Pacer ETFs, the $35bn US issuer, is set to enter the European market with the launch of four ETFs from its flagship Cash Cows range, ETF Stream can reveal.
The Pennsylvania-based asset manager said it hoped to hit the market as soon as next month, launching UCITS equivalents of its large cap, small cap, developed markets and global ETFs.
Sean O’Hara, president of Pacer ETFs, told ETF Stream: “We have set up an investment advisory business in Dublin with the intention of launching UCITS, starting with our flagship ETF series in the US, Cash Cows.
“We are on target for an early to mid-February launch and we really feel like we need the wrapper.”
The four US-listed ETFs have combined assets under management (AUM) of $28.2bn after a bumper year for the range.
ETFs | Ticker | AUM | TER |
|---|---|---|---|
Pacer US Cash Cows 100 ETF | COWZ | $18.4bn | 0.49% |
Pacer US Small Cap Cash Cows 100 ETF | CALF | $6.7bn | 0.59% |
Pacer Global Cash Cows Dividend ETF | GCOW | $1.9bn | 0.65% |
Pacer Developed Markets International Cash Cows 100 ETF | ICOW | $1.2bn | 0.65% |
O’Hara said the firm had not yet confirmed total expense ratios (TERs) or tickers for the ETFs.
The Cash Cows range has fuelled the firm’s growth over the past two years and helped it become one of the fastest-growing ETF issuers in the US.
The breakout issuer doubled in size from $10bn AUM at the start of 2022 to $20bn a year later, adding a further $15bn in 2023 as investors continued to flock to the range in a high-interest rate environment.
The range focuses on high free cash flow yield, established by dividing a company’s cash flow by its enterprise value, challenging the traditional “value premium” approach of buying low price-to-book stocks.
It has proved a popular play with investors worried about the impact of high interest rates on markets and concerns around overconcentration in US equities.
COWZ returned 14.8% in 2023 versus 24% for the S&P 500 without any exposure to the ‘magnificent seven’ stocks of Apple, Alphabet, Microsoft, Nvidia, Amazon, Meta and Tesla.
The ETF saw over $6.3bn inflows in 2023, while CALF saw investors pour $4.1bn into the ETF over the same period, according to data from etf.com.
The group’s entry could be one of many for US issuers looking to break into the European ETF market this year.
In September 2023, Cathie Wood’s ARK acquired thematic ETF issuer Rize ETF in a £5.25m deal to establish itself on the continent.
Over the past 18 months, the likes of abrdn, AXA Investment Managers, Horizon Kinetics, Robeco and Investlinx have all launched ETFs in Europe for the first time.
