Pacer ETFs debuted its first-ever bond ETF on Wednesday on NYSE Arca: the Pacer Trendpilot US Bond ETF (PTDB).
As a part of Pacer’s Trendpilot Series, which launched in 2015, PTDB will be part of a fund family known for its rules-based strategy aiming to offer risk-mitigation. The Trendpilot Series has seen immense growth over the years since its initial launch.
“We’ve experienced rapid growth and adoption by financial advisors and investors looking for a strategy that offers risk-mitigation tactics, especially in today’s volatile market environment,” says Sean O’Hara, President of Pacer ETFs Distributors. “Our new Trendpilot Bond ETF gives investors exposure to potentially higher-yielding fixed-income assets that complement a portfolio, but with the added benefit of a risk management strategy.”
Similar to the approach found in other Trendpilot funds, PTDB will implement a passive, trend-following strategy, directing exposure between the S&P U.S. High Yield Corporate Bond Index and the S&P U.S. Treasury Bond 7-10 Year Index based on the 100-day simple moving average (100-day SMA) of the fund’s risk ratio.
Calculating Risk Ratio
Dividing the value of the S&P U.S. High Yield Corporate Bond Index by the value of the S&P U.S. Treasury Bond 7-10 Year Index calculates the risk ratio. When the risk ratio closes above the 100-day SMA for five consecutive business days, the fund will have 100% exposure to the S&P U.S. High Yield Corporate Bond Index.
If the risk ratio closes below the 100-day SMA for five consecutive business days, the fund will switch exposure to 50% of the S&P U.S. High Yield Corporate Bond Index and 50% of the S&P U.S. Treasury Bond 7-10 Year Index. The fund will switch to 100% exposure to the S&P U.S. Treasury Bond 7-10 Year Index when the risk ratio’s 100-day SMA closes lower than its value from five business days earlier.
“At Pacer ETFs, we pride ourselves on offering innovative and diverse investment options that meet the needs of our investors, which has been a key driver of our rapid growth,” says Joe Thomson, Founder, and President of Pacer Financial. “Expanding our successful Trendpilot strategy into the fixed-income market shows our dedication to our client-first mentality.”
About Pacer ETFs
Pacer ETFs is a strategy-driven, exchange traded fund provider with 21 ETFs and over $4.96 billion in assets under management as of October 18th, 2019. Pacer ETFs is focused on addressing investors’ needs through its four fund families: the Pacer Trendpilot® Series, Pacer Cash Cows Index® Series, Pacer Custom ETF Series, and Pacer Leaders ETF Series. Pacer ETFs employs a rules-based, passive management approach to track S&P, NASDAQ, FTSE Russell, and Custom Indexes.