“The defensive sectors, Health Care and Consumer Staples, have performed better than the overall market during the period May through October,” said O’Hara. “The period between November through April shows that Consumer Discretionary, Info Tech, Materials and Industrials have historically performed better than the overall market. So, the ideal investor for SZNE is a long-term Investor who desires an alternative to simply buying the broad market through one of the cheap beta ETFs because they seek to receive higher returns over time.”
Resilience in the Face of External Factors
While the month of October was racked by volatility, the capital markets have been tested by persistent trade wars constantly, particularly between the United States and China. Today, the markets got a boost when U.S. President Donald Trump tweeted that he “just had a long and very good conversation with President Xi Jinping of China,” signaling that trade negotiations with the second largest economy are moving forward positively.
When trade wars were racking the markets, SZNE was able to neutralize its effects via the seasonal rotation strategy since it launched in late July–credit that to a move into health care and consumer staples.
“Since its launch, SZNE has been less reactive to some of the external shocks in the market like trade, because of how it is allocated currently in health care and staples,” said O’Hara. “Health care names have been less sensitive to the overall threat of trade and tariffs.”
Furthermore, since the fund utilizes a passive strategy, haphazard adjustments to the portfolio are avoided even during trying times, such as October’s volatility. It speaks to SZNE’s resilience in the markets and its unflinching strategy–“sell in May and go away” can be supplemented with “trust the process.”
“There were and will be no adjustments to the Index or Portfolio due to any outside influence as it is designed to be and is a passive strategy,” said O’Hara.
Pacer ETFs is focused on addressing investors’ needs through its four fund families, the Pacer Trendpilot Series, Pacer Cash Cows Index Series, Pacer Leaders Series and Pacer Custom ETF Series. Pacer ETFs employ a rules-based, passive management approach to track S&P, NASDAQ, FTSE Russell, and Custom Indexes.
Investors can visit PacerETFs for more information on their various funds.
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