International and small cap stocks face a delayed recovery. Here are two cash cow ETFs to ride out the volatility

The higher-for-longer rate path outlined by the Federal Reserve this past week could mean a delayed recovery for small caps and international stocks. But that doesn't mean investors should stay away from these assets, one strategist says. Small cap and international stocks are sorely lagging this year. While the S & P 500 remains higher on the year by more than 12%, the S & P Small Cap 600 is down 1%.

mountain For wary investors, Stovall highlighted favorites he personally owns: the Pacer Global Cash Cows Dividend ETF , which tracks large-cap stocks in developed markets, and the Pacer U.S. Small Cap Cash Cows 100 ETF , which tracks 100 companies in the S & P Small Cap 600 Index based on free cash flow yield.

is up by more than 8% this year, while CALF is higher by 15%. These exchange traded funds pinpoint stocks that are cash cows — generating stable cash flows with relatively low risk — making them reliable holdings in challenging times. "Should we see a turnaround in small and international stocks, then these would likely benefit, but also hold up better if that recovery is delayed," Stovall said.

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