Pacer US Cash Cows Growth ETF (BUL US) – Portfolio Construction Methodology

The underlying Pacer US Cash Cows Growth Index provides exposure to U.S. large- and mid-cap growth stocks with high free cash flow yield. It begins with the S&P 900 Pure Growth Index, which covers committee-selected U.S. growth companies generally spanning mid- to large-capitalization and enforcing float-adjusted market cap and liquidity standards. The universe is refined by excluding financials other than REITs and any company with negative average projected free cash flows or earnings over the next two fiscal years based on analyst consensus, while retaining names without estimates. Remaining stocks are ranked by trailing 12-month free cash flow yield, defined as free cash flow divided by enterprise value, and the top 50 are selected. Constituents are weighted by free-float market cap with individual weights capped at 5%, with excess redistributed pro rata, and the index is reconstituted and rebalanced quarterly in March, June, September and December.

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