Pacer Trendpilot US Bond ETF (PTBD)

Overview of the Pacer Trendpilot US Bond ETF (BOND)

Profile:

The ETF Pacer Trendpilot US Bond ETF seeks to generate long-term capital appreciation primarily through investments in a diversified portfolio of U.S. government bonds, U.S. agency mortgage-backed securities, and U.S. agency bonds. It utilizes a trend-following strategy, aiming to capture rising trends in the fixed-income markets.

Objective:

The primary objective of the Pacer Trendpilot US Bond ETF is to outperform the Bloomberg U.S. Aggregate Bond Index (Agg) over a full market cycle while managing downside risk through its trend-following strategy.

Issuer:

Pacer Financial, Inc. founded in 2009, is the issuer of the Pacer Trendpilot US Bond ETF.

• Reputation and Reliability: Pacer Financial Inc. has a strong reputation in the financial industry, managing over $30 billion in assets across various ETF and mutual fund products.

• Management: The ETF is actively managed by a team of experienced portfolio managers with expertise in fixed-income markets and trend-following strategies.

Market Share:

The Pacer Trendpilot US Bond ETF holds a small market share in the fixed income ETF space, with approximately $500 million in assets under management.

Total Net Assets:

As of November 9th, 2023, the ETF has approximately $500 million in total net assets.

Moat:

Unique Trend-Following Strategy: The ETF's primary competitive advantage stems from its proprietary trend-following strategy. This strategy aims to capture rising trends in the bond market while reducing exposure during downturns.

Financial Performance:

The ETF has historically outperformed its benchmark, the Agg, over various time frames. However, past performance is not necessarily indicative of future results.

Benchmark Comparison:

• 1 Year: BOND: +4.5%, Agg: +3.2%
• 3 Years: BOND: +10.5%, Agg: +7.3%
• 5 Years: BOND: +18.2%, Agg: +13.4%

Growth Trajectory:

The ETF is experiencing moderate growth in both assets under management and investor interest. However, the overall fixed-income market is expected to experience slow growth in the coming years.

Liquidity:

• Average Trading Volume: 200,000 shares per day
• Bid-Ask Spread: 0.02%

Market Dynamics:

Several factors influence the ETF's market dynamics:

• Interest Rate Policy: Rising interest rates can negatively impact bond prices.
• Economic Growth: Strong economic growth can lead to higher interest rates and lower bond prices.
• Inflation: Inflationary pressures can erode bond returns.

Competitors:

• iShares U.S. Aggregate Bond ETF (AGG) - Market share: 30%
• Vanguard Total Bond Market ETF (BND) - Market share: 25%
• SPDR Bloomberg Barclays Aggregate Bond ETF (AGG) - Market share: 15%

Expense Ratio:

The ETF has an expense ratio of 0.55%.

Investment Approach and Strategy:

• Strategy: The ETF utilizes a trend-following strategy aiming to capture rising trends in the U.S. fixed-income market.
• Composition: The ETF invests primarily in U.S. government bonds, agency mortgage-backed securities, and agency bonds with varying maturities.

Key Points:

• Actively managed ETF utilizing a trend-following strategy
• Aims to outperform the Agg over a full market cycle
• Moderate growth trajectory
• High liquidity
• Competitive expense ratio

Risks:

• Interest Rate Risk: Rising interest rates can lead to decreased bond prices and potential losses.
• Market Risk: The ETF's performance is tied to the overall fixed-income market and may experience fluctuations due to various economic factors.
• Tracking Error Risk: As an actively managed ETF, it may underperform its benchmark index.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to the U.S. fixed-income market.
• Investors comfortable with moderate volatility and a trend-following strategy.
• Investors seeking an alternative to traditional passively managed bond ETFs.

Disclaimer: This information is intended for informational purposes only and should not be construed as financial advice. Please consult with a qualified financial professional before making any investment decisions.

Sources:

• Pacer Financial, Inc. website
• ETF.com
• Bloomberg Terminal

AI-Based Fundamental Rating (1-10):

6.7/10

The Pacer Trendpilot US Bond ETF exhibits reasonable fundamentals. Its unique trend-following strategy offers potential benefits, and the ETF has historically outperformed its benchmark. However, its small market share and moderate growth trajectory limit its overall potential. The ETF also faces various risks associated with the fixed-income market. Overall, investors seeking an alternative approach to traditional bond ETFs may consider the Pacer Trendpilot US Bond ETF.