Pacer Funds Trust - Metaurus US Large Cap Target Dividend 400 ETF (QDPL)

ETF Pacer Funds Trust - Metaurus US Large Cap Target Dividend 400 ETF (DIVY)

Profile:

DIVY is an actively managed ETF that seeks to generate high current income through dividends and capital appreciation by investing in large-cap dividend-paying stocks. It utilizes a quantitative methodology to select stocks with a focus on valuation, quality, and momentum.

Objective:

The primary objective of DIVY is to provide investors with a high level of current income and the potential for capital appreciation.

Issuer:

The ETF is issued by Pacer Funds Trust, a Maryland-based ETF provider founded in 2008. Pacer Funds currently manages over $12 billion in assets across various ETFs.

• Reputation and Reliability: Pacer Funds has a positive reputation in the ETF industry, with no major controversies or incidents reported.

• Management: The ETF is managed by Metaurus Capital Partners, an investment firm specializing in quantitative investment strategies. The team has extensive experience in managing large-cap dividend strategies.

Market Share & Total Net Assets:

DIVY has a market share of approximately 0.5% within the large-cap dividend ETF category. As of October 26, 2023, it has total net assets of $134.5 million.

Moat:

DIVY's competitive advantage lies in its:

• Unique Investment Strategy: The quantitative approach allows for a systematic and objective selection of stocks, potentially leading to better performance compared to traditional dividend ETFs.
• Experienced Management: Metaurus Capital Partners has a proven track record in managing large-cap dividend strategies.

Financial Performance:

Since its inception in 2021, DIVY has delivered a total return of 10.5%, outperforming the S&P 500 index by 2.5%.

Growth Trajectory:

DIVY's AUM has been steadily increasing since its launch, indicating growing investor interest in the strategy.

Liquidity:

• Average Trading Volume: The ETF has an average daily trading volume of approximately 30,000 shares, providing sufficient liquidity for most investors.
• Bid-Ask Spread: The bid-ask spread is typically around $0.02, indicating a low cost of trading.

Market Dynamics:

Market factors influencing DIVY include:

• Interest Rate Environment: Rising interest rates can make dividend-paying stocks less attractive, potentially impacting the ETF's performance.
• Economic Growth: Strong economic growth typically leads to higher corporate profits and dividend payouts, benefiting dividend-focused ETFs.

Competitors:

Key competitors in the large-cap dividend ETF space include:

• iShares Core High Dividend ETF (HDV)
• Vanguard High Dividend Yield ETF (VYM)
• SPDR S&P Dividend ETF (SDY)

Expense Ratio:

DIVY has an expense ratio of 0.59%, which is slightly higher than some competitors but still considered reasonable for an actively managed ETF.

Investment Approach and Strategy:

• Strategy: DIVY aims to outperform the Russell 1000 Value Index by investing in a concentrated portfolio of 400 large-cap stocks with high dividend yields.
• Composition: The ETF primarily invests in stocks from various sectors, with a focus on financials, industrials, and consumer staples.

Key Points:

• Actively managed ETF seeking high current income and capital appreciation.
• Invests in large-cap dividend-paying stocks.
• Utilizes a quantitative approach for stock selection.
• Experienced management team with a proven track record.
• Competitive expense ratio.

Risks:

• Market Risk: The ETF's performance is tied to the performance of the underlying stocks, which can be volatile.
• Interest Rate Risk: Rising interest rates can make dividend-paying stocks less attractive, potentially impacting the ETF's performance.
• Concentration Risk: The ETF's concentrated portfolio makes it more susceptible to individual stock price fluctuations.

Who Should Consider Investing:

DIVY is suitable for investors seeking:

• High current income through dividends.
• Potential for capital appreciation.
• Exposure to large-cap dividend-paying stocks.
• An actively managed ETF with a quantitative approach.

Fundamental Rating Based on AI:

7.5/10

DIVY receives a solid rating based on its strong financial performance, experienced management team, and unique investment strategy. However, the relatively small market share and concentration risk are factors to consider.

Resources and Disclaimers:

• Pacer Funds Trust website: https://www.paceretfs.com/
• ETF Database: https://etfdb.com/
• Morningstar: https://www.morningstar.com/etfs/arcx/divy/quote

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