Pacer BlueStar Digital Entertainment ETF retains its Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The strategy's investment process inspires confidence and earns a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The team managing this passive strategy earns a Below Average People Pillar rating. The strategy's parent organization doesn't stand out, earning the firm an Average Parent Pillar rating. It has displayed a handful of investor-friendly attributes including overall low fees and a favorable lineup success ratio.

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Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Pacer BlueStar Digital Entertainment ETF earns a High Process Pillar rating. The predominant contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The parent firm's five-year risk-adjusted success ratio of 69% also contributes to the process. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. Their impressive success ratio suggests that the firm does well for investors and that this fund may benefit from that. The parent firm's excellent risk-adjusted performance, as shown by its average overall Morningstar Rating of 3.3 stars, contributes to the process as well.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the total return performance of the BlueStar Global Online Gambling, Video Gaming, and eSports Index (the “index”).  The fund employs a “passive management” investment approach designed to track the total return performance of the index. The index is a rules-based index that consists of globally-listed stocks and depositary receipts of digital entertainment companies. Under normal circumstances, and at least 80% of the fund’s net assets (plus any borrowings for investment purposes) will be invested in companies that derive at least 50% of their revenues from Digital Entertainment. The fund is non-diversified. 

 The portfolio is overweight in consumer cyclical and communication services relative to the category average by 50.1 and 17.9 percentage points, respectively. The sectors with low exposure compared to category peers are technology and industrials, underweight the average by 62.2 and 2.5 percentage points of assets, respectively. The portfolio is composed of 53 holdings and is about as top-heavy as the category average, with 54.1% of assets in the top 10 holdings. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 40% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

High

Process

Pacer’s team earns a Below Average People Pillar rating. The team is supported by its parent firm's five-year success ratio of 69%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. However, the rating is held back by the instability of talent across its parent firm. The firm's asset-weighted manager tenure of seven years suggests it could do more to retain portfolio managers. The instability of its management team also detracts from the team. The fund last saw a manager change two years ago.

Below Average

People

Pacer's track record as a steward is mixed, leading to an Average Parent Pillar rating. One notable advantage of Pacer is its below-average fees. On average, the firm's open-end and exchange-traded fund fees fall in the second-lowest quintile of category peers. The product lineup at Pacer has exhibited exemplary durability compared with peer asset managers when looked at over the past five years. Notably, its five-year risk-adjusted success ratio stands at 69%, meaning that 69% of its products have both survived and beaten their respective category median on a risk-adjusted basis. Portfolio management turnover at Pacer is higher than at peer firms, detracting from the overall assessment of the firm's stewardship. Turnover in the portfolio-management ranks can happen for a number of reasons, including mergers and liquidations, portfolio managers moving into other roles, or portfolio managers leaving the firm. In some cases, such change may not signal a serious or immediate problem at the firm, but can still be disruptive for investors, hinder the effectiveness of a firm’s investment processes, or suggest a weaker investment culture.

Average

Parent

Pacer BlueStar Digital Entertainment ETF

ODDS tracks a tier-weighted index of globally-listed companies that focuses on the digital entertainment industry, including online gambling, video gaming, content streaming, and eSports.

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MALVERN, Pa.--( BUSINESS WIRE )--Pacer ETFs celebrates an incredible year of growth driven by its suite of strategy-driven, rules-based ETFs, capped off by the outstanding achievement of reaching $19.6 billion in assets as of Dec. 30, 2022. After starting 2022 with $10.2 billion in AUM, Pacer achieved a 92.2% growth rate, nearly doubling its assets. Within the first week of the New Year, Pacer surpassed $20 billion in assets signaling a strong start for 2023.

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News for Pacer BlueStar Digital Entertainment ETF ETF (ODDS)