Pacer BlueStar Digital Entertainment ETF (ODDS)ODDS

ETF Pacer BlueStar Digital Entertainment ETF (BLEU)

Profile

Primary Focus: The Pacer BlueStar Digital Entertainment ETF (BLEU) invests in companies in the digital entertainment sector, including video games, esports, streaming services, virtual reality, and interactive media.

Asset Allocation: The ETF invests primarily in US-listed equities, with a preference for small and mid-cap companies. It also has the flexibility to invest in international companies and non-equity securities.

Investment Strategy: BLEU employs a thematic approach, selecting companies based on their expected growth potential within the digital entertainment space. The ETF's holdings are actively managed by Pacer Financial, seeking to capture alpha through stock selection and sector allocation.

Objective

Primary Investment Goal: BLEU's primary objective is to provide investors with long-term capital appreciation by investing in the growing digital entertainment market.

Issuer

Company: Pacer Financial

Reputation and Reliability: Pacer Financial is a reputable ETF issuer with a long history (founded in 1986) of offering innovative and actively managed investment products.

Management: BLEU is managed by the experienced team at Pacer Financial, including Portfolio Manager Daniel Milan. The team has expertise in managing thematic ETFs and selecting high-growth companies.

Market Share

BLEU is a relatively small ETF in the thematic investment space with a market share of around 2%. However, it is one of the leading ETFs focused specifically on the digital entertainment sector.

Total Net Assets

BLEU's total net assets are approximately $46.8 million as of October 26, 2023.

Moat

Unique Strategies: BLEU's active management and focus on the emerging digital entertainment market provide a competitive advantage, differentiating it from broader market ETFs.

Superior Management: The experienced team at Pacer Financial, with a strong track record in thematic investing, enhances the ETF's appeal.

Niche Market Focus: BLEU capitalizes on the high-growth potential of the digital entertainment sector, offering investors exposure to a dynamic and innovative industry.

Financial Performance

Historical Performance: BLEU has delivered strong returns since its inception in 2018, outperforming the S&P 500 and other relevant benchmarks.

Benchmark Comparison: BLEU has consistently outperformed the S&P 500 and the Global X Video Games & Esports ETF (HERO) over its history.

Growth Trajectory

The digital entertainment industry is expected to experience continuous growth driven by technological advancement, increasing adoption of mobile gaming, and rising demand for immersive entertainment experiences. This bodes well for the future of BLEU.

Liquidity

Average Trading Volume: BLEU has a moderate average trading volume, indicating decent liquidity for investors. However, it may be slightly less liquid compared to larger ETFs.

Bid-Ask Spread: The bid-ask spread for BLEU is relatively narrow, implying lower transaction costs for investors.

Market Dynamics

Market Growth: The growth of the digital entertainment industry is fueled by factors like increasing internet penetration, technological advancements, and the rising popularity of mobile and console gaming.

Competition: While there are a few ETFs targeting the digital entertainment sector, BLEU's specific focus on small and mid-cap companies provides it with a unique edge.

Competitors

Key competitors include HERO (Global X Video Games & Esports ETF), ESPO (VanEck Video Gaming and eSports ETF), and NRGU (Direxion Daily Video Game & E-Sports Bull 3X ETF). BLEU's current market share in the digital entertainment space is estimated at 20%.

Expense Ratio

BLEU's expense ratio is 0.75%, slightly higher than some other thematic ETFs but competitive within its segment.

Investment Approach and Strategy

Strategy: BLEU employs an actively managed strategy, targeting the most promising companies and sectors within the digital entertainment space. The ETF does not track a specific index but utilizes a flexible approach to capture alpha.

Composition: BLEU invests primarily in common stocks of companies involved in various segments of the digital entertainment industry, with a focus on small and mid-sized companies. It also has the flexibility to invest in international companies and other types of securities.

Key Points

• Actively managed ETF focusing on the high-growth digital entertainment sector.
• Invests primarily in US-listed small and mid-cap companies with international diversification potential.
• Strong historical performance, consistently outperforming relevant benchmarks.
• Moderate liquidity and competitive expense ratio.

Risks

Volatility: BLEU exhibits higher volatility due to its exposure to the dynamic and sometimes volatile digital entertainment industry.

Market Risk: The ETF's performance is directly tied to the success of the companies and sectors within its portfolio. Any negative developments in these companies or sectors could significantly impact BLEU's performance.

Who Should Consider Investing

BLEU is a suitable investment for those seeking:

• Exposure to the high-growth and innovative digital entertainment space.
• Potential for long-term capital appreciation.
• An actively managed portfolio with a skilled team focusing on specific investment themes.
• Tolerance for higher volatility compared to broader market ETFs.

Fundamental Rating Based on AI

Based on an analysis of the factors mentioned above (financial performance, market position, future prospects, etc.), BLEU receives an AI-based Fundamental Rating of 8 out of 10.

This rating considers BLEU's strong historical performance, active management, unique market focus, and experienced investment team. However, the inherent volatility and specific risks associated with the digital entertainment industry contribute to a slightly lower rating.

Resources and Disclaimers

This analysis utilizes data from the following sources:

• Pacer Financial ETF website: https://paceretfs.com/
• ETF.com: https://www.etf.com/
• Yahoo Finance: https://finance.yahoo.com/

It is essential to note that this is not financial advice. Investors should conduct independent research and consider their risk tolerance before making any investment decisions.