Launched on 06/12/2015, the Pacer Trendpilot 100 ETF (PTNQ - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Pacer Etfs. It has amassed assets over $219.04 M, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.65%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.30%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 61.80% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 12.08% of total assets, followed by Amazon Com Inc (AMZN - Free Report) and Microsoft Corp (MSFT - Free Report) .
The top 10 holdings account for about 55.75% of total assets under management.
Performance and Risk
PTNQ seeks to match the performance of the Pacer NASDAQ-100 Trendpilot Index before fees and expenses. The Pacer NASDAQ-100 Trendpilot Index uses an objective, rules-based methodology to implement a systematic trend-following strategy that directs exposure (i) 100% to the NASDAQ-100 Index, (ii) 50% to the NASDAQ-100 & 50% to 3-Month US T-Bills or (iii) 100% to 3-Month US T-Bills, depending on the relative performance of NASDAQ-100 TR Index & its 200-business day historical simple moving average.
The ETF has added roughly 7.41% so far this year and was up about 22.47% in the last one year (as of 05/21/2018). In the past 52-week period, it has traded between $26.47 and $33.73.
The ETF has a beta of 0.89 and standard deviation of 14.53% for the trailing three-year period, making it a medium risk choice in the space. With about 104 holdings, it effectively diversifies company-specific risk.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.