Sean O’Hara On Pacer’s Strategy Driven ETFs

Sean O’Hara, President, Pacer ETFs Distributors joined Keith Black, Managing Director at RIA Channel to discuss Pacer’s robust lineup of strategy driven ETFs.

Pacer’s Cash Cow ETFsTM (COWZ, CALF, BUL, GCOW, ICOW, ECOW, and HERD) seek to redefine value investing.  Traditionally, value stocks have been defined as companies with a low stock price compared to the company’s book value per share.  However, as companies rely more on intangible assets today compared to hard assets, book value may be becoming less relevant.  By using free cash flow yield relative to the company’s enterprise value, Pacer aims to find value stocks with attractive yield in areas where traditional value metrics might not be investing.

While most of Pacer’s Cash Cow ETFsTM are invested in value stocks, the Pacer Lunt series of Alternator ETFs (ALTL, PAMC, and PALC) invest in a variety of factors, alternating factor exposures based on the risk-adjusted relative strength.  ALTL alternates exposures between low volatility stocks and high beta stocks.  PALC and PAMC rotate across momentum, quality, value, and volatility factors, investing in two of the eight factors each month (such as high quality and low volatility), implemented in large cap and mid cap universes, respectively. 

The Pacer Metaurus US Large Cap Dividend Multiplier 400 ETF (QDPL) seeks to multiply the dividend yield on the S&P 500.  QDPL seeks to pay four times the dividend rate of the S&P 500 index.  The strategy invests approximately 86% in the S&P 500 while 14% of assets is used as collateral to buy dividend futures, which may improve tax efficiency of the dividend yield, while reducing exposure to the equity market. 

The Pacer Pacific Asset Floating Rate High Income ETF (FLRT) seeks to provide a high level of current income by investing primarily in floating-rate loans of non-investment-grade companies,
which can serve as both an income driver and a hedge against rising interest rates.

Other investors may seek to earn income by investing in real estate investment trusts (REITs).  In REITs, however, investors need to be aware of sector exposures.  Some REITs are diversified, while others may focus on a specific property sector, such as office, retail, or multi-family investments.  Given trends during COVID and beyond, returns have been challenging in some sectors, especially office and retail. 

The Pacer Data and Infrastructure Real Estate ETF (SRVR) and the Pacer Industrial Real Estate ETF (INDS) seek to invest in global developed market companies that generate a significant amount of their revenue from specific sector real estate operations.  SRVR invests in real estate that benefits from the growth in the digital economy and AI, including cell phone towers and data centers.  INDS invests in industrial real estate, which includes warehouses and logistics properties that benefit from the growth of the e-commerce supply chain. 

Pacer Swan SOS ETFs implement Structure Outcome Strategies over a one-year period.   This ETF series employs a buffer to mitigate downside risk in the equity market while being subject to a cap on upside returns.  ETFs with flex, conservative, or moderate objectives are available on quarterly cycles of January, April, July, and October and reset annually.  The ETFs can be combined into an actively managed fund of funds (PSFF) that aims to optimize the available SOS ETFs to increase upside capture and improve risk mitigation.


An investment in the Funds is subject to investment risk, including the possible loss of principal. Pacer ETF shares may be bought and sold on an exchange through a brokerage account. Brokerage commissions and ETF expenses will reduce investment returns. There can be no assurance that an active trading market for ETF shares will be developed or maintained. The risks associated with this fund are detailed in the prospectus and could include factors such as alternator strategy risk, asset-backed securities risk, calculation methodology risk, CLO risk, concentration risk, currency exchange rate risk, derivatives risk, dividends risk, equity market risk, ETF risks, floating rate loan risk, foreign securities risk, geographic concentration risk, high portfolio turnover risk, large- and mid-capitalization investing risk, monthly exposure risk, smaller companies risk, limited operating history risk, other investment companies risk, passive investment risk, tracking risk, sector risk, non-diversification risk, style risk, CMBS risk, high yield securities risk, fixed income risk, LIBOR risk, foreign securities risk, market risk, ETF risks, liquidity risk, privately issued securities risk, management risk, and/or special risks of exchange traded funds.

Dividends Risk. There can be no assurance that a dividend-paying company will continue to make regular dividend payments. The ability for a company to pay dividends is dependent on the economic climate and the companies’ current earnings and capital resources. Changes in economic conditions or a company’s earnings or financial resources could cause a company to reduce its dividend payments or suspend the payment of dividends altogether. The possibility that such companies could reduce or eliminate the payment of dividends in the future, especially if the companies are facing an economic downturn, could negatively affect the Fund’s performance.

The risks associated with the Pacer Swan SOS ETFs are detailed in the prospectus and could include factors such as buffered loss risk, cap change risk, capped upside risk, counterparty risk, ETF risks, FLEX options correlation risk, FLEX options liquidity risk, FLEX options valuation risk, investment period risk, large capitalization investing risk, management risk, market risk, non-diversification risk, special tax risk, underlying ETF risk, and/or special risks of exchange traded funds.

The Fund(s) will invest substantially all of its assets in FLexible EXchange® Options (“FLEX Options”) that reference the SPDR® S&P 500® ETF Trust (the “Underlying ETF”). FLEX Options are customizable exchange-traded option contracts guaranteed for settlement by the Options Clearing Corporation. The Fund uses FLEX Options to employ a “structured outcome strategy.” Structured outcome strategies seek to produce pre-determined target investment outcomes based upon the performance of an underlying security or index. The pre-determined structured outcomes sought by the Funds, which include the buffer and cap discussed below, are based upon the performance of the Underlying ETF over a one year period.

Pacer Advisors, Inc. is the fund advisor of the FLRT ETF. Aristotle Pacific Capital serves as investment sub-advisor to the Fund.

Distributor: Pacer Financial, Inc., member FINRA, SIPC, an affiliate of Pacer Advisors, Inc. NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED