Pacer Nasdaq 100 Top 50 Cash Cows Growth Leaders ETF (QQQG US) – Portfolio Construction Methodology

The underlying Pacer Nasdaq-100 Top 50 Free Cash Flow Margin Index targets large-cap non-financial constituents of the Nasdaq-100 Index with strong free cash flow efficiency. Starting from the full Nasdaq-100, it removes financial sector securities, then excludes companies with negative trailing 12-month free cash flow or free cash flow margin, defined as free cash flow divided by revenue. Remaining stocks are ranked in descending order by free cash flow margin, and the top 50 names form the index at each review. Constituents are weighted in proportion to their free cash flow margin, so firms generating more free cash flow per unit of sales receive higher weights, subject to a 5% cap per stock to curb single-name risk. The index is reconstituted and rebalanced quarterly, typically in March, June, September and December, using the most recent available fundamental data at each rebalance.

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