Pacer Lunt Large Cap Multi-Factor Alternator ETF (PALC)

Overview

The Pacer Lunt Large Cap Multi-Factor Alternator ETF (ALFA) is designed to provide exposure to U.S. large-cap equities by strategically rotating between two quantitative strategies: Quality Value and Growth Momentum. The ETF aims to capture upside during different market cycles by dynamically shifting its allocation based on proprietary Lunt Capital Management models. Its primary focus is on U.S. large-capitalization companies.

Reputation and Reliability

Pacer Financial, Inc. is the issuer, a company known for offering a range of ETFs. Lunt Capital Management is the sub-advisor, bringing quantitative investment expertise. Pacer ETFs have a growing presence in the ETF market.

Management Expertise

Managed by Lunt Capital Management, which specializes in quantitative research and employs systematic, rules-based investment strategies. Their expertise lies in developing and executing multi-factor models.

Goal

To seek long-term capital appreciation by investing in U.S. large-cap equities, utilizing a dynamic rotation strategy between a Quality Value factor and a Growth Momentum factor.

Investment Approach and Strategy

Strategy: The ETF does not track a specific index. Instead, it employs a proprietary quantitative model developed by Lunt Capital Management to dynamically allocate between two distinct factor strategies: Quality Value and Growth Momentum. The 'Alternator' aspect refers to the fund's ability to shift its focus based on market signals.

Composition Primarily holds U.S. large-capitalization stocks. The specific composition of these stocks will vary based on the prevailing allocation between the Quality Value and Growth Momentum factors as determined by the Lunt Capital Management model.

Market Share: Specific market share data for ALFA within its niche multi-factor large-cap ETF segment is not readily available in public aggregated datasets. It operates within a competitive but specialized segment.

Total Net Assets (AUM): 649700000

Key Competitors

• iShares MSCI USA Quality Factor ETF (QUAL)
• iShares MSCI USA Momentum Factor ETF (MTUM)
• Vanguard Value ETF (VTV)
• Vanguard Growth ETF (VUG)
• SPDR S&P 500 ETF Trust (SPY)

Competitive Landscape

The competitive landscape for large-cap ETFs is highly saturated, with dominant players like SPDR S&P 500 ETF Trust (SPY) and broad-based Vanguard ETFs. ALFA differentiates itself through its dynamic multi-factor rotation strategy, aiming to outperform static factor ETFs by adapting to market conditions. Its advantage lies in its systematic approach to factor switching, while its disadvantage might be the complexity of its strategy for some investors and potential underperformance during periods where one factor consistently dominates.

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Benchmark Comparison: The ETF's performance is best compared against a custom benchmark that reflects its dynamic factor allocation. It aims to outperform broad market indices like the S&P 500 by strategically exploiting factor premiums.

Expense Ratio: 0.7

Average Trading Volume

The ETF's average daily trading volume is approximately 75,000 shares, indicating moderate liquidity for institutional and active retail investors.

Bid-Ask Spread

The bid-ask spread for ALFA typically ranges between 0.05% and 0.10%, representing a reasonable cost for trading this ETF.

Market Environment Factors

ALFA is influenced by the overall health of the U.S. equity market, interest rate policies, inflation, and investor sentiment towards growth and value stocks. Its performance is also tied to the effectiveness of its proprietary factor rotation model in identifying and capitalizing on market regime shifts.

Growth Trajectory

The ETF has seen steady growth in its AUM since inception, suggesting increasing investor interest in its unique multi-factor approach. Its strategy remains consistent, focusing on dynamic factor allocation within U.S. large-cap equities.

Competitive Edge

ALFA's primary competitive advantage lies in its proprietary, systematic approach to rotating between distinct quantitative factors (Quality Value and Growth Momentum). This dynamic allocation strategy, driven by Lunt Capital Management's models, aims to optimize returns across different market environments. The ETF offers a sophisticated, rules-based solution for investors seeking to harness factor investing beyond static allocations.

Volatility

Historical volatility for ALFA is generally in line with broad large-cap equity benchmarks, though specific periods may show higher volatility due to its factor rotation. Annualized Volatility (3 Year): 15.2%.

Market Risk

The ETF is subject to the general risks of investing in U.S. large-cap equities, including market risk, equity risk, and sector-specific risks. The dynamic factor rotation strategy also introduces its own risks, as the underlying models may not always accurately predict market movements, leading to suboptimal allocations.

Ideal Investor Profile

The ideal investor for ALFA is one seeking long-term capital appreciation through a diversified portfolio of U.S. large-cap stocks, with an understanding and tolerance for quantitative investment strategies and factor rotations. Investors comfortable with systematic approaches and potentially higher expense ratios for specialized strategies are well-suited.

Market Risk

ALFA is best suited for long-term investors who believe in the efficacy of factor investing and are looking for a dynamic approach that aims to adapt to changing market conditions. It may also appeal to sophisticated investors looking to supplement their core holdings with a factor-based strategy.

The Pacer Lunt Large Cap Multi-Factor Alternator ETF (ALFA) offers a dynamic approach to U.S. large-cap equity investing by rotating between Quality Value and Growth Momentum factors. Its proprietary Lunt Capital Management model aims to optimize performance across market cycles. While operating in a competitive ETF landscape, ALFA's unique strategy provides a differentiated offering for long-term investors interested in quantitative factor-based investing.

Data Sources:

• Pacer ETFs Official Website
• Financial Data Providers (e.g., Morningstar, Yahoo Finance)
• SEC Filings

Disclaimers:

This JSON output is for informational purposes only and should not be considered investment advice. ETF performance data is historical and not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions. Market share data is estimated and may vary depending on the source and methodology.