Three Free Cash Flow and Quality ETFs Quietly Beating Every Other Smart Beta Strategy in 2026
Key takeaways
- VanEck Morningstar Wide Moat ETF (MOAT) uses equal-weighting and rotates into discounted wide-moat companies, up only 1% year-to-date but 19% over one year, accepting lag periods when momentum dominates.
- The analyst who called NVIDIA in 2010 just named his top 10 stocks and Pacer US Cash Cows 100 ETF wasn t one of them.
- Smart beta had a confusing first half of 2026, as momentum cooled after a strong 2025, low-volatility lagged a market that kept grinding higher, and dividend growth funds got squeezed by another leg up in yields.
Three Free Cash Flow and Quality ETFs Quietly Beating Every Other Smart Beta Strategy in 2026 CL STOCK / Shutterstock.com David Beren Tue, June 2, 2026 at 10:16 PM GMT+7 6 min read QCOM F CVS MO AAPL Quick Read Pacer US Cash Cows 100 ETF (COWZ) is up 9% year-to-date and 25% over the trailing year, using a mechanical screen of the Russell 1000’s 100 names with highest free cash flow yield, with top holdings including Qualcomm, Ford, CVS, and Altria. i Shares MSCI USA Quality Factor ETF (QUAL) manages $47.1B with a 0.15% expense ratio, holding Apple, Nvidia, and Microsoft at the top and posting 23% one-year returns with 0.87% dividend yield. VanEck Morningstar Wide Moat ETF (MOAT) uses equal-weighting and rotates into discounted wide-moat companies, up only 1% year-to-date but 19% over one year, accepting lag periods when momentum dominates.
Elevated interest rates and refinancing costs have made cash-generative companies with durable competitive advantages outperform, while AI capital intensity and provisions in the One Big Beautiful Bill Act that improve free cash flow for R&D and capex-heavy sectors further reward companies already producing cash without dilution.
The analyst who called NVIDIA in 2010 just named his top 10 stocks and Pacer US Cash Cows 100 ETF wasn t one of them. Get them here FREE.