Pacer Nasdaq International Patent Leaders ETF (PATN)

ETF Pacer Nasdaq International Patent Leaders ETF (PATS)

Profile:

• Focus: The ETF invests in large-cap international companies with strong patent portfolios.
• Target Sector: Global Large Cap Equities
• Asset Allocation: Primarily stocks, with a focus on technology and healthcare sectors.
• Investment Strategy: Tracks the Nasdaq International Patent Leaders Index, which selects companies with the highest patent value based on factors like patent strength, diversity, and forward citation impact.

Objective:

• To provide investors with exposure to the potential growth of companies with strong intellectual property positions.

Issuer:

• Company: Pacer Funds
• Reputation and Reliability: Pacer Funds is a well-established ETF provider with a good reputation for managing thematic and index-based funds.
• Management: The ETF is managed by Pacer Advisors, a team with experience in quantitative asset allocation and index management.

Market Share:

• PATS has a market share of approximately 0.1% in the global large-cap equity ETF space.

Total Net Assets:

• As of November 1st, 2023, PATS has approximately $185 million in total net assets.

Moat:

• Unique Strategy: The focus on patent-driven companies provides a differentiated approach within the large-cap international equity space.
• Superior Management: Pacer Advisors has a strong track record in managing index-based strategies.
• Niche Market Focus: The ETF offers exposure to a specific segment of the international market, which can provide diversification benefits.

Financial Performance:

• Since inception (09/21/2018) through 11/01/2023, PATS has delivered an annualized return of 18.32%, outperforming its benchmark, the MSCI EAFE Index, which returned 10.57% during the same period.
• The ETF has experienced volatility in line with the broader market.

Growth Trajectory:

• The growth of the global patent market is expected to drive further interest in patent-focused investment strategies.
• Increasing awareness of the importance of intellectual property in driving innovation could benefit PATS.

Liquidity:

• Average Trading Volume: Approximately 20,000 shares per day.
• Bid-Ask Spread: Around 0.10%.

Market Dynamics:

• Global economic growth, technological innovation, and patent litigation trends can impact the ETF's performance.
• The ETF may be sensitive to changes in intellectual property laws and regulations.

Competitors:

• iShares International Select Dividend ETF (IDV)
• Vanguard FTSE All-World ex-US ETF (VEU)
• SPDR S&P International Dividend ETF (DWX)

Expense Ratio:

• 0.55%

Investment Approach and Strategy:

• Tracks the Nasdaq International Patent Leaders Index, which utilizes a quantitative methodology to select companies with the highest patent value.
• Holds approximately 80 stocks across various sectors, with a focus on technology and healthcare.

Key Points:

• Invests in international large-cap companies with strong patent portfolios.
• Offers exposure to a unique and potentially high-growth segment of the market.
• Has outperformed its benchmark since inception.
• Manages volatility in line with the broader market.

Risks:

• The ETF is concentrated in a specific niche, leading to potential volatility and concentration risk.
• Patent-related risks, including litigation and technological obsolescence, can impact performance.
• The ETF is relatively young, with limited historical data to analyze its long-term performance.

Who Should Consider Investing:

• Investors seeking exposure to the growth potential of companies with strong intellectual property positions.
• Investors looking for a differentiated approach within the international large-cap equity space.
• Investors with a higher risk tolerance due to the ETF's concentration and volatility.

Fundamental Rating Based on AI:

Based on the analysis of the factors mentioned above, the AI-based rating system assigns PATS a 7 out of 10.

Justification:

• Strong financial performance and outperformance against its benchmark.
• Unique investment strategy and experienced management team.
• Growing market for patent-driven companies.
• Manages volatility in line with the broader market.

However, the ETF's concentration risk, patent-related risks, and relatively short track record are considered limitations.

Resources and Disclaimers:

• Data sources: ETF.com, Pacer Funds website, Morningstar
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice.