated superior returns and a more stable risk profile. Consequently, the “hold” rating for COWZ reflects the fund’s inability to match VFLO’s growth‑adjusted performance, despite similar cash‑flow yields.
Outlook and Recommendations
Without a clear plan to integrate forward‑looking growth criteria, COWZ is likely to remain behind its counterpart. Investors seeking exposure to free cash flow may find VFLO’s approach more aligned with a desire for both yield and growth consistency. Until Pacer introduces enhancements that address the identified shortcomings, the “hold” stance is expected to stay in place.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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Source: seekingalpha.com · 2026-09-21