Pacer Cash COWZ 100-Nasdaq 100 Rotator ETF (QQWZ US) – Portfolio Construction Methodology

The underlying Pacer COWZ NDX Rotator Index provides a rules-based switch between US value and growth equities by alternating exposure between the Pacer US Cash Cows 100 Index and the Nasdaq-100 Index. Each month, the index compares the two sub-indices’ momentum using the equal-weighted average of their returns over the prior 1, 3, 6, 9 and 12 months and allocates 100% to the stronger sub-index, inheriting its constituent list and weighting scheme. The Cash Cows sub-index selects 100 highest free cash flow yield constituents from the Russell 1000 after first keeping the 400 largest names, excluding most financials and firms with negative projected free cash flow or earnings, and weights by trailing free cash flow with single-stock caps. The Nasdaq-100 sub-index holds 100 of the largest non-financial Nasdaq listings, screened for liquidity and free float and weighted by modified market cap. The rotator index rebalances monthly.

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