For those investors looking for strategy driven ETFs that seek to help investors prepare for retirement, two new ETFs by Pacer Financial may be a great fit.
Unlike some other fund offerings, Pacer uses rules-based indices to minimize downside risk and screen for quality stocks. This means that the company utilizes rigid technical analysis strategies to determine buy and sell decisions, simplifying the investment process, and potentially reducing risk for investors.
According to the Pacer Website, the company offers the following information about the ETF offerings:
- The Trendpilot Series ETFs use a trend following strategy that aims to participate in the market when it is trending up, maintain some exposure during short-term market declines, and exit the market when it is trending down.
- The Cash Cows Index Series ETFs aim to provide capital appreciation over time by screening broad based indexes to identify quality companies with high free cash flow yield.
The Pacer Trendpilot Series ETFs are based largely on following the S&P Developed Ex-US Large Cap Local Currency Total Return Index, and adjusting to bonds as necessary. The S&P Developed Ex-US Large Cap Local Currency TR Index is designed to measure the top 85% of float-adjusted market cap in each developed country, excluding the U.S. Pacer’s latest offering is the Pacer Trendpilot International ETF (PTIN).
The Pacer Trendpilot ETF initiates trade changes when certain technical chart events are triggered. When those events occur, stocks are more likely to be deemed a riskier investment, and so the ETF switches to a heavier bond-weighted position to reduce risk, focusing specifically on 3-Month US Treasury bills investments. Once another technical event is triggered, and the market is seen to be less susceptible to risk, the portfolio is once again weighted more heavily with stocks, reverting to following the S&P Developed Ex-US Large Cap Local Currency Total Return Index, and thereby offering investors the opportunity to capitalize on available risk-on investments.
The Cash Cows Index Series ETFs focus on investing in companies that offer significant, available free cash flow. This cash flow analysis is based on a metric the company utilizes to then screen stocks that fit their criteria for inclusion in the ETFs. The fund then periodically re-balances the funds on a set schedule automatically. The newest ETF is the Pacer US Cash Cows Growth ETF (BUL). Current ETFs in the Cash Cow Series also include: GCOW, ICOW, COWZ, and CALF.
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