Pacer Metaurus US Large Cap Dividend Multiplier 400 ETF (QDPL US) – Portfolio Construction Methodology

The investment philosophy governing the actively managed Pacer Metaurus US Large Cap Dividend Multiplier 400 ETF isolates and magnifies the dividend component of U.S. large-cap equities while materially reducing direct equity price exposure. The portfolio uses a rules-based mix of U.S. Treasury collateral and exchange-traded futures or economically equivalent instruments referencing S&P 500 dividends and, where needed, index price exposure to neutralize unwanted beta, targeting approximately four times the index dividend stream before fees and expenses. Security selection is instrument-level, not issuer-level; the process calibrates notional exposures to dividend term structures and margin efficiency, with guardrails on leverage, liquidity, and basis risk. Rebalancing follows futures rolls and adjusts to changes in dividend expectations, maintaining collateral quality and liquidity. The sell/trim discipline reduces notional when risk limits, liquidity conditions, or dividend forecasts warrant. Capacity is driven by listed derivatives market depth and Treasury collateral scalability.

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