Pacer Pacific Asset Floating Rate High Income ETF (FLRT)

Overview

The Pacer Pacific Asset Floating Rate High Income ETF (FLRT) seeks to provide a high level of current income by investing primarily in floating rate debt securities, also known as 'floaters' or adjustable-rate loans. It targets a diversified portfolio of primarily US dollar-denominated floating rate loans.

Reputation and Reliability

Pacer ETFs is known for its rules-based indexing approach and innovative ETF designs, demonstrating a strong commitment to delivering targeted investment solutions.

Management Expertise

Pacer ETFs benefits from a dedicated management team with extensive experience in index construction and ETF management, ensuring rigorous portfolio oversight and efficient execution of the fund's strategy.

Goal

To seek a high level of current income.

Investment Approach and Strategy

Strategy: FLRT does not track a specific index. It employs a proprietary methodology to select and weight floating rate debt securities.

Composition The ETF primarily holds floating rate loans, also known as senior loans or leveraged loans. These are debt instruments whose interest rates adjust periodically based on a benchmark rate, such as LIBOR or SOFR.

Market Share: FLRT holds a relatively small market share within the floating rate loan ETF segment.

Total Net Assets (AUM): 132400000

Key Competitors

• Invesco Senior Loan ETF (BKLN)
• SPDR Blackstone Senior Loan ETF (SRLN)
• First Trust Senior Floating Rate ETF (FTFR)

Competitive Landscape

The floating rate loan ETF market is highly competitive, with a few large players dominating the space. FLRT faces stiff competition from established ETFs with greater scale and liquidity. FLRT's advantage lies in its potentially higher yield due to its focused approach and credit selection process. However, this may come with increased credit risk compared to broadly diversified competitors.

Historical Performance: Historical performance data is needed and will vary. Contact a broker for updated historical data and performance trends.

Benchmark Comparison: Benchmark comparison data unavailable without specific historical performance metrics. Performance may be compared to the S&P/LSTA Leveraged Loan Index, though the fund does not track it directly.

Expense Ratio: 0.68

Average Trading Volume

FLRT's average trading volume is moderate, which may affect the ease of buying and selling shares, particularly for large orders.

Bid-Ask Spread

The bid-ask spread can vary depending on market conditions and trading volume, potentially impacting transaction costs.

Market Environment Factors

Economic growth, interest rate movements, and credit market conditions significantly impact FLRT. Rising interest rates generally benefit floating rate loans, while economic downturns can increase credit risk.

Growth Trajectory

Growth trajectory depends on investor demand for high-yield income and the fund's ability to consistently deliver attractive returns relative to its risk profile. Changes in the credit market could cause the ETF to shift its strategy and holdings.

Competitive Edge

FLRT aims to achieve a higher income stream by strategically selecting floating rate securities that may offer enhanced yields. This focused approach could differentiate it from competitors offering broader market exposure. FLRT's active management style allows it to adapt to changing market conditions and potentially mitigate downside risks. However, this active management also introduces the risk of underperformance if the manager's decisions are not successful.

Volatility

FLRT's volatility is influenced by the credit quality of its holdings and prevailing market sentiment. Floating rate loans are generally less sensitive to interest rate changes than fixed-rate bonds but are exposed to credit risk.

Market Risk

The ETF is subject to market risk, including the risk of defaults on underlying loans, as well as liquidity risk and sector-specific risks within the leveraged loan market.

Ideal Investor Profile

FLRT is suitable for income-seeking investors who understand the risks associated with floating rate loans and are comfortable with moderate volatility. Those seeking enhanced yield potential within a fixed income portfolio.

Market Risk

FLRT may be suitable for both long-term investors seeking a stable income stream and active traders looking to capitalize on short-term interest rate movements.

The Pacer Pacific Asset Floating Rate High Income ETF (FLRT) aims for high current income by investing in floating rate loans. It is an actively managed ETF and so requires active monitoring. The expense ratio is 0.68% and it is best for income-seeking investors. Its success depends on the creditworthiness of its holdings and the performance of the leveraged loan market.

Data Sources:

• Pacer ETFs Website
• ETF.com
• Morningstar

Disclaimers:

This analysis is based on publicly available information and is not financial advice. Investment decisions should be made after consulting with a qualified financial advisor. Past performance is not indicative of future results.