The Pacer US Cash Cows Growth ETF (BUL) seeks to track the Pacer US Cash Cows Growth Index, which identifies U.S. companies with strong free cash flow generation while exhibiting growth characteristics. This growth-focused equity ETF targets firms that combine financial strength with expanding revenues and earnings potential.
How It Works
BUL uses a rules-based methodology that screens the Russell 1000 Index for companies with positive free cash flow, then applies growth filters including revenue growth, earnings growth, and return on invested capital metrics. Holdings are weighted by free cash flow yield with growth score adjustments. The fund rebalances semi-annually and typically holds 50-100 positions concentrated in companies demonstrating both cash generation efficiency and growth momentum.
Key Features
- Combines cash flow strength with growth metrics, avoiding unprofitable growth companies that dominate many growth ETFs
- Semi-annual rebalancing allows capture of evolving growth trends while maintaining focus on cash-generating businesses
- Zero expense ratio makes it cost-competitive for accessing this specialized growth strategy with cash flow requirements
Risks
- This ETF can lose value if growth stocks fall out of favor, potentially declining 40-50% during growth selloffs like 2022
- Concentrated portfolio of 50-100 holdings creates higher single-stock risk compared to broad market ETFs with thousands of positions
- Growth-focused companies typically experience higher volatility than value stocks, especially during rising interest rate environments or economic uncertainty
Who Should Own This
Best suited as a satellite holding (10-20% of equity allocation) for growth-oriented investors with 3+ year time horizons and medium-to-high risk tolerance. Appeals to investors seeking growth exposure while avoiding unprofitable companies. Works well for those wanting cash flow quality screens within their growth allocation strategy.