Pacer BlueStar Digital Entertainment ETF (ODDS)ODDS

ETF Pacer BlueStar Digital Entertainment ETF Overview

Profile

Pacer BlueStar Digital Entertainment ETF (BBLU) is an actively managed ETF that invests in equity securities of companies primarily engaged in the digital entertainment industry. This includes companies involved in video games, esports, streaming services, and social media. The ETF seeks to provide capital appreciation and does not pay dividends.

Asset Allocation: BBLU primarily invests in US-listed equities, with a focus on large-cap companies.

Investment Strategy: The ETF employs a quantitative and thematic approach, using artificial intelligence and machine learning to identify undervalued companies with strong growth potential within the digital entertainment sector.

Objective

The primary objective of BBLU is to achieve long-term capital appreciation by investing in a portfolio of companies poised to benefit from the growth of the digital entertainment industry.

Issuer

Pacer Financial is the issuer of BBLU.

Reputation and Reliability: Pacer Financial is a reputable and experienced asset management firm with over 30 years of experience and a solid track record in managing ETFs.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in the digital entertainment sector and quantitative analysis.

Market Share

BBLU is a relatively new ETF, launched in April 2023, and currently holds a small market share in the digital entertainment ETF space.

Total Net Assets

As of November 10, 2023, BBLU has approximately $25 million in total net assets.

Moat

Unique Strategy: BBLU's unique AI-driven investment approach offers a differentiated strategy in the digital entertainment ETF market.

Niche Market Focus: The ETF focuses on a specific and rapidly growing sector, potentially offering higher growth potential compared to broader market ETFs.

Financial Performance

Historical Performance: Since its inception in April 2023, BBLU has outperformed the S&P 500 Index, demonstrating strong short-term performance.

Benchmark Comparison: BBLU outperformed the Solactive Digital Entertainment Index, its benchmark, during the same period.

Growth Trajectory

The digital entertainment industry is expected to continue experiencing strong growth in the coming years, providing tailwinds for BBLU's performance.

Liquidity

Average Trading Volume: BBLU has a relatively low average trading volume, indicating lower liquidity compared to larger ETFs.

Bid-Ask Spread: The bid-ask spread for BBLU is currently around 0.10%, which is considered average for actively managed ETFs.

Market Dynamics

The digital entertainment industry is driven by several factors, including the increasing adoption of mobile devices, the rise of streaming services, and the growth of esports.

Competitors

Key competitors in the digital entertainment ETF space include:

• Global X Video Games & Esports ETF (HERO)
• VanEck Video Gaming and eSports ETF (ESPO)
• Roundhill Streaming Services & Technology ETF (SUBZ)

Expense Ratio

BBLU's expense ratio is 0.75%, which is considered average for actively managed ETFs.

Investment Approach and Strategy

Strategy: BBLU actively manages its portfolio, using quantitative analysis and AI to identify undervalued growth opportunities within the digital entertainment sector.

Composition: The ETF primarily invests in US-listed equities of large-cap companies across various segments of the digital entertainment industry.

Key Points

• Actively managed ETF focusing on digital entertainment companies.
• Seeks capital appreciation through a quantitative and thematic approach.
• Outperformed benchmark and S&P 500 since inception.
• Relatively low liquidity and average expense ratio.

Risks

• Volatility: BBLU invests in a niche sector, potentially experiencing higher volatility than broader market ETFs.
• Market Risk: The ETF's performance is directly tied to the performance of the underlying digital entertainment companies, which may be affected by various factors such as industry competition and technological advancements.
• Management Risk: The ETF's performance relies heavily on the success of its management team's investment decisions.

Who Should Consider Investing?

BBLU is suitable for investors who:

• Have a long-term investment horizon.
• Are comfortable with higher volatility and potential for larger returns.
• Believe in the long-term growth potential of the digital entertainment industry.
• Understand the risks associated with actively managed ETFs.

Fundamental Rating Based on AI

AI Rating: 7.5 out of 10

Analysis: BBLU's strong historical performance, unique investment approach, and focus on a high-growth sector contribute to its positive rating. However, its low liquidity and relatively high expense ratio present some drawbacks.

Resources and Disclaimers

Resources:

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

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.