Expanding Horizons: How US-Based Pacer’s Entry into Europe’s ETF Sector Changes the Game

Expanding Horizons How US-Based Pacer's Entry into Europe's ETF Sector Changes the Game

Setting Sails for Europe: Pacer ETFs’ Grand Entrance

Pacer ETFs, a heavyweight in the American financial sector with assets worth $35 billion, is prepping its ships to dock on European shores. The company, headquartered in Pennsylvania, is charting a course to introduce four of its most successful ETFs from the Cash Cows range to the European market. According to inside sources from ETF Stream, the asset manager is ready to launch UCITS versions of its large cap, small cap, developed markets, and global ETFs, potentially as early as next month. These will be a direct import of their American counterparts, aiming to capture the European investor’s interest.

The Cash Cows: Pacer’s Golden Geese

The quartet of ETFs currently enjoys a robust total asset under management (AUM) of $28.2 billion, reflecting a banner year for the range. These include Pacer US Cash Cows 100 ETF, Pacer US Small Cap Cash Cows 100 ETF, Pacer Global Cash Cows Dividend ETF, and Pacer Developed Markets International Cash Cows 100 ETF, with varying total expense ratios (TERs). Sean O’Hara, the president of Pacer ETFs, underscores the firm’s ambitious goal of a mid-February launch, emphasizing the necessity of the European UCITS wrapper for market penetration.

Pacer’s Cash Cows series has been a significant growth driver for the firm, doubling its size in just a year and adding a staggering $15 billion the following year. Investors have gravitated towards these ETFs because they focus on high free cash flow yield, an alternative to the traditional value premium approach. This strategy, especially in a high-interest rate environment, offers a compelling narrative against market concerns such as overconcentration in U.S. equities. The COWZ ETF has notably outperformed with significant inflows, demonstrating robust investor confidence.

As Pacer ETFs readies its European venture, it joins the ranks of U.S. issuers like Cathie Wood’s ARK and others seeking to diversify and capitalize on the burgeoning European ETF market. The move by Pacer ETFs represents not just a strategic expansion but a potential shift in investment patterns as U.S. financial innovation finds new ground in European economies.

Source: https://www.etfstream.com/articles/pacer-etfs-to-enter-europe-with-flagship-cash-cows-range