Risk appetite has fallen sharply in a sell-off in US stocks that has lasted for nearly six months and is unlikely to recover substantially until the Fed's "hawkish" monetary policy signals a turn.In such an environment, companies with abundant cash flow begin to get the attention of investors.For investors looking for safe havens, they have found a reliable safe haven-ETF, which is based on high cash flow companies.

"Cash flow ETF" continues to attract money.

With "high quality + high cash flow" as the position standard$Pacer US Cash Cows 100 ETF (COWZ.US) $The ETF has bucked the trend this year and its cash absorption capacity has been very strong, with assets of about $5.5 billion, up from $1.3 billion at the beginning of 2022. The fund tracks large and medium-sized companies with high returns on free cash flow and has seen large inflows every week this year, according to data compiled by Bloomberg. As of Monday, the ETF price was up 2.3% this year, while the s & p 500 index was down nearly 17% over the same period.

"if economic growth slows, then cash flow will become more valuable," Ellen Hazen, chief market strategist and portfolio manager at F.L.Putnam, said in an interview. "The market is bullish on companies with high cash flowCompanies that have failed to achieve positive cash flow growth, what we call 'low quality value' companies, are starting to underperform. We think this situation is very likely to continue. "

COWZ has included some cash-rich energy stocks in its top 10 positions, including$Valero Energy (VLO.US) $, West$Western Oil (OXY.US) $、$Phillips 66 (PSX.US) $和$Exxon Mobil Corp (XOM.US) $At present, the energy industry is one of the few industries in which US stocks have achieved positive returns this year. Hazen said that over the past decade, oil companies had been responding to investor calls for more cash to be returned to shareholders rather than using cash flow for capital expenditure. "this means that we are underinvested in oil, which will keep oil prices rising, but it also means that these companies do have more free cash flow." Hazen said.

The top 10 positions in COWZ also include$Dow Chemical (DOW.US) $、$Macpherson (MCK.US) $、$Pfizer Inc (PFE.US) $And$Bristol-Myers Squibb Co (BMY.US) $Equal height free cash flow stockAnd these stocks have had very high returns so far this year, well ahead of the S & P 500 over the same period.

Behind the uptrend: strong fundamentals

Cash flow ETF (cash-flows ETF) stands out mainly because few investments work and achieve returns in a market plagued by persistently high inflation and tight monetary policy.Stocks, bonds and cryptocurrencies have all come under intense pressure from the Fed's rate-raising cycle this year, dealing a particular blow to the "speculative sector" of the stock market, which is almost exclusively focused on companies that have not yet made a profit.

So far this year, the energy sector has performed most prominently, with earnings more than 45 percentage points higher than the second-ranked utility sector, while the consumer discretionary sector has the worst performance, with a difference of about 80 percentage points.

Shawn Cruz, chief trading strategist at TD Ameritrade, saidInvestors are focusing on companies with strong fundamentals, which are usually companies with positive profits and cash flows."they [investors] are now focused on fundamentals and quality, and there is complete logic behind these high-performing industries," he said in an interview. " "on the other hand, companies that keep burning money will find it difficult to achieve positive profits in the short term, and they are the first batch of targets to be eliminated."

In addition to COWZ, another recent hot cash flow ETF--$Pacer Global Cash Cows Dividend ETF (GCOW.US) $It has also attracted a large number of investors. ETF, which focuses on high-quality dividend stocks, has seen monthly inflows this year, totaling about $280 million and assets of about $430 million.

Capital inflows and assets of the ETF are expected to reach record highs this year, according to Bloomberg statistics. So far this year, the ETF has bucked the trend by nearly 10%, far surpassing the s & p 500 over the same period.