Solactive is pleased to announce its collaboration with Pacer ETFs on the launch of the Solactive Pacer US Cash Cows Bond Index, serving as the underlying index for the US Cash Cows Bond ETF. This innovative product employs a differentiated approach, focusing on large-cap companies with high free cash flow yield and high free cash flow margin. By allowing bond selection across the credit spectrum, the index emphasizes the resilience of companies with robust free cash flow to sustain their interest obligations.
The Solactive Pacer US Cash Cows Bond Index is designed to track the performance of 101 corporate and individual bonds (Minimum 75 effective holdings and 25 issuers) issued by high free cash flow-generating companies, as identified by the Pacer US Cash Cows 100 Index and the Pacer US Large Cap Cash Cows Growth Leaders Index. This index employs an objective, rules-based methodology to ensure investments are focused on quality bonds from companies with robust financial health, high free cash flow yields or margins, and strong debt coverage capabilities. Weighted with a cap on each issuer of 4% and 1% per bond at the time of rebalance, it seeks to optimize yield while maintaining liquidity and credit quality. The index is reconstituted and rebalanced annually to align with its strategic objectives.
The ETF was listed on December 18th on Cboe with the ticker symbol MILK.
Timo Pfeiffer, Chief Markets Officer at Solactive, commented: “We are delighted to collaborate with Pacer ETFs on this innovative product and remain committed to delivering robust and forward-thinking indexing solutions tailored to meet evolving investment needs.”
Sean O’Hara, President of Pacer ETF Distributors, commented: “Building on the continued success of the Cash Cows Series, the launch of MILK was a natural next step in expanding our fund line-up.”
