Pacer Lunt MidCap Multi-Factor Alt ETF retains its Morningstar Medalist Rating of Gold. The portfolio maintains a sizable cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The strategy's sensible investment philosophy merits a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position 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 firm has some investor-friendly attributes, like overall low fees and a strong success ratio across its product lineup. As a result, the firm gets an Average Parent Pillar rating.

Analyst Rating

Manhattan Associates

Williams-Sonoma

EMCOR Group

Vistra Energy

Reliance Steel & Aluminum

Owens Corning

Carlisle Companies

TopBuild

Toll Brothers

Watsco

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 Lunt MidCap Multi-Factor Alt ETF earns a High Process Pillar rating. 

The primary contributor to the rating is that this fund tracks an index. Historical data, like 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 influences the rating. 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 relatively high success ratio suggests that the firm does well for investors and that this fund may benefit from that. The parent firm's strong risk-adjusted performance, as shown by its average overall Morningstar Rating of 3.3 stars, influences the rating as well.

 This strategy tends to pick smaller market-cap companies compared with the average fund in its peer group, the Mid-Cap Blend Morningstar Category.  But in terms of style (value/growth) exposure, it does not have much of a bias and resembles the category's typical portfolio. Looking at additional factor exposure, this fund has constantly tilted toward stocks with higher trading volumes than its Morningstar Category Peers over the past few years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also exhibited a tilt toward high-volatility stocks over these years, meaning it has invested in companies that have a higher historical standard deviation of returns. Such exposure tends to pay off when markets are hot and to be costly when they are not. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. Additionally, the strategy had more exposure to high-quality stocks compared with Morningstar Category peers in recent months. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets.  More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in industrials and basic materials relative to the category average by 10.5 and 3.1 percentage points, respectively. The sectors with low exposure compared to category peers are real estate and healthcare, underweight the average by 5.8 and 5.8 percentage points of assets, respectively. The portfolio is composed of 126 holdings and is relatively top-heavy. Of the strategy's assets, 30.4% are concentrated within the top 10 holdings, as opposed to the typical peer's 15.4%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, more than 400% 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 benefits from 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 turnover 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

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MALVERN, Pa.--(BUSINESS WIRE)--Pacer ETFs (“Pacer”), an ETF provider that offers strategy-driven, rules-based ETFs, announces the Pacer Factor ETF Series (“Factor series”) has surpassed $1 billion in assets under management. Pacer's Factor series has accumulated roughly $450 million, or 75%, of those assets since January 2022 as demand for formulaic, factor-driven investment products grows among investors and advisors in an increasingly volatile market. “We have seen a rapid increase in demand

News for Pacer Lunt MidCap Multi-Factor Alternator ETF ETF (PAMC)