Why might COWZ's performance weaken?

Rising capital expenditures in cyclical sectors could reduce the free cash flow of the fund's holdings, hurting its performance.

Which sectors are most affected by rising capex?

Cyclical sectors such as energy and healthcare, including companies like ConocoPhillips (COP) and Pfizer (PFE), may be most affected.

Rising Capex Could Turn Today's Cash Cows Into Dogs, Warns Report

A report warns that rising capital expenditures across cyclical sectors could undermine the Pacer US Cash Cows 100 ETF (COWZ), which invests in companies with high free cash flow relative to market value. The fund has gained 17% over the past year and trades around $64, but its performance depends on sustained free cash flow.

June 8, 2026

2 min read

Source: 24/7 Wall St.

Key Numbers

COWZ price

$64

COWZ annual return

17%

A report from 24/7 Wall St. warns that rising capital expenditures (Capex) across cyclical sectors could turn today's cash cows into dogs, threatening the performance of the Pacer US Cash Cows 100 ETF (COWZ).

Details

COWZ owns the 100 Russell 1000 names that generate the most free cash flow relative to market value. The fund has performed well, trading around $64 and up 17% over the past year. However, the engine powering the fund depends on one variable holding up across cyclical sectors: free cash flow.

Context

Cyclical sectors such as energy (e.g., ConocoPhillips COP) and healthcare (e.g., Pfizer PFE) may face rising capital expenditures, which could reduce free cash flow. If this trend continues, companies previously considered cash cows could become weak investments.

What This Means for Investors

Investors should monitor capital expenditure trends in cyclical sectors, especially those heavily weighted in COWZ. Any decline in free cash flow could negatively impact the fund's future performance.

Frequently Asked Questions

The Pacer US Cash Cows 100 ETF (COWZ) invests in the 100 Russell 1000 companies that generate the highest free cash flow relative to their market value.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.