Pacer CFRA-Stovall Equal Weight Seasonal Rotation (SZNE)

Overview

The Pacer CFRA-Stovall Equal Weight Seasonal Rotation ETF (SZNE) aims to provide capital appreciation by investing in sectors based on a seasonal rotation strategy, utilizing CFRA's sector recommendations. It allocates equally to selected sectors and adjusts holdings based on historical performance patterns.

Reputation and Reliability

Pacer ETFs is known for its rules-based, index-tracking ETFs and generally has a good reputation for transparency and innovation.

Management Expertise

Pacer ETFs has a team of experienced investment professionals specializing in structured and strategic investment solutions.

Goal

To seek capital appreciation by utilizing a seasonal rotation strategy across different market sectors.

Investment Approach and Strategy

Strategy: The ETF uses a rules-based approach based on CFRA's sector recommendations to rotate into sectors exhibiting strong seasonal performance, aiming to outperform the broad market.

Composition The ETF holds equities of companies within selected sectors, primarily large-cap US stocks. The sector allocation changes dynamically based on the seasonal rotation strategy.

Market Share: SZNE's market share in the sector rotation ETF category is moderate, as it's not the largest but has a decent following.

Total Net Assets (AUM): 124700000

Key Competitors

• First Trust Dorsey Wright Focus 5 ETF (FV), Invesco DWA Momentum ETF (PDP), iShares MSCI USA Momentum Factor ETF (MTUM)

Competitive Landscape

The ETF industry is highly competitive, with numerous ETFs offering various investment strategies. SZNE distinguishes itself with its seasonal rotation and equal weighting approach. Advantages include potential for outperformance during favorable seasonal periods. Disadvantages include the complexity of the strategy and potential underperformance if sector rotations are not successful.

Historical Performance: Historical performance data is needed to evaluate the ETFu2019s past returns across different time periods (e.g., 1-year, 3-year, 5-year, and 10-year).

Benchmark Comparison: Performance needs to be compared against a suitable benchmark like the S&P 500 or a sector rotation index to determine its effectiveness.

Expense Ratio: 0.75

Average Trading Volume

The average trading volume for SZNE is moderate, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread for SZNE is typically reasonable, but it can widen during periods of market volatility.

Market Environment Factors

Economic indicators, sector growth prospects, seasonal patterns, and overall market sentiment influence SZNE's performance. Interest rate changes and inflation can also affect the chosen sectors.

Growth Trajectory

SZNE's growth depends on the continued interest in sector rotation strategies and the effectiveness of CFRA's sector recommendations. Changes in the underlying index methodology or holdings could impact future performance.

Competitive Edge

SZNE's competitive advantage lies in its unique approach combining seasonal rotation strategies with CFRA's research and equal weighting. This distinct strategy differentiates it from traditional market-cap weighted ETFs. The rules-based approach provides transparency, and the equal weighting may offer diversification benefits. However, the strategy's success hinges on the accuracy of seasonal patterns and CFRA's sector calls.

Volatility

The ETF's volatility depends on the volatility of the underlying sectors and the effectiveness of the rotation strategy. Volatility can be assessed by examining historical price fluctuations.

Market Risk

The market risk includes the potential for losses due to overall market declines or underperformance of selected sectors. The ETF is also subject to risks associated with sector rotation strategies, such as mistiming market entries and exits.

Ideal Investor Profile

The ideal investor for SZNE is one seeking capital appreciation and comfortable with a rules-based, actively managed sector rotation strategy. They should have a moderate to high risk tolerance and understand sector-specific investment strategies.

Market Risk

SZNE may be suitable for long-term investors who believe in sector rotation and are seeking to potentially outperform the market. It is less suitable for passive index followers who prefer broad market exposure.

SZNE offers a distinctive approach to sector investing by implementing a seasonal rotation strategy based on CFRA's sector recommendations and employing equal weighting. This rules-based and transparent approach differentiates it from conventional market-cap weighted ETFs. It caters to investors seeking capital appreciation through sector rotation, accepting the risks associated with active management and sector concentration. Ultimately, SZNE is a strategic investment choice suitable for sophisticated investors with a clear understanding of its dynamics.

Data Sources:

• Pacer ETFs Website
• CFRA Research
• ETF.com
• Morningstar

Disclaimers:

The information provided is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Investors should carefully consider their investment objectives and risk tolerance before investing in any ETF.