Pacer BioThreat Strategy ETF retains its Morningstar Medalist Rating of Bronze. The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile.  

 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 an underweight in yield exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low yield exposure is rooted in holding fewer stocks with high dividend or buyback yields -- instead, typically holding stocks in an early stage of development. The team managing this passive strategy earns a Below Average People Pillar rating. The strategy's parent organization is industry standard, albeit with some strong attributes like overall attractive fees and a high success ratio across its product shelf. This earns the firm an Average Parent Pillar rating.

Analyst Rating

NVIDIA

Netflix

Amazon

Merck

Walmart

Thermo Fisher Scientific

Danaher

Lowe's

Home Depot

Abbott Labs

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 BioThreat Strategy ETF earns a High Process Pillar rating. The most significant 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 influences the rating. 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. Their compelling success ratio suggests that the firm does well for investors and that this fund may benefit from that. The parent firm's superior risk-adjusted performance, as shown by its average overall Morningstar Rating of 3.3 stars, supports the process as well.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the performance, before fees and expenses, of the LifeSci BioThreat Strategy Index (the “index”).  The index is generally composed of U.S.-listed stocks of companies whose products or services help protect against, endure, or recover from biological threats to human health. The Advisor attempts to invest all, or substantially all, and of its assets in the component securities that make up the index. It is non-diversified. 

 The portfolio is overweight in healthcare and consumer cyclical relative to the category average by 38.3 and 4.7 percentage points, respectively. The sectors with low exposure compared to category peers are technology and financial services, underweight the average by 17.0 and 13.4 percentage points of assets, respectively. The portfolio is positioned across 54 holdings and is relatively concentrated. In particular, 52.5% of the fund’s assets are housed within the top 10 holdings, as opposed to the typical peer's 48.8%. And finally, in terms of portfolio turnover, on a year-over-year basis, 10% 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 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 holds the team back. 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 BioThreat ETF

VIRS tracks a market-cap weighted index of US companies whose products or services address biological threats to human health.

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News for Pacer BioThreat ETF ETF (VIRS)