Pacer Trendpilot International ETF retains its Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the second-cheapest 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 underweight position in liquidity exposure and quality exposure compared with category peers. Low liquidity risk exposure is attributed to stocks with a low trading volume, limiting managers' flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. 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 reasonable 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 Trendpilot International ETF earns a High Process Pillar rating. The main driver of 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 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 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, supports the rating as well.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the total return performance, before fees and expenses, of the Pacer Trendpilot International Index.  The index is based on a proprietary methodology developed and maintained by Index Design Group, an affiliate of Pacer Advisors, Inc., the fund's investment adviser. Under normal circumstances, and at least 80% of the fund's total assets (exclusive of collateral held from securities lending) will be invested in the component securities of the index and investments that have economic characteristics that are substantially identical to the economic characteristics of such component securities. 

 The portfolio has allocations in its top two sectors, financial services and healthcare, that are similar to the category. The sectors with low exposure compared to category peers are industrials and communication services; however, the allocations are similar to the category. The portfolio is composed of 523 holdings and is relatively concentrated. Specifically, 18.6% of the strategy's assets are housed within the top 10 holdings, compared with the category’s 15.4% average. And finally, in terms of portfolio turnover, on a year-over-year basis, 3% of the fund's holdings have changed, 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 outperformed their respective category's median return for the period. However, the rating is held back by the instability of management 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 limits 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 Trendpilot International ETF

PTIN tracks an index that allocates to a proprietary ex-US Large-Cap Index and/or 3-month US T-bills, according to momentum.

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Trend following investors can appreciate the exchange traded fund strategy that incorporates Pacer's Trendpilot approach, along with the recent enhancements to the methodology that make it even more responsive to the modern markets. Having a risk management plan for equity exposure can give investors confidence rather than maintaining large cash positions.

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In a growing ETF space, innovation is a key factor to differentiate yourself from the masses, and Pacer ETFs has been doing just that as evidenced in 2019. Investor demand helped Pacer accumulate $2.4 billion in assets under management last year, ending with a total AUM of $5.62 billion, a 75% percent increase from Dec.

News for Pacer Trendpilot International ETF ETF (PTIN)