Pacer builds out Trendpilot and Cash Cows ETF suites

May 6th, 2019 | By | Category: Alternatives / Multi-Asset

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Pacer ETFs has launched five new funds in the US, expanding the firm’s ‘Trendpilot’ and ‘Cash Cows’ suites of ETFs.

Sean O’Hara, President of Pacer ETFs Distributors.

Sean O’Hara, President of Pacer ETFs Distributors.

Sean O’Hara, President of Pacer ETFs Distributors, commented, “Quiet days in the market are few and far between, and investors are worried about their long-term investment horizons. We’ve expanded two of our product lines to give investors more options in these popular strategies.”

Joe Thomson, Founder and President of Pacer Financial, added, “The growth of our company has been due to our thoughtful approach to investing. We recognize the concerns of financial advisors and investors who are worried about the current market volatility. We have created several new ETFs designed to meet the needs of investors who want products that are strategy-driven and provide risk management.”

Trendpilot

The Trendpilot suite aims to help investors navigate turbulent equity markets by using a rules-based process to shift exposure into Treasury bills during periods of market stress.

The strategy seeks to participate in the market when it is trending up, trim equity exposure by 50% during short-term market volatility, and exit the market when it is trending down.

Existing Trendpilot ETFs target exposure to US large-caps (S&P 500), US large-caps excluding financial stocks (Nasdaq 100), US mid-caps (S&P MidCap 400), and European equities (FTSE Eurozone Index). Based on the strength of technical indicators, the ETFs may be 100% exposed to their underlying equity index, 100% exposed to the performance of Treasury Bills, or equally exposed to both.

Pacer has introduced a further two ETFs into the Trendpilot line-up. The Pacer Trendpilot International ETF (PTIN US) offers exposure to international developed markets by tracking the S&P Developed ex-US Large Cap Index in up-trending markets. The fund comes with an expense ratio of 0.65%.

The second fund is the Pacer Trendpilot Fund of Funds ETF (TRND US) which provides exposure to four ETFs in Pacer’s Trendpilot series at set weights, rebalanced quarterly. The Fund of Funds ETF, therefore, does not employ the signature Trendpilot strategy itself, but the underlying ETFs do. The target weights are US large-cap (20%), US mid-cap (20%), Nasdaq 100 (20%) and international (40%). The ETF’s expense ratio is 0.78%, comprising a management fee of 0.15% and acquired funds fees of 0.63%.

Cash Cows

The Cash Cows series focuses on “cash cow” companies with high free-cash-flow yield, an indicator of financial stability and a company’s ability to increase dividends, buy back shares, expand operations, or purchase other companies.

Pacer has rolled out three new Cash Cows ETFs.

The Pacer US Cash Cows Growth ETF (BUL US) selects 50 stocks with the highest free-cash-flow yield from the S&P 900 Pure Growth Index, a reference for US large- and mid-cap companies that exhibit strong growth characteristics. Constituents are weighted by free-cash-flow yield subject to a 5% cap per issuer. The fund comes with an expense ratio of 0.60%.

The second fund is the Pacer Emerging Markets Cash Cows 100 ETF (ECOW US) which uses the same methodology to select 100 stocks from the FTSE Emerging Markets Index while limiting the number of firms from any country or sector to 20. Constituents are also weighted by free-cash-flow yield subject to a 2% cap per stock. The ETF’s expense ratio is 0.70%.

Lastly, the Pacer Cash Cows Fund of Funds ETF (HERD US) invests equally in five other Cash Cows ETFs: the Pacer US Cash Cows 100 Index ETF (COWZ US), Pacer US Small Cap Cash Cows Index ETF (CALF US), Pacer US Cash Cows Growth Index (BUL US), Pacer Global Cash Cows Dividend Index ETF (GCOW US), and Pacer Developed Markets International Cash Cows 100 ETF (ICOW US). The ETF’s expense ratio is 0.74%, composed of a management fee of 0.15% and acquired funds fees of 0.59%.

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