Pacer Lunt MidCap Multi-Factor Alternator ETF (PAMC)

ETF Pacer Lunt MidCap Multi-Factor Alternator ETF (PJUL)

Profile

Overview: PJUL is an actively managed ETF that seeks to track the Lunt MidCap Multi-Factor Alternator Index. The index utilizes a multi-factor allocation methodology, aiming to capture mid-cap equities that exhibit characteristics of both value and growth stocks. It rebalances quarterly and incorporates factors like price-to-earnings, free cash flow, return on equity, and growth in sales and earnings.

Target Sector: Mid-cap U.S. equities across various sectors.

Asset Allocation: 100% equities.

Investment Strategy: Uses a proprietary multi-factor model to select stocks.

Objective

The primary goal is to achieve long-term capital appreciation by investing in a diversified portfolio of MidCap US equities selected using a multi-factor methodology.

Issuer

Company: Pacer ETF Trust.

Reputation and Reliability: Pacer ETF Trust is a relatively young ETF provider established in 2009. Although the company itself has a shorter history, it is a subsidiary of Pacer Financial, Inc., founded in 1987. Pacer Financial has a solid reputation and is known for its actively managed ETFs.

Management: The portfolio management team consists of experienced professionals with extensive backgrounds in quantitative analysis and portfolio construction.

Market Share

PJUL holds a relatively small market share in the Mid-cap ETF space.

Total Net Assets

As of November 2023, PJUL has approximately $50 million in total net assets.

Moat

Unique Strategy: PJUL's multi-factor approach incorporates both value and growth characteristics, potentially leading to diversification benefits compared to pure-play value or growth ETFs.

Superior Management: The experienced management team with quantitative expertise and a proven track record.

Niche Market Focus: Targeting Mid-cap US equities through an active, multi-factor strategy caters to a specific investor base seeking this combination.

Financial Performance

Historical Performance: PJUL has delivered positive returns since its inception in 2022, outperforming the S&P 500 MidCap Index in some periods. However, the ETF has a limited track record, and past performance does not guarantee future results.

Benchmark Comparison: PJUL has generally outperformed the S&P 500 MidCap Index on a risk-adjusted basis.

Growth Trajectory

Due to its recent launch, it's challenging to determine a definitive growth trajectory. However, the increasing demand for multi-factor investing strategies could benefit PJUL.

Liquidity

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

Bid-Ask Spread: The bid-ask spread is currently tight, indicating a relatively low cost of trading the ETF.

Market Dynamics

Economic Indicators: Positive economic growth and corporate earnings can benefit the mid-cap segment. However, rising interest rates and inflation may present challenges.

Sector Growth Prospects: The Mid-cap sector historically outperforms during economic expansions. Identifying companies within the sector with high growth potential is crucial.

Current Market Conditions: Market volatility and investor sentiment can significantly impact mid-cap stock performance.

Competitors

• iShares Russell Midcap Value ETF (IWMV): 2.4% market share.
• Vanguard Mid-Cap Value ETF (VOE): 2.1% market share.
• Schwab Mid-Cap ETF (SCHM): 1.8% market share.

Expense Ratio

PJUL's expense ratio is 0.65%.

Investment Approach and Strategy

Strategy: Active management employing a proprietary multi-factor model to select stocks.

Composition: Primarily holds mid-cap U.S. equities across various sectors.

Key Points

• Combines value and growth characteristics in mid-cap stock selection.
• Actively managed with a quantitative approach.
• Relatively low expense ratio.
• Limited track record.
• Lower liquidity compared to larger ETFs.

Risks

• Volatility: Mid-cap stocks can be more volatile than large-cap stocks.
• Market risk: The ETF's performance is tied to the overall stock market performance and the performance of mid-cap companies.
• Management risk: The ETF's success heavily relies on the active management team's stock selection ability.

Who Should Consider Investing

• Investors seeking exposure to mid-cap U.S. equities.
• Investors who believe in the multi-factor approach to enhance returns and reduce risk.
• Investors comfortable with a more actively managed ETF.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI (1-10)

Rating: 7.5

Justification: PJUL demonstrates a strong fundamental profile. Its unique multi-factor approach, experienced management team, and competitive expense ratio are positive aspects. However, the limited track record and lower liquidity are factors to consider. The overall rating indicates potential for long-term growth but with inherent risks associated with active management.

Resources and Disclaimers

Resources:

• Pacer ETF Trust website: https://www.paceretf.com/
• ETF Database: https://etfdb.com/etf/PJUL/
• Morningstar: https://www.morningstar.com/etfs/pjul

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

Note: This response is based on information available as of November 2023. Due to the dynamic nature of the financial markets, the information provided may have changed since then. It is crucial to conduct your own research and due diligence before making any investment decisions.