Pacer Trendpilot US Bond ETF (PTBD US) – Portfolio Construction Methodology

The underlying Pacer Trendpilot US Bond Index delivers a rules-driven toggling allocation between the S&P U.S. High Yield Corporate Bond Index and the S&P U.S. Treasury Bond 7–10 Year Index based on a “Risk Ratio” (High Yield ÷ 7–10 Year Treasuries). When the Risk Ratio closes above its 100-day simple moving average for five consecutive business days, exposure shifts to 100% high yield; five consecutive closes below shift to 50% high yield/50% Treasuries. If the 100-day moving average itself declines versus five business days earlier, exposure moves to 100% Treasuries; after this “T-Bill Indicator,” the next change requires a new five-day “above” signal. Position changes take effect on the fifth business day after a trigger. The process evaluates daily, with no separate constituent selection, weighting caps, or scheduled reconstitutions beyond these signal-driven reallocations.

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