Weakness in Pacer CFRA-Stovall Eq WghtSeasnlRottnETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The team managing the passive strategy earns a Below Average People Pillar. The strategy earns a Below Average 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 quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy's parent organization is industry standard, albeit with some strong attributes like overall reasonable fees and a favorable lineup success ratio. This earns the firm an Average Parent Pillar rating.

Analyst Rating

Newmont Mining

Freeport-McMoRan

Eastman Chemical

International Flavors & Fragrances

DuPont de Nemours

WestRock

Steel Dynamics

LyondellBasell Industries

Martin Marietta Materials

Corteva Inc

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Pacer CFRA-Stovall Eq WghtSeasnlRottnETF earns a Below Average Process Pillar rating. The process benefits from the parent firm's five-year risk-adjusted success ratio of 69%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. However, the rating is weakened by the fund's mediocre long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. The parent firm's five-year retention rate of 52% also holds the process back.

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 CFRA-Stovall Equal Weight Seasonal Rotation Index.  The index uses an objective, rules-based methodology to track the performance of a semi-annual rotation of certain sectors within the S&P 500 ® Equal Weight Index. The Advisor attempts to invest all, or substantially all, and of its assets in the component securities that make up the fund’s underlying index or in one or more ETFs that track the performance of all or a portion of such component securities in the same approximate proportion as in the index. 

 The portfolio is overweight in consumer cyclical and basic materials relative to the category average by 19.7 and 15.4 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and healthcare, underweight the average by 13.4 and 13.3 percentage points of assets, respectively. The portfolio is composed of 225 holdings and is diversified among those holdings. In its most recent portfolio, 9.1% of the strategy's assets were concentrated in the top 10 fund holdings, compared to the category’s 48.8% average. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 227% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Below Average

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 outperformed their respective category's median return for the period. However, the rating is weakened 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.

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 CFRA-Stovall Equal Weight Seasonal Rotation Index ETF

SZNE tracks an equal-weighted index of large-cap stocks following a seasonal rotation strategy.

Some stock market pros believe they have a way to do better than the six-months-on, six-months-off seasonal trading pattern known as the “Halloween Indicator.” Their strategy is not to “sell in May and go away” — avoiding the market's typically worst six months.

It's decision time: Do you avoid the market's worst six months or hold on?

Vanguard Information Technology ETF

Vanguard Real Estate ETF

Energy Select Sector SPDR Fund

Consumer Staples Select Sector SPDR Fund

Health Care Select Sector SPDR Fund

Stock market volatility remained high in April, leading advisors to look more into defensive sector ETFs. In April, six U.S. sector focused ETFs were among the 20 most viewed tickers on the ETF Database platform.

Getting Defensive, Investors Shift Sector Focus in April

ETF Trends CEO Tom Lydon discussed the Pacer CFRA-Stovall Equal Weight Seasonal Rotation ETF (SZNE) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show. SZNE seeks to track the total return performance, before fees and expenses, of the Pacer CFRA-Stovall Equal Weight Seasonal Rotation Index.

ETF of the Week: Pacer CFRA-Stovall Equal Weight Seasonal Rotation ETF (SZNE)

With the traditional weak summer months of the year behind us, exchange traded fund investors can look to a seasonal rotation strategy that capitalizes on the strength the markets typically experience during the winter season.

‘Tis The Season for an ETF Rotation Strategy

There are seasonal trends in the equity markets and investors can take advantage of a seasonal rotation ETF strategy to provide exposure to areas that have historically performed better during certain periods of the year.

Seasonal Trends Can Be Your Friend with Rotation ETF Strategy

Equity investors may notice that markets may follow a seasonal ebb and flow, especially when comparing the traditional summer and winter months.

News for Pacer CFRA-Stovall Equal Weight Seasonal Rotation Index ETF ETF (SZNE)