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

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

Profile:

DIVY is a passively managed ETF that tracks the Metaurus US Large Cap Target Dividend 400 Index. It invests in 400 large-cap U.S. stocks with high dividend yields, aiming to provide high current income and capital appreciation potential.

Objective:

The primary goal of DIVY is to provide investors with high current income through dividend payments. Its secondary objective is to appreciate capital over the long term.

Issuer:

• Pacer Funds Trust: A Maryland-based ETF provider established in 2008.
• Reputation and Reliability: Pacer Funds is a well-regarded ETF provider with a solid track record and numerous successful ETFs.
• Management: Experienced team with expertise in ETF design and portfolio management.

Market Share:

DIVY has a relatively small market share in the large-cap dividend ETF space.

Total Net Assets:

Approximately $570 million as of November 8, 2023.

Moat:

• High Dividend Yield: Aims for a higher dividend yield than the S&P 500 Index.
• Target Dividend Approach: Invests in companies with consistent histories of dividend payments.
• Low Fees: Expense ratio of 0.45%.

Financial Performance:

• Year-to-date: -13.5% (as of November 8, 2023)
• 1-year: -7.7%
• 3-year: 14.3%
• 5-year: 16.8%

Benchmark Comparison:

DIVY has underperformed the S&P 500 Index in recent years, although it has historically offered a higher dividend yield.

Growth Trajectory:

Growth is expected to be in line with the overall market and dividend-paying companies’ performance.

Liquidity:

• Average Trading Volume: Approximately 56,000 shares
• Bid-Ask Spread: 0.05%

Market Dynamics:

• Economic Indicators: Inflation, interest rates, and economic growth impact the performance of large-cap equities.
• Sector Growth Prospects: Dividend-paying companies are generally less volatile than the overall market.
• Market Conditions: Market volatility can significantly impact ETF pricing.

Competitors:

• Vanguard High Dividend Yield ETF (VYM) - Market share: 38.4%
• SPDR S&P Dividend ETF (SDY) - Market share: 15.1%
• iShares Core Dividend Growth ETF (DGRO) - Market share: 9.8%

Expense Ratio:

0.45%

Investment Approach and Strategy:

• Strategy: Passively tracks the Metaurus US Large Cap Target Dividend 400 Index.
• Composition: Primarily invests in blue-chip stocks across various industries, with a focus on high dividend yields.

Key Points:

• High dividend yield
• Exposure to large-cap U.S. stocks
• Passive management and low expense ratio

Risks:

• Market Risk: DIVY's performance is tied to the performance of the broad market and the dividend-paying companies it holds.
• Interest Rate Risk: Rising interest rates can affect the attractiveness of dividend-paying stocks.
• Dividend Risk: Dividends are not guaranteed and can be reduced or eliminated.
• Volatility: Large-cap stocks can experience significant price fluctuations.

Who Should Consider Investing:

Investors seeking a high level of current income and some capital appreciation potential. This ETF is suitable for long-term investors with a moderate risk tolerance.

Fundamental Rating Based on AI:

8/10

Justification: DIVY offers a compelling combination of high dividend yield, low fees, and exposure to well-established companies. While its recent performance has lagged the market, its focus on dividend-paying companies with a long history of payouts makes it a relatively safe option for income-oriented investors. However, its limited market share and small size compared to its competitors might affect its long-term performance.

Resources and Disclaimers:

• ETF Database: https://etfdb.com/etf/DIVY/
• Pacer Funds Trust Website: https://www.paceretfs.com/etfs/metaurus-us-large-cap-target-dividend-400-etf-divy
• Please note that this analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making any investment decisions.