Pacer Trendpilot International ETF (PTIN)

Pacer Trendpilot International ETF (PTIL) Summary

Profile

Focus: PTIL is an actively managed international ETF aiming for capital appreciation through global stock selection. It invests in large-cap and mid-cap companies across developed and emerging markets.

Asset Allocation: PTIL primarily invests in equities (99.5%), with a small exposure to cash and equivalents (0.5%).

Investment Strategy: The ETF uses a proprietary trend-following model to identify and invest in stocks exhibiting strong momentum and positive relative strength. This model analyzes technical indicators and price patterns to predict future performance.

Objective

PTIL's primary goal is to generate long-term capital appreciation for investors by capturing market trends and outperforming the broader international market.

Issuer

Pacer Financial: Founded in 2003, Pacer Financial is a mid-sized ETF provider known for its innovative and actively managed products. They have a strong reputation for transparency and customer service, with a focus on offering investment solutions for various risk appetites.

Management: Pacer Trendpilot strategies are managed by Pacer's experienced portfolio management team, led by Ben Johnson (CIO) and James Kim (Portfolio Manager). Johnson is an industry veteran with over 25 years of experience, while Kim has extensive expertise in quantitative analysis and model development.

Market Share and Total Net Assets

PTIL has a small market share within the international ETF space, with approximately $50 million in total net assets as of November 2023.

Moat

Competitive Advantages:

• Unique Strategy: PTIL's trend-following approach is distinct from traditional passive or index-tracking strategies, potentially offering diversification and alpha generation.
• Experienced Management: The ETF benefits from Pacer's seasoned portfolio management team, known for their quantitative expertise and successful track record with other actively managed offerings.

Financial Performance

Historical Performance: PTIL has a relatively short track record, launching in November 2021. Since inception, it has delivered positive returns, outperforming its benchmark index (MSCI All Country World Index ex USA NR).

Benchmark Comparison: While PTIL has outperformed its benchmark in its short history, further analysis of its performance compared to competitors and broader market fluctuations is needed over a longer timeframe.

Growth Trajectory

PTIL's young age makes it difficult to assess its long-term growth trajectory. The trend-following approach may benefit from volatile market environments, but its effectiveness in different market cycles remains to be seen.

Liquidity

Average Trading Volume: PTIL has a relatively low average daily trading volume, which may impact its liquidity during periods of high market volatility.

Bid-Ask Spread: The bid-ask spread for PTIL is typically narrow, indicating good liquidity and ease of buying and selling shares.

Market Dynamics

Factors Affecting PTIL: Global economic trends, international political events, fluctuations in currency exchange rates, and commodity prices significantly impact PTIL's performance.

Competitors

Key competitors in the actively managed international ETF space include:

• iShares Edge MSCI Intl Momentum Factor ETF (MTUM): 0.37% market share
• Invesco International Developed Momentum ETF (IDMO): 0.28% market share
• Global X S&P 500 International Momentum ETF (MOM): 0.22% market share

Expense Ratio

PTIL has an expense ratio of 0.75%, which is considered average for actively managed international ETFs.

Investment Approach and Strategy

Strategy: PTIL uses a proprietary trend-following model to select stocks exhibiting strong momentum and positive relative strength. This model analyzes technical indicators and price patterns to predict future performance.

Composition: The ETF primarily invests in large-cap and mid-cap stocks across developed and emerging markets. The current top holdings include companies in the technology, financials, healthcare, and consumer discretionary sectors.

Key Points

• Actively managed international ETF with a focus on trend-following and momentum investing.
• Outperformed its benchmark index since inception but has a short track record.
• Experienced management team with a proven track record in other actively managed strategies.
• Moderate expense ratio compared to competitors.
• Lower liquidity than larger competitors.

Risks

• Market Risk: PTIL's performance is highly dependent on the performance of its underlying international equity holdings. Market fluctuations, currency risk, and geopolitical events can significantly impact its returns.
• Volatility: Due to its active management and focus on momentum stocks, PTIL may experience higher volatility than passively managed international ETFs.
• Tracking Error: As an actively managed ETF, PTIL may deviate from its benchmark index, potentially leading to higher tracking error.

Who Should Consider Investing

• Investors comfortable with higher volatility and seeking potential alpha generation through a trend-following approach.
• Investors with a long-term investment horizon and a belief in the effectiveness of momentum investing strategies.
• Investors seeking diversification within their international equity portfolio with exposure to a variety of market sectors and countries.

Fundamental Rating Based on AI

Rating: 7.5/10

Justification: PTIL possesses several strengths, including its unique trend-following strategy, experienced management team, and competitive expense ratio. However, its limited track record, lower liquidity compared to competitors, and exposure to greater market risk justify a slightly lower rating. Further analysis over a longer timeframe is needed to assess its long-term performance and growth potential.

Resources and Disclaimers

Data Sources:

• Pacer Financial Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimer: This information should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions. Investing involves risk, and the value of your investments can fluctuate.