Pacer S&P 500 Quality FCF R&D Leaders(CBOE:QFRD)

QFRD targets large-cap companies in the US with the highest expenditure on research and development (R&D) and maintains above average free cash flow (FCF) margin and FCF return on invested capital (ROIC). It tracks an index comprising the components of the S&P 500, screened to identify companies in the top 50% by FCF score based on FCF margin and FCF ROIC. Companies in the real estate and financial sectors are excluded from the selection. Qualified securities are then ranked by their R&D intensity score with the top 50 highest scoring companies included in the index. Constituents are then weighted in descending order in the same manner, with individual capping at 4.5%. The index is reconstituted and rebalanced semi-annually with reviews every January and July. The fund will typically use a replication strategy, aiming to invest in all index components in the same approximate proportion as in the index.