Pacer Trendpilot 100 ETF (PTNQ)

Overview

The Pacer Trendpilot 100 ETF (PTNQ) aims to provide capital appreciation while mitigating downside risk by employing a trend-following strategy on the Nasdaq-100 Index. The fund switches between investing in the Nasdaq-100, 3-Month US Treasury bills, or a 50/50 blend, depending on the index's 200-day simple moving average. This adaptive strategy seeks to participate in market gains while preserving capital during downturns.

Reputation and Reliability

Pacer ETFs is a well-regarded ETF provider known for its rules-based, index-tracking ETFs. They have established a solid track record for delivering innovative investment solutions.

Management Expertise

Pacer ETFs has a team of experienced professionals with expertise in investment management, index construction, and ETF operations. They focus on quantitative and systematic investment approaches.

Goal

The primary investment goal is capital appreciation with downside risk mitigation.

Investment Approach and Strategy

Strategy: The fund uses a trend-following strategy based on the Nasdaq-100 Index's 200-day simple moving average. It switches between investing in the index, 3-Month US Treasury bills, or a 50/50 blend of both based on the indexu2019s trend.

Composition The ETF holds either stocks of the Nasdaq-100 Index companies, 3-Month US Treasury bills, or a combination of both, depending on the prevailing trend.

Market Share: PTNQ's market share is relatively small compared to broader Nasdaq-100 ETFs.

Total Net Assets (AUM): 108461083.2

Key Competitors

• Invesco QQQ Trust (QQQ)
• Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE)
• First Trust NASDAQ-100 Equal Weighted ETF (QQEW)
• Schwab NASDAQ 100 Index ETF (SCHQ)

Competitive Landscape

The competitive landscape is dominated by large, established Nasdaq-100 ETFs like QQQ. PTNQ differentiates itself with its trend-following strategy, offering potential downside protection, which may attract investors seeking a more defensive approach. However, its smaller AUM and potentially higher tracking error compared to QQQ can be disadvantages.

Historical Performance: Historical performance varies based on market conditions and the effectiveness of the trend-following strategy. Past performance is not indicative of future results.

Benchmark Comparison: The ETF's performance should be compared to the Nasdaq-100 Index and a blend of the index and short-term Treasury bills to assess its effectiveness in achieving its objective.

Expense Ratio: 0.6

Average Trading Volume

The average trading volume for PTNQ is moderate, indicating reasonable liquidity.

Bid-Ask Spread

The bid-ask spread can fluctuate depending on market conditions but is generally reasonable for an ETF of its size.

Market Environment Factors

Economic growth, interest rate movements, and overall market sentiment can significantly impact PTNQ's performance. Periods of high volatility may lead to more frequent shifts between asset classes.

Growth Trajectory

The growth trajectory of PTNQ depends on its ability to attract investors seeking downside protection and its effectiveness in navigating market cycles. Future growth may involve refinements to its trend-following strategy.

Competitive Edge

PTNQ's primary advantage is its trend-following strategy, which automatically adjusts the portfolio's asset allocation based on market trends. This aims to provide downside protection during market downturns while still participating in potential gains during uptrends. It offers a rules-based approach to managing market risk, which may appeal to investors seeking a more disciplined investment strategy. The ETF's ability to adapt to changing market conditions distinguishes it from passively managed Nasdaq-100 ETFs.

Volatility

PTNQ's volatility can vary depending on its asset allocation. When fully invested in the Nasdaq-100, its volatility will be similar to the index. When allocated to Treasury bills, its volatility will be significantly lower.

Market Risk

The primary market risk is associated with the Nasdaq-100 Index. Downturns in the technology sector or overall market declines can negatively impact the ETF's performance. There is also the risk that the trend-following strategy may not perfectly time market movements.

Ideal Investor Profile

The ideal investor is one seeking capital appreciation with a focus on downside risk mitigation. Investors who are comfortable with a rules-based, trend-following approach and who want exposure to the Nasdaq-100 index with some degree of protection during bear markets might find this ETF suitable.

Market Risk

This ETF may be suitable for long-term investors seeking a more defensive approach to investing in the Nasdaq-100. It can also be used by active traders who want to implement a trend-following strategy.

The Pacer Trendpilot 100 ETF (PTNQ) offers exposure to the Nasdaq-100 with a unique trend-following strategy designed to mitigate downside risk. By dynamically adjusting its asset allocation between the index and Treasury bills, the fund seeks to participate in market gains while protecting capital during downturns. It's suitable for investors seeking a defensive approach to Nasdaq-100 investing and those comfortable with a rules-based investment methodology. While it faces competition from larger Nasdaq-100 ETFs, its adaptive strategy provides a differentiated value proposition. Investors should carefully consider its expense ratio and historical performance when evaluating its suitability for their portfolio.

Data Sources:

• Pacer ETFs website
• ETF.com
• Morningstar
• FactSet

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be based on individual circumstances and a thorough understanding of the risks involved. Past performance is not indicative of future results.