So many of the new ETFs that were opened in 2016 focused on narrow segments of the market. We saw new funds such as the 3D Printing ETF (BATS:PRNT), the Wearable Technologies ETF (BATS:WEAR) and the Global X S&P 500 Catholic Values Index ETF (NASDAQ:CATH). And that's not even mentioning the myriad of smart beta funds that have also launched recently. I'm not suggesting that any of these are poor funds by any stretch. I actually like a number of them and think they have solid management teams backing them up but how do some of these funds fit into a portfolio? How much portfolio capital really needs to be dedicated to liquor producers and drones?
So I was pleasantly surprised to find a new ETF launch last month that focused on fundamentals instead of niche markets. The Pacer US Cash Cows 100 ETF (BATS:COWZ) targets the 100 companies from the Russell 1000 index that deliver the highest free cash flow yields. By focusing on cash rich companies, you've got a portfolio of names that have a great deal of flexibility to both target growth opportunities and return capital to shareholders in the form of dividends and buybacks.
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