Pacer Launched Seasonal Rotation, U.S. Exporter ETFs

Pacer Funds has expanded on its line of customized, smart beta index-based ETFs with two new options that track U.S exporters and a seasonal rotation strategy.

Pacer recently came out with the Pacer US Export Leaders ETF (NYSEArca: PEXL) and the Pacer CFRA-Stovall Equal Weight Seasonal Rotation ETF (NYSEArca: SZNE), which both have a 0.60% expense ratio.

The Pacer US Export Leaders ETF will try to reflect the performance of the Pacer U.S. Export Leaders Index, which is screens the top 200 companies in the S&P 500 and S&P MidCap 400 with the highest annual foreign sales as a percentage of total sales and narrows the pool down to the 100 companies with the highest change in free cash flow growth over the past five years. The 100 components are then equally weighted.

“These are U.S. companies that are able to expand their reach beyond domestic markets while maintaining substantial free cash flow growth. PEXL offers the opportunity to invest in these high-quality, U.S.-based large-cap and mid-cap companies that have proven themselves to have higher earnings growth and revenue growth than their domestic-only counterparts. Smaller companies that don’t trade around the world have limited growth potential. Bigger firms that have connected with consumers around the world can be a great fit for an investment portfolio,” Sean O’Hara, President of Pacer ETF Distributors, said in a note.

While the markets have been focused on increased trade barriers with escalating trade war rhetoric out of President Donald Trump, O’Hara argued that investors should ignore the short-term noise and focus on long-term results.