MALVERN, PA — Pacer ETFs has introduced two new funds — the Pacer S&P MidCap 400 Quality FCF Aristocrats ETF (MCOW) and the Pacer S&P SmallCap 600 Quality FCF Aristocrats ETF (SCOW) — broadening its Free Cash Flow Aristocrats product suite. The launch follows the debut of the large-cap version, LCOW, in May.
Both new funds are built on S&P Dow Jones Indices’ Quality FCF Aristocrats methodology, which emphasizes companies with consistent free cash flow generation. Free cash flow, the money left after covering operating expenses and capital investments, is often seen as a measure of financial strength and resilience.
MCOW tracks mid-sized companies within the S&P MidCap 400 that have posted at least seven consecutive years of positive free cash flow. The selection process ranks firms by free cash flow margin and return on invested capital, two measures of efficiency and operational effectiveness. SCOW applies the same framework to small-cap companies in the S&P SmallCap 600, seeking to identify smaller firms with durable cash generation and strong profitability.
According to Rupert Watts, head of factors and dividends at S&P Dow Jones Indices, the approach provides “a robust framework for identifying high-quality companies across all U.S. market capitalizations.” Pacer ETFs President Sean O’Hara said the new offerings give investors access to “financially resilient businesses while also diversifying beyond large caps.”
The launch underscores Pacer’s effort to build on its established Cash Cows ETF™ Series, which targets companies with high free cash flow yields. Unlike the growth-oriented Cash Cows strategy, the Free Cash Flow Aristocrats lineup is positioned as a quality-focused approach, concentrating on firms with proven ability to generate cash consistently across market cycles.
By extending the Aristocrats series into mid- and small-cap spaces, Pacer aims to offer investors broader exposure to companies that demonstrate capital discipline and sustainable profitability.
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