Pacer Emerging Markets Cash Cows 100 ETF (ECOW US) – Portfolio Construction Methodology

The underlying Pacer Emerging Markets Cash Cows 100 Index targets high free cash flow yield within the large- and mid-cap universe of the FTSE Emerging Markets Index, which itself applies country, free-float, size and liquidity screens to define an investable emerging markets equity universe. Financials are removed, and remaining stocks with non-positive trailing 12-month free cash flow are excluded. The index then computes each company’s free cash flow yield, typically defined as trailing 12-month free cash flow (cash from operations minus capital expenditures) divided by enterprise value, and ranks securities by this metric. The 100 highest-ranked names are selected, with diversification constraints that cap individual constituent weights at 2% and limit exposure to any single country or sector. Constituents are weighted in proportion to their trailing 12-month free cash flow and the index is reconstituted and rebalanced annually, generally in December, with corporate actions reflected between reviews.

To explore ECOW in more depth, visit our ETF analytics platform for institutional-grade insights — including performance and risk metrics, correlations, sensitivities, and factor exposure: https://www.etfstrategy.com/etf/ECOW_US