ck0001616668-20240430
PROSPECTUS
August 31,
2024
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PTLC
PTMC
PTEU |
Pacer
Trendpilot®
US Large Cap ETF
Pacer
Trendpilot®
US Mid Cap ETF
Pacer
Trendpilot®
European
Index ETF |
COWZ
CALF
GCOW
ICOW |
Pacer
US Cash Cows 100 ETF Pacer US Small Cap Cash Cows 100 ETF Pacer
Global Cash Cows Dividend ETF Pacer Developed Markets International
Cash Cows 100 ETF |
PAEU
PIEL
PWS |
Pacer
Autopilot Hedged European Index ETF Pacer International Export Leaders
ETF Pacer WealthShield ETF |
VIRS |
Pacer
BioThreat Strategy ETF |
each
of the above is listed on Cboe BZX Exchange,
Inc. |
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SZNG
SZNE
ROOM
RXRE
INDS
SRVR
PAD |
Pacer
CFRA-Stovall Global Seasonal Rotation ETF
Pacer
CFRA-Stovall Equal Weight Seasonal Rotation ETF
Pacer
Hotel & Lodging Real Estate ETF
Pacer
Healthcare Real Estate ETF
Pacer
Industrial Real Estate ETF
Pacer
Data & Infrastructure Real Estate ETF
Pacer
Apartments & Residential Real Estate
ETF |
AFTY
PTBD
PTIN
TRND
BUL
ALTL
PAMC |
Pacer
CSOP FTSE China A50 ETF
Pacer
Trendpilot®
US Bond ETF
Pacer
Trendpilot®
International ETF
Pacer
Trendpilot®
Fund of Funds ETF
Pacer
US Cash Cows Growth ETF
Pacer
Lunt Large Cap Alternator ETF
Pacer
Lunt MidCap Multi-Factor Alternator ETF |
PEXL
FLRT
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Pacer
US Export Leaders ETF Pacer Pacific Asset Floating Rate High Income
ETF
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PALC
TRFK
SHPP |
Pacer
Lunt Large Cap Multi-Factor Alternator ETF Pacer Data and Digital
Revolution ETF Pacer Industrials and Logistics ETF |
each
of the above is listed on the NYSE Arca,
Inc. |
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ECOW |
Pacer
Emerging Markets Cash Cows 100 ETF |
HERD |
Pacer
Cash Cows Fund of Funds ETF |
COWG |
Pacer
US Large Cap Cash Cows Growth Leaders ETF |
PTNQ |
Pacer
Trendpilot®
100 ETF |
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CAFG |
Pacer
US Small Cap Cash Cows Growth Leaders ETF |
each
of the above is listed on the Nasdaq Stock Market
LLC |
These
securities have not been approved or disapproved by the Securities and Exchange
Commission (“SEC”) or the Commodity Futures Trading Commission (“CFTC”) nor has
the SEC or the CFTC passed upon the accuracy or adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
The
Funds offered through this Prospectus are not money market funds and do not seek
to maintain a fixed or stable NAV of $1.00 per share.
INVESTMENT
PRODUCTS: ¨
ARE
NOT FDIC INSURED ¨
MAY
LOSE VALUE ¨
ARE
NOT BANK GUARANTEED
Table
of Contents
SUMMARY
SECTION
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Pacer
Trendpilot®
US Large Cap ETF |
Investment
Objective
The
Pacer
Trendpilot US Large Cap ETF (the “Fund”) is an exchange traded
fund (“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer Trendpilot US Large Cap Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
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Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
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Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
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1 Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
51% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
The
Index uses an objective, rules-based methodology to implement a systematic
trend-following strategy that directs exposure (i) 100% to the S&P
500®
Index (the “S&P 500”), (ii) 50% to the S&P 500 and 50% to 3-Month US
Treasury bills, or (iii) 100% to 3-Month US Treasury bills, depending on the
relative performance of the S&P 500 and its 200-business day historical
simple moving average (the “200-day moving average”). The calculation of the
200-day moving average for the S&P 500 is based on the total return
version of the S&P 500 and reflects the reinvestment of dividends paid
by the securities in the S&P 500. The Index is expected to be
predominantly invested in the components of the S&P 500 over most
short- and long-term periods and is only expected to invest in 3-Month US
Treasury bills from time to time in response to adverse market conditions as
defined by the “50/50 Indicator” and “T-Bill Indicator” below. The
S&P 500 consists of approximately 500 leading U.S.-listed companies
representing approximately 80% of the U.S. equity market
capitalization.
The
Index, and consequently the Fund, may stay in any of its three possible
positions for an extended period of time. As described below, the Index will
change its position based on the following indicators, and each change will
become effective at the close of business on the first business day after the
indicator for the change is triggered. The Index will be in a new position
effective on the second business day.
Equity
Indicator.
When the S&P 500 closes above its 200-day moving average for five
consecutive business days (the “Equity Indicator”), the exposure of the Index
will be 100% to the S&P 500, effective at the close of business on the first
business day following the date of the Equity Indicator. The Index will be in a
new position effective on the second business day.
Once
the Equity Indicator has been triggered, the exposure of the Index will next
change to either be 50% to the S&P 500
and
50% to 3-Month US Treasury bills if the 50/50 Indicator (described below) is
triggered or 100% to 3-Month US Treasury bills if both the 50/50 Indicator and
the T-Bill Indicator (described below) are triggered simultaneously, effective
at the close of business on the first business day following the date of the
indicator(s). The Index will be in a new position effective on the second
business day.
50/50
Indicator.
When the S&P 500 closes below its 200-day moving average for five
consecutive business days (the “50/50 Indicator”), the exposure of the Index
will be 50% to the S&P 500
and
50% to 3-Month US Treasury bills, effective at the close of business on the
first business day following the date of the 50/50 Indicator. The Index will be
in a new position effective on the second business day. Following the
effectiveness of the 50/50 Indicator, the exposure of the Index may be greater
than or less than 50% with respect to the S&P 500
and
3-Month US Treasury bills depending on their respective performance until either
the Equity Indicator or T-Bill Indicator (described below) is
triggered.
Once
the 50/50 Indicator has been triggered, the exposure of the Index will next
change to either be 100% to the S&P 500 if the Equity Indicator is triggered
or 100% to 3-Month US Treasury bills if the T-Bill Indicator (described below)
is triggered, effective at the close of business on the first business day
following the date of the indicator. The Index will be in a new position
effective on the second business day.
T-Bill
Indicator.
When the S&P 500’s 200-day moving average closes lower than its value from
five business days earlier (the “T-Bill Indicator”) and the 50/50 Indicator has
been triggered, the exposure of the Index will be 100% to 3-Month US Treasury
bills, effective at the close of business on the first business day following
the date of the T-Bill Indicator. The Index will be in a new position effective
on the second business day.
For
example, if today is Wednesday and the S&P 500’s 200-day moving average
closes lower than it did on the fifth preceding business day (Wednesday of the
preceding week), the T-Bill Indicator is triggered. Unlike the operation of the
Equity Indicator and 50/50 Indicator, the closing values on the days in between
today and the fifth preceding business day do not affect whether the T-Bill
Indicator has been triggered; rather, the T-Bill Indicator simply compares
today’s closing value to the closing value five business days earlier. However,
the Index will not move directly from 100% exposure to the S&P 500 to 100%
exposure to 3-Month US Treasury bills unless the 50/50 Indicator was
simultaneously triggered following the most recent triggering of the Equity
Indicator.
Once
the T-Bill Indicator has been triggered, the exposure of the Index will next
change to be 100% to the S&P 500 if the Equity Indicator is triggered,
effective at the close of business on the first business day following
the date of the indicator. The Index will be in a new position effective on the
second business day. Once the T-Bill Indicator has been triggered, the Index
will not return to its 50/50 position unless the Equity Indicator is first
triggered, followed by the 50/50 Indicator being triggered.
The
Index aims to mitigate, to some extent, the volatility of the S&P 500 by
tracking 3-Month US Treasury bills (instead of the S&P 500) when the S&P
500 is in a negative trend.
Special
Indicator.
In the event the S&P 500 closes 20% above or 20% below its 200-day moving
average, the Index will change exposures effective at the end of the following
business day to be 50% to the S&P 500 and 50% to 3-Month US Treasury bills.
This new exposure will continue until the Equity Indicator, 50/50 Indicator, or
T-Bill Indicator is triggered.
The
Fund’s Investment Strategy
Under normal
circumstances, at least 80% of the Fund’s total assets (exclusive of collateral
held from securities lending) will be invested in the component securities of
the Index. The Adviser expects that, over time, the correlation
between the Fund’s performance and that of the Index, before fees and expenses,
will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the
Index.
Principal Risks of Investing in
the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Equity
Market Risk. The equity securities held in the Fund’s portfolio may experience
sudden, unpredictable drops in value or long periods of decline in value. This
may occur because of factors that affect securities markets generally or factors
affecting specific industries, sectors or companies in which the Fund invests.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value as market confidence in and
perceptions of their issuers change. The Fund’s NAV and market price may
fluctuate significantly in response to these and other factors. As a result, an
investor could lose money over short or long periods of time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as Cboe BZX Exchange, Inc. (the “Exchange”), and may be
traded on U.S. exchanges other than the Exchange, there can be no assurance that
shares of the Fund will trade with any volume, or at all, on any stock exchange.
In stressed market
conditions,
the liquidity of shares of the Fund may begin to mirror the liquidity of the
Fund’s underlying portfolio holdings, which can be significantly less liquid
than shares of the Fund, and this could lead to differences between the market
price of the shares of the Fund and the underlying value of those
shares.
▪Fixed
Income Risk.
Generally, the value of fixed income securities will change inversely with
changes in interest rates. As interest rates rise, the market value of fixed
income securities tends to decrease. Conversely, as interest rates fall, the
market value of fixed income securities tends to increase. This risk will be
greater for long-term securities than for short-term securities. In recent
periods, governmental financial regulators, including the U.S. Federal Reserve,
have taken steps to increase interest rates. Changes in government intervention
may have adverse effects on investments, volatility, and the liquidity of debt
markets.
▪Government
Obligations Risk.
The Fund may invest in securities issued by the U.S. government. There can be no
guarantee that the United States will be able to meet its payment obligations
with respect to such securities. Additionally, market prices and yields of
securities supported by the full faith and credit of the U.S. government may
decline or be negative for short or long periods of
time.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the Index
regardless of their investment merits. Other than in response to one of the
triggers set forth above in accordance with the Index methodology, the Fund does
not take defensive positions under any market conditions, including conditions
that are adverse to the performance of the Fund.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
▪Trend
Lag Risk. At least six consecutive trading days will elapse after the S&P
500 first drops below its historical 200-day simple moving average (or
conversely, first moves above such average) before the Index will switch from
tracking the S&P 500 to 3-Month US Treasury bills (or conversely, from
3-Month US Treasury bills to the S&P 500). As a result, if the S&P 500
is in an overall positive trend, the Index and consequently the Fund may be
adversely affected by a downward trend and/or volatility in the S&P 500 for
up to six consecutive trading days (or conversely, if the S&P 500 is in an
overall negative trend, the Index and consequently the Fund may not benefit from
an upward trend and/or volatility in the S&P 500 for up to six consecutive
trading days). Accordingly, the methodology employed by the Index does not
eliminate exposure to downward trends and/or volatility in the S&P 500 and
does not provide immediate exposure to upward trends and/or volatility in the
S&P 500.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year, and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total Return
as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 14.92%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 11.96% (quarter ended December 31, 2020)
and the Fund’s lowest return for a
calendar quarter was -19.33% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
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Year |
5
Years |
Since
Inception
(6/11/15) |
Pacer
Trendpilot US Large Cap ETF |
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Return Before
Taxes |
16.75% |
9.68% |
7.72% |
Return After
Taxes on Distributions |
16.36% |
9.35% |
7.43% |
Return After
Taxes on Distributions and Sale of Fund
Shares |
10.08% |
7.59% |
6.15% |
Pacer
Trendpilot US Large Cap Index
(reflects no deduction for
fees, expenses, or taxes) |
17.43% |
10.32% |
8.37% |
S&P
500®
Index
(reflects no deduction for
fees, expenses, or taxes) |
26.29% |
15.69% |
12.06% |
S&P
1200 Index
(reflects no deduction for
fees, expenses, or taxes) |
23.38% |
13.07% |
9.38% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. In certain
cases, the figure representing “Return After Taxes on Distributions and Sale of
Fund Shares” may be higher than the other return figures for the same period. A
higher after-tax return results when a capital loss occurs upon redemption and
provides an assumed tax deduction that benefits the investor.
Actual after-tax returns depend on an investor’s tax situation and may differ
from those shown. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
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Pacer
Trendpilot®
US Mid Cap ETF |
Investment
Objective
The
Pacer
Trendpilot US Mid Cap ETF (the “Fund”) is an exchange traded
fund (“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer Trendpilot US Mid Cap Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
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Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
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1 Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
262% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
The
Index uses an objective, rules-based methodology to implement a systematic
trend-following strategy that directs exposure (i) 100% to the S&P MidCap
400®
Index (the “S&P MidCap 400”), (ii) 50% to the S&P MidCap 400 and 50% to
3-Month US Treasury bills, or (iii) 100% to 3-Month US Treasury bills, depending
on the relative performance of the S&P MidCap 400 and its 200-business day
historical simple moving average (the “200-day moving average”). The calculation
of the 200-day moving average for the S&P MidCap 400 is based on the total
return version of the S&P MidCap 400 and reflects the reinvestment of
dividends paid by the securities in the S&P MidCap 400. The Index is
expected to be predominantly invested in the components of the S&P MidCap
400 over most short- and long-term periods and is only expected to invest in
3-Month US Treasury bills from time to time in response to adverse market
conditions as defined by the “50/50 Indicator” and “T-Bill Indicator” below. The
S&P MidCap 400 measures the performance of mid-capitalization stocks in the
United States.
The
Index, and consequently the Fund, may stay in any of its three possible
positions for an extended period of time. As described below, the Index will
change its position based on the following indicators, and each change will
become
effective
at the close of business on the first business day after the indicator for the
change is triggered. The Index will be in a new position effective on the second
business day.
Equity
Indicator.
When the S&P MidCap 400 closes above its 200-day moving average for five
consecutive business days (the “Equity Indicator”), the exposure of the Index
will be 100% to the S&P MidCap 400, effective at the close of business on
the first business day following the date of the Equity Indicator. The Index
will be in a new position effective on the second business day.
Once
the Equity Indicator has been triggered, the exposure of the Index will next
change to either be 50% to the S&P MidCap 400
and
50% to 3-Month US Treasury bills if the 50/50 Indicator (described below) is
triggered or 100% to 3-Month US Treasury bills if both the 50/50 Indicator and
the T-Bill Indicator (described below) are triggered simultaneously, effective
at the close of business on the first business day following the date of the
indicator(s). The Index will be in a new position effective on the second
business day.
50/50
Indicator.
When the S&P MidCap 400 closes below its 200-day moving average for five
consecutive business days (the “50/50 Indicator”), the exposure of the Index
will be 50% to the S&P MidCap 400
and
50% to 3-Month US Treasury bills, effective at the close of business on the
first business day following the date of the 50/50 Indicator. The Index
will be in a new position effective on the second business day. Following the
effectiveness of the 50/50 Indicator, the exposure of the Index may be greater
than or less than 50% with respect to the S&P MidCap 400
and
3-Month US Treasury bills depending on their respective performance until either
the Equity Indicator or T-Bill Indicator (described below) is
triggered.
Once
the 50/50 Indicator has been triggered, the exposure of the Index will next
change to either be 100% to the S&P MidCap 400 if the Equity Indicator is
triggered or 100% to 3-Month US Treasury bills if the T-Bill Indicator
(described below) is triggered, effective at the close of business on the first
business day following the date of the indicator.
T-Bill
Indicator.
When the S&P MidCap 400’s 200-day moving average closes lower than its value
from five business days earlier (the “T-Bill Indicator”) and the 50/50 Indicator
has been triggered, the exposure of the Index will be 100% to 3-Month US
Treasury bills, effective at the close of business on the first business day
following the date of the T-Bill Indicator. The Index will be in a new position
effective on the second business day.
For
example, if today is Wednesday and the S&P MidCap 400’s 200-day moving
average closes lower than it did on the fifth preceding business day (Wednesday
of the preceding week), the T-Bill Indicator is triggered. Unlike the operation
of the Equity Indicator and 50/50 Indicator, the closing values on the days in
between today and the fifth preceding business day do not affect whether the
T-Bill Indicator has been triggered; rather, the T-Bill Indicator simply
compares today’s closing value to the closing value five business days earlier.
However, the Index will not move directly from 100% exposure to the S&P
MidCap 400 to 100% exposure to 3-Month US Treasury bills unless the 50/50
Indicator was first triggered following the most recent triggering of the Equity
Indicator.
Once
the T-Bill Indicator has been triggered, the exposure of the Index will next
change to be 100% to the S&P MidCap 400 if the Equity Indicator is
triggered, effective at the close of business on the first
business day following the date of the indicator. The Index will be in
a new position effective on the second business day. Once the T-Bill Indicator
has been triggered, the Index will not return to its 50/50 position unless the
Equity Indicator is simultaneously triggered, followed by the 50/50 Indicator
being triggered.
The
Index aims to mitigate, to some extent, the volatility of the S&P MidCap 400
by tracking 3-Month US Treasury bills (instead of the S&P MidCap 400) when
the S&P MidCap 400 is in a negative trend.
Special
Indicator.
In the event the S&P MidCap 400 closes 20% above or 20% below its 200-day
moving average, the Index will change exposures effective at the end of the
following business day to be 50% to the S&P MidCap 400 and 50% to 3-Month US
Treasury bills. This new exposure will continue until the Equity Indicator,
50/50 Indicator, or T-Bill Indicator is triggered.
The
Fund’s Investment Strategy
Under normal
circumstances, at least 80% of the Fund’s total assets (exclusive of collateral
held from securities lending) will be invested in the component securities of
the Index. The Adviser expects that, over time, the correlation
between the Fund’s performance and that of the Index, before fees and expenses,
will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the
Index.
Principal Risks of Investing in
the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as Cboe BZX Exchange, Inc. (the “Exchange”), and may be
traded on U.S. exchanges other than the Exchange, there can be no assurance that
shares of the Fund will trade with any volume, or at all, on any stock exchange.
In stressed market conditions, the liquidity of shares of the Fund may begin to
mirror the liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪Fixed
Income Risk.
Generally, the value of fixed income securities will change inversely with
changes in interest rates. As interest rates rise, the market value of fixed
income securities tends to decrease. Conversely, as interest rates fall, the
market value of fixed income securities tends to increase. This risk will be
greater for long-term securities than for short-term securities. In recent
periods, governmental financial regulators, including the U.S. Federal Reserve,
have taken steps to increase interest rates. Changes in government intervention
may have adverse effects on investments, volatility, and the liquidity of debt
markets.
▪Government
Obligations Risk.
The Fund may invest in securities issued by the U.S. government. There can be no
guarantee that the United States will be able to meet its payment obligations
with respect to such securities. Additionally, market prices and yields of
securities supported by the full faith and credit of the U.S. government may
decline or be negative for short or long periods of
time.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the Index
regardless of their investment merits. Other than in response to one of the
triggers set forth above in accordance with the Index methodology, the Fund does
not take defensive positions under any market conditions, including conditions
that are adverse to the performance of the Fund.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
▪Trend
Lag Risk. At
least six consecutive trading days will elapse after the S&P MidCap 400
first drops below its historical 200-day simple moving average (or conversely,
first moves above such average) before the Index will switch from tracking the
S&P MidCap 400 to 3-Month US Treasury bills (or conversely, from 3-Month US
Treasury bills to the S&P MidCap 400). As a result, if the S&P MidCap
400 is in an overall positive trend, the Index and consequently the Fund may be
adversely affected by a downward trend and/or volatility in the S&P MidCap
400 for up to six consecutive trading days (or conversely, if the S&P MidCap
400 is in an overall negative trend, the Index and consequently the Fund may not
benefit from an upward trend and/or volatility in the S&P MidCap 400 for up
to six consecutive trading days). Accordingly, the methodology employed by the
Index does not eliminate exposure to downward trends and/or volatility in the
S&P MidCap 400 and does not provide immediate exposure to upward trends
and/or volatility in the S&P MidCap 400.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year, and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total Return
as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 6.00%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 20.16% (quarter ended December 31, 2020)
and the Fund’s lowest return for a
calendar quarter was -7.67% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
5
Years |
Since
Inception
(6/11/15) |
Pacer
Trendpilot US Mid Cap ETF |
|
| |
Return Before
Taxes |
7.27% |
2.24% |
4.09% |
Return After
Taxes on Distributions |
6.60% |
1.94% |
3.85% |
Return After
Taxes on Distributions and Sale of Fund
Shares |
4.46% |
1.64% |
3.17% |
Pacer
Trendpilot US Mid Cap Index
(reflects no deduction for
fees, expenses, or taxes) |
7.86% |
2.87% |
4.73% |
S&P
MidCap 400 Index
(reflects no deduction for
fees, expenses, or taxes) |
16.44% |
12.62% |
8.91% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Trendpilot®
100 ETF |
Investment
Objective
The
Pacer
Trendpilot 100 ETF (the “Fund”) is an exchange traded fund
(“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer NASDAQ-100 Trendpilot Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.65% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.65% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$66 |
$208 |
$362 |
$810 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
20% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
The
Index uses an objective, rules-based methodology to implement a systematic
trend-following strategy that directs exposure (i) 100% to the
NASDAQ-100®
Index (the “NASDAQ-100”), (ii) 50% to the NASDAQ-100 and 50% to 3-Month US
Treasury bills, or (iii) 100% to 3-Month US Treasury bills, depending on the
relative performance of the NASDAQ-100 and its 200-business day historical
simple moving average (the “200-day moving average”). The calculation of the
200-day moving average for the NASDAQ-100 is based on the total return version
of the NASDAQ-100 and reflects the reinvestment of dividends paid by the
securities in the NASDAQ-100. The Index is expected to be predominantly invested
in the components of the NASDAQ-100 over most short- and long-term periods and
is only expected to invest in 3-Month US Treasury bills from time to time in
response to adverse market conditions as defined by the “50/50 Indicator” and
“T-Bill Indicator” below.
The
NASDAQ-100 Index includes approximately 100 of the largest non-financial
securities listed on The NASDAQ Stock Market based on market capitalization. The
NASDAQ-100 Index comprises securities of companies across major industry groups,
including computer, biotechnology, healthcare, telecommunications and
transportation. However, it does not contain securities of financial companies,
including investment companies. The NASDAQ-100 Index was developed
by
NASDAQ OMX. There is no minimum market capitalization requirement for inclusion
in the NASDAQ-100 Index. Inclusion is determined based on the top 100 largest
issuers based on market capitalization meeting all other eligibility
requirements. As of June 30, 2024, the range of market capitalizations of
companies in the NASDAQ-100 Index was approximately $10.4 billion to $3.3
trillion.
The
Index, and consequently the Fund, may stay in any of its three possible
positions for an extended period of time. As described below, the Index will
change its position based on the following indicators, and each change will
become effective on the second business day after the indicator for the change
is triggered. The Index will be in a new position effective at the close of
business on the first business day.
Equity
Indicator.
When the NASDAQ-100 closes above its 200-day moving average for five consecutive
business days (the “Equity Indicator”), the exposure of the Index will be 100%
to the NASDAQ-100, effective at the close of business on the first business day
following the date of the Equity Indicator. The Index will be in a new position
effective on the second business day.
Once
the Equity Indicator has been triggered, the exposure of the Index will next
change to either be 50% to the NASDAQ-100 and 50% to 3-Month US Treasury bills
if the 50/50 Indicator (described below) is triggered or 100% to 3-Month US
Treasury bills if both the 50/50 Indicator and the T-Bill Indicator (described
below) are triggered simultaneously, effective on the second business day
following the date of the indicator(s). The Index will be in a new position
effective at the close of business on the first business day.
50/50
Indicator.
When the NASDAQ-100 closes below its 200-day moving average for five consecutive
business days (the “50/50 Indicator”) and the 50/50 Indicator has been
triggered, the exposure of the Index will be 50% to the NASDAQ-100
and
50% to 3-Month US Treasury bills, effective at the close of business on the
first business day following the date of the 50/50 Indicator. The Index
will be in a new position effective on the second business day. Following the
effectiveness of the 50/50 Indicator, the exposure of the Index may be greater
than or less than 50% with respect to the NASDAQ-100
and
3-Month US Treasury bills depending on their respective performance until either
the Equity Indicator or T-Bill Indicator (described below) is
triggered.
Once
the 50/50 Indicator has been triggered, the exposure of the Index will next
change to either be 100% to the NASDAQ-100 if the Equity Indicator is triggered
or 100% to 3-Month US Treasury bills if the T-Bill Indicator (described below)
is triggered, effective at the close of business on the first business day
following the date of the indicator(s). The Index will be in a new position
effective on the second business day.
T-Bill
Indicator. When
the NASDAQ-100’s 200-day moving average closes lower than its value from five
business days earlier (the “T-Bill Indicator”), the exposure of the Index will
be 100% to 3-Month US Treasury bills, effective at the close of business on the
first business day following the date of the T-Bill Indicator. The Index will be
in a new position effective on the second business day.
For
example, if today is Wednesday and the NASDAQ-100’s 200-day moving average
closes lower than it did on the fifth preceding business day (Wednesday of the
preceding week), the T-Bill Indicator is triggered. Unlike the operation of the
Equity Indicator and 50/50 Indicator, the closing values on the days in between
today and the fifth preceding business day do not affect whether the T-Bill
Indicator has been triggered; rather, the T-Bill Indicator simply compares
today’s closing value to the closing value five business days earlier. However,
the Index will not move directly from 100% exposure to the NASDAQ-100 to 100%
exposure to 3-Month US Treasury bills unless the 50/50 Indicator was first
triggered following the most recent triggering of the Equity
Indicator.
Once
the T-Bill Indicator has been triggered, the exposure of the Index will next
change to be 100% to the NASDAQ-100 if the Equity Indicator is triggered,
effective at the close of business on the first business day following the
date of the indicator. The Index will be in a new position effective on the
second business day. Once the T-Bill Indicator has been triggered, the Index
will not return to its 50/50 position unless the Equity Indicator is
simultaneously triggered, followed by the 50/50 Indicator being
triggered.
The
Index aims to mitigate, to some extent, the volatility of the NASDAQ-100 by
tracking 3-Month US Treasury bills (instead of the NASDAQ-100) when the
NASDAQ-100 is in a negative trend.
Special
Indicator.
In the event the NASDAQ-100 closes 20% above or 20% below its 200-day moving
average, the Index will change exposures effective at the end of the following
business day to be 50% to the NASDAQ-100 and 50% to 3-Month US Treasury bills.
This new exposure will continue until the Equity Indicator, 50/50 Indicator, or
T-Bill Indicator is triggered.
The
Fund’s Investment Strategy
The Fund
attempts to invest all, or substantially all, of its assets in the component
securities that make up the Index. The Adviser expects that, over time, the
correlation between the Fund’s performance and that of the Index, before fees
and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the Index.
The
Fund is considered to be non-diversified, which means that it may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund.
Principal Risks of Investing in
the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
Risk.
If the Index concentrates in an industry or group of industries, the Fund’s
investments may be concentrated accordingly. In such event, the value of the
Fund’s shares may rise and fall more than the value of shares of a fund that
invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading. Although shares of the Fund are listed
for trading on a national securities exchange, such as The Nasdaq Stock Market
LLC (the “Exchange”), and may be traded on U.S. exchanges other than the
Exchange, there can be no assurance that shares of the Fund will trade with any
volume, or at all, on any stock exchange. In stressed market conditions, the
liquidity of shares of the Fund may begin to mirror the liquidity of the Fund’s
underlying portfolio holdings, which can be significantly less liquid than
shares of the Fund, and this could lead to differences between the market price
of the shares of the Fund and the underlying value of those
shares.
▪Fixed
Income Risk.
Generally, the value of fixed income securities will change inversely with
changes in interest rates. As interest rates rise, the market value of fixed
income securities tends to decrease. Conversely, as interest rates fall, the
market value of fixed income securities tends to increase. This risk will be
greater for long-term securities than for short-term securities. In recent
periods, governmental financial regulators, including the U.S. Federal Reserve,
have taken steps to increase interest rates. Changes in government intervention
may have adverse effects on investments, volatility, and the liquidity of debt
markets.
▪Government
Obligations Risk.
The Fund may invest in securities issued by the U.S. government. There can be no
guarantee that the United States will be able to meet its payment obligations
with respect to such securities. Additionally, market prices and yields of
securities supported by the full faith and credit of the U.S. government may
decline or be negative for short or long periods of
time.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Non-Diversification
Risk. Although
the Fund intends to invest in a variety of securities and instruments, the Fund
is considered to be non-diversified, which means that it may invest more of its
assets in the securities of a single issuer or a smaller number of issuers than
if it were a diversified fund. As a result, the Fund may be more exposed to the
risks associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may
increase the Fund’s volatility and cause the performance of a relatively smaller
number of issuers to have a greater impact on the Fund’s
performance.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the Index
regardless of their investment merits. Other than in response to one of the
triggers set forth above in accordance with the Index methodology, the Fund does
not take defensive positions under any market conditions, including conditions
that are adverse to the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Communications
Services Sector Risk. The
Fund is generally expected to invest significantly in companies in the
communications services sector, and therefore the performance of the Fund could
be negatively impacted by events affecting this sector. Communications services
companies are subject to extensive government regulation. The costs of complying
with governmental regulations, delays or failure to receive required regulatory
approvals, or the enactment of new adverse regulatory requirements may adversely
affect the business of the such
companies.
Companies in the communications services sector can also be significantly
affected by intense competition, including competition with alternative
technologies such as wireless communications (including with 5G and other
technologies), product compatibility, consumer preferences, rapid product
obsolescence, and research and development of new products. Technological
innovations may make the products and services of such companies
obsolete.
◦Consumer
Discretionary Sector Risk.
The
Fund may invest in companies in the consumer discretionary sector, and therefore
the performance of the Fund could be negatively impacted by events affecting
this sector.
The
success of consumer product manufacturers and retailers is tied closely to the
performance of domestic and international economies, interest rates, exchange
rates, competition, consumer confidence, changes in demographics and consumer
preferences. Companies in the consumer discretionary sector depend heavily on
disposable household income and consumer spending, and may be strongly affected
by social trends and marketing campaigns. These companies may be subject to
severe competition, which may have an adverse impact on their
profitability.
◦Information
Technology Sector Risk. Market
or economic factors impacting information technology companies and companies
that rely heavily on technological advances could have a significant effect on
the value of the Fund’s investments. The value of stocks of information
technology companies and companies that rely heavily on technology is
particularly vulnerable to rapid changes in technology product cycles, rapid
product obsolescence, government regulation and competition, both domestically
and internationally, including competition from foreign competitors with lower
production costs. Stocks of information technology companies and companies that
rely heavily on technology, especially those of smaller, less-seasoned
companies, tend to be more volatile than the overall market. Information
technology companies are heavily dependent on patent and intellectual property
rights, the loss or impairment of which may adversely affect
profitability.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In addition, when the Fund uses a representative sampling approach,
the Fund may not be as well correlated with the return of the Index as when the
Fund purchases all of the securities in the Index in the proportions in which
they are represented in the Index.
▪Trend
Lag Risk. At
least six consecutive trading days will elapse after the NASDAQ-100 first drops
below its historical 200-day simple moving average (or conversely, first moves
above such average) before the Index will switch from tracking the
NASDAQ-100
to
3-Month US Treasury bills (or conversely, from 3-Month US Treasury bills to the
NASDAQ-100). As a result, if the NASDAQ-100 is in an overall positive trend, the
Index and consequently the Fund may be adversely affected by a downward trend
and/or volatility in the NASDAQ-100 for up to six consecutive trading days (or
conversely, if the NASDAQ-100 is in an overall negative trend, the Index and
consequently the Fund may not benefit from an upward trend and/or volatility in
the NASDAQ-100 for up to six consecutive trading days). Accordingly, the
methodology employed by the Index does not eliminate exposure to downward trends
and/or volatility in the NASDAQ-100 and does not provide immediate exposure to
upward trends and/or volatility in the NASDAQ-100.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year, and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total Return
as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 10.17%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 23.12% (quarter ended June 30, 2020) and
the Fund’s lowest return for a
calendar quarter was -14.07% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
5
Years |
Since
Inception
(6/11/15) |
Pacer
Trendpilot 100 ETF |
|
| |
Return
Before Taxes |
34.85% |
15.50% |
12.41% |
Return
After Taxes on Distributions |
34.16% |
15.30% |
12.25% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
20.73% |
12.45% |
10.22% |
Pacer
NASDAQ-100 Trendpilot Index
(reflects no deduction for
fees, expenses, or taxes) |
35.90% |
16.13% |
13.08% |
NASDAQ-100
Index
(reflects no deduction for
fees, expenses, or taxes) |
55.13% |
22.66% |
17.87% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Trendpilot®
European Index ETF |
Investment
Objective
The
Pacer
Trendpilot European Index ETF (the “Fund”) is an exchange traded
fund (“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer Trendpilot European Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.65% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.65% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$66 |
$208 |
$362 |
$810 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
111% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
The
Index uses an objective, rules-based methodology to implement a systematic
trend-following strategy that directs exposure (i) 100% to the FTSE Eurozone
Index, (ii) 50% to the FTSE Eurozone Index and 50% to 3-Month US Treasury bills,
or (iii) 100% to 3-Month US Treasury bills, depending on the relative
performance of the FTSE Eurozone Index and its 200-business day historical
simple moving average (the “200-day moving average”). The calculation of the
200-day moving average for the FTSE Eurozone Index is based on the total return
version of the FTSE Eurozone Index and reflects the reinvestment of dividends
paid by the securities in the FTSE Eurozone Index. The Index is expected to be
predominantly invested in the components of the FTSE Eurozone Index over most
short- and long-term periods and is only expected to invest in 3-Month US
Treasury bills from time to time in response to adverse market conditions as
defined by the “50/50 Indicator” and “T-Bill Indicator” below.
The
FTSE Eurozone Index is a rules-based, float-adjusted, market
capitalization-weighted index comprised of large- and mid-capitalization stocks
providing coverage of the developed markets in the euro zone, including
primarily France, Germany, Spain, the Netherlands, and Italy. The FTSE Eurozone
Index is a subset of the FTSE Global Equity Index Series, which targets coverage
of over 99% of investable market capitalization globally.
The
Index, and consequently the Fund, may stay in any of its three possible
positions for an extended period of time. As described below, the Index will
change its position based on the following indicators, and each change will
become effective at the close of business on the first business day after the
indicator for the change is triggered. The Index will be in a new position
effective on the second business day.
Equity
Indicator.
When the FTSE Eurozone Index closes above its 200-day moving average for five
consecutive business days (the “Equity Indicator”), the exposure of the Index
will be 100% to the FTSE Eurozone Index, effective at the close of business on
the first business day following the date of the Equity Indicator. The Index
will be in a new position effective on the second business day.
Once
the Equity Indicator has been triggered, the exposure of the Index will next
change to either be 50% to the FTSE Eurozone Index and 50% to 3-Month US
Treasury bills if the 50/50 Indicator (described below) is triggered or 100% to
3-Month US Treasury bills if both the 50/50 Indicator and the T-Bill Indicator
(described below) are triggered simultaneously, effective at the close of
business on the first business day following the date of the indicator(s). The
Index will be in a new position effective on the second business
day.
50/50
Indicator.
When the FTSE Eurozone Index closes below its 200-day moving average for five
consecutive business days (the “50/50 Indicator”), the exposure of the Index
will be 50% to the FTSE Eurozone Index and 50% to 3-Month US Treasury bills,
effective at the close of business on the first business following the date of
the 50/50 Indicator. The Index will be in a new position effective on the second
business day. Following the effectiveness of the 50/50 Indicator, the exposure
of the Index may be greater than or less than 50% with respect to the FTSE
Eurozone Index and 3-Month US Treasury bills depending on their respective
performance until either the Equity Indicator or T-Bill Indicator (described
below) is triggered.
Once
the 50/50 Indicator has been triggered, the exposure of the Index will next
change to either be 100% to the FTSE Eurozone Index if the Equity Indicator is
triggered or 100% to 3-Month US Treasury bills if the T-Bill Indicator
(described below) is triggered, effective at the close of business on the first
business following the date of the indicator. The Index will be in a new
position effective on the second business day.
T-Bill
Indicator.
When the FTSE Eurozone Index’s 200-day moving average closes lower than its
value from five business days earlier (the “T-Bill Indicator”) and the 50/50
Indicator has been triggered, the exposure of the Index will be 100% to 3-Month
US Treasury bills, effective at the close of business on the first business day
following the date of the T-Bill Indicator. The Index will be in a new position
effective on the second business day.
For
example, if today is Wednesday and the FTSE Eurozone Index’s 200-day moving
average closes lower than it did on the fifth preceding business day (Wednesday
of the preceding week), the T-Bill Indicator is triggered. Unlike the operation
of the Equity Indicator and 50/50 Indicator, the closing values on the days in
between today and the fifth preceding business day do not affect whether the
T-Bill Indicator has been triggered; rather, the T-Bill Indicator simply
compares today’s closing value to the closing value five business days earlier.
However, the Index will not move directly from 100% exposure to the FTSE
Eurozone Index to 100% exposure to 3-Month US Treasury bills unless the 50/50
Indicator was simultaneously triggered following the most recent triggering of
the Equity Indicator.
Once
the T-Bill Indicator has been triggered, the exposure of the Index will next
change to be 100% to the FTSE Eurozone Index if the Equity Indicator is
triggered, effective at the close of business on the first
business following the date of the indicator. Once the T-Bill Indicator has
been triggered, the Index will not return to its 50/50 position unless the
Equity Indicator is first triggered, followed by the 50/50 Indicator being
triggered. The Index will be in a new position effective on the second business
day.
The
Index aims to mitigate, to some extent, the volatility of the FTSE Eurozone
Index by tracking 3-Month US Treasury bills (instead of the FTSE Eurozone Index)
when the FTSE Eurozone Index is in a negative trend.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index and investments that have economic characteristics that
are substantially identical to the economic characteristics of such component
securities (e.g., depositary receipts). The Adviser expects that,
over time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the
Index.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Currency
Exchange Rate Risk. The
Fund’s assets may include investments denominated in non-U.S. currencies, such
as the euro, or in securities or other assets that provide exposure to such
currencies. Changes in currency exchange rates and the relative value of
non-U.S. currencies will affect the value of the Fund’s investment and the value
of your Fund shares. Currency exchange rates can be very volatile and can change
quickly and unpredictably. As a result, the value of an investment in the Fund
may change quickly and without warning and you may lose
money.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Because
securities held by the Fund trade on foreign exchanges that are closed when the
Fund’s primary listing exchange is open, the Fund is likely to experience
premiums and discounts greater than those of domestic
ETFs.
◦Trading. Although shares of the Fund are listed
for trading on a national securities exchange, such as Cboe BZX Exchange,
Inc. (the “Exchange”), and may be traded on U.S. exchanges other than the
Exchange, there can be no assurance that shares of the Fund will trade with any
volume, or at all, on any stock exchange. In stressed market conditions, the
liquidity of shares of the Fund may begin to mirror the liquidity of the Fund’s
underlying portfolio holdings, which can be significantly less liquid than
shares of the Fund, and this could lead to differences between the market price
of the shares of the Fund and the underlying value of those
shares.
▪European
Investment Risk.
The Fund is more exposed to the economic and political risks of Europe and of
the European countries in which it invests than funds whose investments are more
geographically diversified. Adverse economic and political events in Europe may
cause the Fund’s investments to decline in value. The economies and markets of
European countries are often closely connected and interdependent, and events in
one country in Europe can have an adverse impact on other European countries.
The Fund makes investments in securities of issuers that are domiciled in, or
have significant operations in, member countries of the European Union (the
“EU”) that are subject to economic and monetary controls that can adversely
affect the Fund’s investments. The European financial markets have experienced
volatility and adverse trends in recent years and these events have adversely
affected the exchange rate of the euro and may continue to significantly affect
other European countries. Decreasing imports or exports, changes in governmental
or EU regulations on trade, changes in the exchange rate of the euro, the
default or threat of default by an EU member country on its sovereign debt,
and/or an economic recession in an EU member country may have a significant
adverse effect on the economies of EU member countries and their trading
partners, including some or all of the European countries in which the Fund
invests.
The
risks of investing in the United Kingdom (UK) have been heightened as a result
of Brexit, the formal steps taken by the United Kingdom to exit the EU, which
has resulted in increased volatility and triggered political, economic, and
legal uncertainty. Although the UK has formally left the EU, uncertainty remains
as to the long-term consequences of Brexit and issuers in the UK may experience
lower growth as a result.
▪Fixed
Income Risk.
Generally, the value of fixed income securities will change inversely with
changes in interest rates. As interest rates rise, the market value of fixed
income securities tends to decrease. Conversely, as interest rates fall, the
market value of fixed income securities tends to increase. This risk will be
greater for long-term securities than for short-term securities. In recent
periods, governmental financial regulators, including the U.S. Federal Reserve,
have taken steps to increase interest rates. Changes in government intervention
may have adverse effects on investments, volatility, and the liquidity of debt
markets.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪Geographic
Concentration Risk. To
the extent the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or region. The Index’s,
and therefore the Fund’s, heavy equity exposure to two countries (France and
Germany) subjects the Fund to a higher degree of country risk than that of more
geographically diversified international funds.
▪Government
Obligations Risk.
The Fund may invest in securities issued by the U.S. government. There can be no
guarantee that the United States will be able to meet its payment obligations
with respect to such securities. Additionally, market prices and yields of
securities supported by the full faith and credit of the U.S. government may
decline or be negative for short or long periods of
time.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the Index
regardless of their investment merits. Other than in response to one of the
triggers set forth above in accordance with the Index methodology, the Fund does
not take defensive positions under any market conditions, including conditions
that are adverse to the performance of the Fund.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Index is based on securities’ closing
prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected.
▪Trend
Lag Risk. At
least six consecutive trading days will elapse after the FTSE Eurozone Index
first drops below its historical 200-day simple moving average (or conversely,
first moves above such average) before the Index will switch from tracking the
FTSE Eurozone Index to 3-Month US Treasury bills (or conversely, from 3-Month US
Treasury bills to the FTSE Eurozone Index). As a result, if the FTSE Eurozone
Index is in an overall positive trend, the Index and consequently the Fund may
be adversely affected by a downward trend and/or volatility in the FTSE Eurozone
Index for up to six consecutive trading days (or conversely, if the FTSE
Eurozone Index is in an overall negative trend, the Index and consequently the
Fund may not benefit from an upward trend and/or volatility in the FTSE Eurozone
Index for up to six consecutive trading days). Accordingly, the methodology
employed by the Index does not eliminate exposure to downward trends and/or
volatility in the FTSE Eurozone Index or provide immediate exposure to upward
trends and/or volatility in the FTSE Eurozone
Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year, and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total Return
as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 4.68%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 13.13% (quarter ended March 31, 2023) and
the Fund’s lowest return for a
calendar quarter was -13.49% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
5
Years |
Since
Inception
(12/14/15) |
Pacer
Trendpilot European Index ETF |
|
| |
Return Before
Taxes |
12.09% |
1.54% |
1.29% |
Return
After Taxes on Distributions |
11.72% |
1.34% |
1.15% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
8.00% |
1.39% |
1.17% |
Pacer
Trendpilot European Index
(reflects no deduction for
fees, expenses, or taxes) |
13.92% |
2.94% |
2.68% |
FTSE
Eurozone Index
(reflects no deduction for
fees, expenses, or taxes) |
24.00% |
9.58% |
7.59% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Trendpilot®
International ETF |
Investment
Objective
The
Pacer
Trendpilot International ETF (the “Fund”) is an exchange traded
fund (“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer Trendpilot International Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses (expenses
that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.65% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Acquired
Fund Fees and Expenses1 |
0.03% |
Total
Annual Fund Operating Expenses |
0.68% |
1
Acquired Fund Fees
and Expenses (“AFFE”) are the indirect costs of investing in other investment
companies. Total Annual Fund Operating Expenses do not correlate to the expense
ratios in the Fund’s Financial Highlights because the Financial Highlights
include only the direct operating expenses incurred by the Fund and exclude
AFFE.
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$69 |
$218 |
$379 |
$847 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
58% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group, an affiliate of Pacer Advisors, Inc., the Fund’s investment
adviser (the “Adviser”).
The
Index
The
Index uses an objective, rules-based methodology to implement a systematic
trend-following strategy that directs exposure (i) 100% to the S&P Developed
Ex-U.S. LargeCap Index, (ii) 50% to the S&P Developed Ex-U.S. LargeCap Index
and 50% to 3-Month US Treasury bills, or (iii) 100% to 3-Month US Treasury
bills, depending on the relative performance of the S&P Developed Ex-U.S.
LargeCap Index and its 200-business day historical simple moving average (the
“200-day moving average”). The calculation of the 200-day moving average for the
S&P Developed Ex-U.S. LargeCap Index is based on the total return version of
the S&P Developed Ex-U.S. LargeCap Local Currency Index and reflects the
reinvestment of dividends paid by the securities in the S&P Developed
Ex-U.S. LargeCap Index. The Index is expected to be predominantly invested in
the components of the S&P Developed Ex-U.S. LargeCap Index over most short-
and long-term periods and is only expected to invest in 3-Month US Treasury
bills from time to time in response to adverse market conditions as defined by
the “50/50 Indicator” and “T-Bill Indicator” below.
The
S&P Developed Ex-U.S. LargeCap Index is a rules-based, float-adjusted,
market capitalization-weighted index comprised of large-capitalization stocks
providing coverage of the developed markets excluding the United States. The
S&P Developed Ex-U.S. LargeCap Index is a subset of the S&P Global BMI,
a comprehensive, rules-based index measuring global stock market performance.
The
Index, and consequently the Fund, may stay in any of its three possible
positions for an extended period of time. As described below, the Index will
change its position based on the following indicators, and each change will
become effective on the second business day after the indicator for the change
is triggered.
As
of June 30, 2024, the Index was entirely invested in the S&P Developed
Ex-U.S. LargeCap Index constituents.
Equity
Indicator.
When the S&P Developed Ex-U.S. LargeCap Index closes above its 200-day
moving average for five consecutive business days (the “Equity Indicator”), the
exposure of the Index will be 100% to the S&P Developed Ex-U.S. LargeCap
Index, effective on the second business day following the date of the Equity
Indicator.
Once
the Equity Indicator has been triggered, the exposure of the Index will next
change to either be 50% to the S&P Developed Ex-U.S. LargeCap Index and 50%
to 3-Month US Treasury bills if the 50/50 Indicator (described below) is
triggered or 100% to 3-Month US Treasury bills if both the 50/50 Indicator and
the T-Bill Indicator (described below) are triggered simultaneously, effective
on the second business day following the date of the indicator(s).
50/50
Indicator.
When the S&P Developed Ex-U.S. LargeCap Index closes below its 200-day
moving average for five consecutive business days (the “50/50 Indicator”), the
exposure of the Index will be 50% to the S&P Developed Ex-U.S. LargeCap
Index and 50% to 3-Month US Treasury bills, effective on the second business day
following the date of the 50/50 Indicator. Following the effectiveness of the
50/50 Indicator, the exposure of the Index may be greater than or less than 50%
with respect to the S&P Developed Ex-U.S. LargeCap Index and 3-Month US
Treasury bills depending on their respective performance until either the Equity
Indicator or T-Bill Indicator (described below) is triggered.
Once
the 50/50 Indicator has been triggered, the exposure of the Index will next
change to either be 100% to the S&P Developed Ex-U.S. LargeCap Index if the
Equity Indicator is triggered or 100% to 3-Month US Treasury bills if the T-Bill
Indicator (described below) is triggered, effective on the second business day
following the date of the indicator.
T-Bill
Indicator.
When
the S&P Developed Ex-U.S. LargeCap Index’s 200-day moving average closes
lower than its value from five business days earlier (the “T-Bill Indicator”),
the exposure of the Index will be 100% to 3-Month US Treasury bills, effective
on the second business day following the date of the T-Bill
Indicator.
For
example, if today is Wednesday and the S&P Developed Ex-U.S. LargeCap
Index’s 200-day moving average closes lower than it did on the fifth preceding
business day (Wednesday of the preceding week), the T-Bill Indicator is
triggered. Unlike the operation of the Equity Indicator and 50/50 Indicator, the
closing values on the days in between today and the fifth preceding business day
do not affect whether the T-Bill Indicator has been triggered; rather, the
T-Bill Indicator simply compares today’s closing value to the closing value five
business days earlier. However, the Index will not move directly from 100%
exposure to the S&P Developed Ex-U.S. LargeCap Index to 100% exposure to
3-Month US Treasury bills unless the 50/50 Indicator was simultaneously
triggered following the most recent triggering of the Equity
Indicator.
Once
the T-Bill Indicator has been triggered, the exposure of the Index will next
change to be 100% to the S&P Developed Ex-U.S. LargeCap Index if the Equity
Indicator is triggered, effective on the second business day following
the date of the indicator. Once the T-Bill Indicator has been triggered, the
Index will not return to its 50/50 position unless the Equity Indicator is first
triggered, followed by the 50/50 Indicator being triggered.
The
Index aims to mitigate, to some extent, the volatility of the S&P Developed
Ex-U.S. LargeCap Index by tracking 3-Month US Treasury bills (instead of the
S&P Developed Ex-U.S. LargeCap Index) when the S&P Developed Ex-U.S.
LargeCap Index is in a negative trend.
Special
Indicator. In
the event the S&P Developed Ex-U.S. LargeCap Index closes 20% above or 20%
below its 200-day moving average, the Index will change exposures effective at
the end of the following business day to be 50% to the S&P Developed Ex-U.S.
LargeCap Index and 50% to 3-Month US Treasury bills. This new exposure will
continue until the Equity Indicator, 50/50 Indicator, or T-Bill Indicator is
triggered.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index and investments that have economic characteristics that
are substantially identical to the economic characteristics of such component
securities (e.g., depositary receipts). The Adviser expects that,
over time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better. The Fund’s assets may include
investments denominated in non-U.S. currencies.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the
Index.
At times, the Fund may have a portfolio turnover rate substantially
greater than 100%.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Currency
Exchange Rate Risk. The
Fund’s assets may include investments denominated in non-U.S. currencies, such
as the euro, or in securities or other assets that provide exposure to such
currencies. Changes in currency exchange rates and the relative value of
non-U.S. currencies will affect the value of the Fund’s investment and the value
of your Fund shares. Currency exchange rates can be very volatile and can change
quickly and unpredictably. As a result, the value of an investment in the Fund
may change quickly and without warning and you may lose
money.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund. Due to the costs of buying or selling shares of the Fund, including
brokerage commissions imposed by brokers and bid/ask spreads, frequent trading
of shares of the Fund may significantly reduce investment results and an
investment in shares of the Fund may not be advisable for investors who
anticipate regularly making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium)
or
less than the NAV intra-day (discount). This risk is heightened in times of
market volatility, periods of steep market declines, and periods when there is
limited trading activity for shares in the secondary market, in which case such
premiums or discounts may be significant. Because securities held by the Fund
trade on foreign exchanges that are closed when the Fund’s primary listing
exchange is open, the Fund is likely to experience premiums and discounts
greater than those of domestic ETFs.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as NYSE Arca, Inc. (the “Exchange”), and may be traded on U.S.
exchanges other than the Exchange, there can be no assurance that shares of the
Fund will trade with any volume, or at all, on any stock exchange. In stressed
market conditions, the liquidity of shares of the Fund may begin to mirror the
liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪Fixed
Income Risk.
Generally, the value of fixed income securities will change inversely with
changes in interest rates. As interest rates rise, the market value of fixed
income securities tends to decrease. Conversely, as interest rates fall, the
market value of fixed income securities tends to increase. This risk will be
greater for long-term securities than for short-term securities. In recent
periods, governmental financial regulators, including the U.S. Federal Reserve,
have taken steps to increase interest rates. Changes in government intervention
may have adverse effects on investments, volatility, and the liquidity of debt
markets.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪Geographic
Concentration Risk. To
the extent the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or region.
◦Risks
Related to Investing in Japan. The Japanese economy may be subject to considerable degrees of
economic, political and social instability, which could have a negative impact
on Japanese securities. Japan’s economic growth rate has remained relatively low
for an extended period of time and it may remain low in the future. In addition,
Japan is subject to the risk of natural disasters, such as earthquakes,
volcanoes, typhoons and tsunamis. Additionally, decreasing U.S. imports, new
trade regulations, changes in the U.S. dollar exchange rates, a recession in the
United States or continued increases in foreclosure rates may have an adverse
impact on the economy of Japan. Japan also has few natural resources, and any
fluctuation or shortage in the commodity markets could have a negative impact on
Japanese securities.
◦Risks
Related to Investing in Western Europe. Most
developed countries in Western Europe are members of the European Union (“EU”),
and many are also members of the European Monetary Union (EMU), which requires
compliance with restrictions on inflation rates, deficits, and debt levels.
Unemployment in certain European nations is historically high and several
countries face significant debt problems. These conditions can significantly
affect every country in Europe. The euro is the official currency of the EU.
Funds that invest in Europe may have significant exposure to the euro and events
affecting the euro. Recent market events affecting several of the EU member
countries have adversely affected the sovereign debt issued by those countries,
and ultimately may lead to a decline in the value of the euro. A significant
decline in the value of the euro may produce unpredictable effects on trade and
commerce generally and could lead to increased volatility in financial markets
worldwide.
The
UK’s departure from the EU (referred to as “Brexit”) continues to cause
significant uncertainty and may adversely impact the financial results and
operations of various European companies and economies. The effects of Brexit
will largely depend on any agreements the UK makes to retain access to EU
markets. Brexit may result in legal and tax uncertainty and divergent national
laws and regulations as the UK determines which EU laws to replace or replicate.
The UK may be less stable than it has been in recent years and investments in
the UK may be more volatile. Additionally, Brexit could lead to global economic
uncertainty and result in significant volatility in
the global stock markets and currency
exchange rate fluctuations. Any of these effects of Brexit, and other
consequences that are difficult to predict at this time, could adversely affect
the value of the Fund’s investments..
▪Government
Obligations Risk.
The Fund may invest in securities issued by the U.S. government. There can be no
guarantee that the United States will be able to meet its payment obligations
with respect to such securities. Additionally, market prices and yields of
securities supported by the full faith and credit of the U.S. government may
decline or be negative for short or long periods of
time.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Other
Investment Companies Risk.
The Fund will incur higher and duplicative expenses when it invests in other
investment companies such as ETFs. There is also the risk that the Fund may
suffer losses due to the investment practices of the underlying funds. When the
Fund invests in other investment companies, the Fund will be subject to
substantially the same risks as those associated with the direct ownership of
securities held by such investment companies. Investments in ETFs are also
subject to the “ETF Risks” described above.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Index is based on securities’ closing
prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected.
▪Trend
Lag Risk. At
least six consecutive trading days will elapse after the S&P Developed
Ex-U.S. LargeCap Index first drops below its historical 200-day simple moving
average (or conversely, first moves above such average) before the Index will
switch from tracking the S&P Developed Ex-U.S. LargeCap Index to 3-Month US
Treasury bills (or conversely, from 3-Month US Treasury bills to the S&P
Developed Ex-U.S. LargeCap Index ). As a result, if the S&P Developed
Ex-U.S. LargeCap Index is in an overall positive trend, the Index and
consequently the Fund may be adversely affected by a downward trend and/or
volatility in the S&P Developed Ex-U.S. LargeCap Index for up to six
consecutive trading days (or conversely, if the S&P Developed Ex-U.S.
LargeCap Index is in an overall negative trend, the Index and consequently the
Fund may not benefit from an upward trend and/or volatility in the S&P
Developed Ex-U.S. LargeCap Index for up to six consecutive trading days).
Accordingly, the methodology employed by the Index does not eliminate exposure
to downward trends and/or volatility in the S&P Developed Ex-U.S. LargeCap
Index or provide immediate exposure to upward trends and/or volatility in the
S&P Developed Ex-U.S. LargeCap Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total Return
as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 5.37%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 16.55% (quarter ended December 31, 2020)
and the Fund’s lowest return for a
calendar quarter was -12.13% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
| |
| 1
Year |
Since
Inception
(5/2/2019) |
Pacer
Trendpilot International ETF |
| |
Return
Before Taxes |
14.34% |
3.54% |
Return
After Taxes on Distributions |
14.01% |
3.31% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
9.12% |
2.85% |
Pacer
Trendpilot International Index
(reflects no deduction for
fees, expenses, or taxes) |
15.81% |
4.43% |
S&P
Developed Ex-US Large Cap Index
(reflects no deduction for
fees, expenses, or taxes) |
19.15% |
7.21% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Trendpilot®
US Bond ETF |
Investment
Objective
The
Pacer
Trendpilot US Bond ETF (the “Fund”) is an exchange traded fund
(“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer Trendpilot US Bond Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1
Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
131% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
The
Index uses an objective, rules-based methodology to implement a systematic
trend-following strategy that directs exposure to one of the following
positions: (i) 100% to the iBoxx®
USD Liquid High Yield Index, (ii) 50% to the iBoxx USD Liquid High Yield Index
and 50% to the iBoxx®
USD Treasuries 7-10 Year Index or (iii) 100% to iBoxx USD Treasuries 7-10 Year
Index, depending on the “Risk Ratio,” described below.
The
iBoxx USD Liquid High Yield Index is designed to track the performance of U.S.
dollar-denominated, high-yield corporate bonds issued in the U.S. The iBoxx USD
Treasuries 7-10 Year Index is designed to measure the performance of U.S.
Treasury bonds maturing in 7 to 10 years. The Index uses a “Risk Ratio” to
signal a change in the position of the Index. The Risk Ratio is calculated by
dividing the value of the iBoxx USD Liquid High Yield Index by the value of the
iBoxx USD Treasuries 7-10 Year Index.
The
Index, and consequently the Fund, may stay in any of its three possible
positions for an extended period of time. As described below, the Index will
change its position based on the following indicators, and each change will
become
effective
by the close of business on the sixth business day after the indicator for the
change is triggered. The Index will be in a new position effective on the
seventh business day.
High
Yield Indicator.
When the Risk Ratio closes above its 100-day historical simple moving average
(the “100-day moving average”) for five consecutive business days (the “High
Yield Indicator”), the exposure of the Index will be 100% to the iBoxx USD
Liquid High Yield Index, effective by the close of business on the sixth
business day following the date of the High Yield Indicator. The Index will be
in a new position effective on the seventh business day.
Once
the High Yield Indicator has been triggered, the exposure of the Index will next
change to either be 50% to the iBoxx USD Liquid High Yield Index and 50% iBoxx
USD Treasuries 7-10 Year Index if the 50/50 Indicator (described below) is
triggered or 100% to iBoxx USD Treasuries 7-10 Year Index if both the 50/50
Indicator and the Treasury Bond (“T-Bond”) Indicator (described below) are
triggered simultaneously, effective by the close of business on the sixth
business day following the date of the High Yield Indicator. The Index will be
in a new position effective on the seventh business day.
50/50
Indicator.
When the Risk Ratio closes below its 100-day moving average for five consecutive
business days (the “50/50 Indicator”), the exposure of the Index will be 50% to
the iBoxx USD Liquid High Yield Index and 50% iBoxx USD Treasuries 7-10 Year
Index, effective by the close of business on the sixth business day following
the date of the 50/50 Indicator. The Index will be in a new position effective
on the seventh business day. Following the effectiveness of the 50/50 Indicator,
the exposure of the Index may be greater than or less than 50% with respect to
the iBoxx USD Liquid High Yield Index and iBoxx USD Treasuries 7-10 Year Index
depending on their respective performance until either the High Yield Indicator
or T-Bond Indicator (described below) is triggered.
Once
the 50/50 Indicator has been triggered, the exposure of the Index will next
change to either be 100% to the iBoxx USD Liquid High Yield Index if the High
Yield Indicator is triggered or 100% to iBoxx USD Treasuries 7-10 Year Index if
the T-Bond Indicator (described below) is triggered, effective by the close of
business on the sixth business day following the date of the 50/50 Indicator.
The Index will be in a new position effective on the seventh business day.
T-Bond
Indicator.
When the Risk Ratio’s 100-day moving average closes lower than its value from
five business days earlier (the “T-Bond Indicator”), the exposure of the Index
will be 100% to iBoxx USD Treasuries 7-10 Year Index, effective by the close of
business on the sixth business day following the date of the T-Bond Indicator.
The Index will be in a new position effective on the seventh business day.
For
example, if today is Wednesday and the Risk Ratio 100-day moving average closes
lower than it did on the fifth preceding business day (Wednesday of the
preceding week), the T-Bond Indicator is triggered. Unlike the operation of the
High Yield Indicator and 50/50 Indicator, the closing values on the days in
between today and the fifth preceding business day do not affect whether the
T-Bond Indicator has been triggered; rather, the T-Bond Indicator simply
compares today’s closing value to the closing value five business days earlier.
However, the Index will not move directly from 100% exposure to the iBoxx USD
Liquid High Yield Index to 100% exposure to iBoxx USD Treasuries 7-10 Year Index
unless the 50/50 Indicator was simultaneously triggered following the most
recent triggering of the High Yield Indicator.
Once
the T-Bond Indicator has been triggered, the exposure of the Index will next
change to be 100% to the iBoxx USD Liquid High Yield Index if the High Yield
Indicator is triggered, effective by the close of business on the sixth
business day following the date of the indicator. The Index will be in
a new position effective on the seventh business day. Once the T-Bond Indicator
has been triggered, the Index will not return to its 50/50 position unless the
High Yield Indicator is first triggered, followed by the 50/50 Indicator being
triggered.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s net assets, plus borrowings for
investment purposes, will be invested in bonds denominated in U.S.
dollars. The Adviser expects that, over time, the correlation
between the Fund’s performance and that of the Index, before fees and expenses,
will be 95% or better.
The
Fund will generally use a “representative sampling” strategy, meaning it may
invest in a sample of the securities in the Index whose risk, return and other
characteristics closely resemble the risk, return and other characteristics of
the Index as a whole. However, the Fund may use a “replication” strategy to
achieve its investment objective, meaning it will invest in all of the component
securities of the Index in the same approximate proportion as in the Index, when
the Fund’s
sub-adviser
believes it is in the best interests of the Fund (e.g., when replicating the
Index does not involve practical difficulties or substantial costs).
The Fund generally may invest up to 20% of its total assets
(exclusive of any collateral held from securities lending) in securities or
other investments not included in the Index, but which the Fund’s sub-adviser
believes will help the Fund track the Index. For example, the Fund may invest in
securities that are not components of the Index to reflect various corporate
actions and other changes to the Index (such as reconstitutions, additions, and
deletions).
Principal Investment
Risks
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk. The
Index relies directly or indirectly on various sources of information to assess
the criteria of issuers included in the Index, including information that may be
based on assumptions and estimates. Neither the Fund, the Index Provider, or the
Adviser can offer assurances that the Index’s calculation methodology or sources
of information will provide an accurate assessment of included issuers or a
correct valuation of securities, nor can they guarantee the availability or
timeliness of the production of the Index.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Cash
Redemption Risk. The
Fund’s investment strategy may require it to redeem Shares for cash or to
otherwise include cash as part of its redemption proceeds. The Fund may be
required to sell or unwind portfolio investments to obtain the cash needed to
distribute redemption proceeds. This may cause the Fund to recognize a capital
gain that it might not have recognized if it had made a redemption in-kind. As a
result, the Fund may pay out higher annual capital gain distributions than if
the in-kind redemption process was used. ETF shares can only be redeemed in
creation units by APs. Individual shareholders may only purchase and sell ETF
shares on a secondary market.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as NYSE Arca, Inc. (the “Exchange”), and may be traded on U.S.
exchanges other than the Exchange, there can be no assurance
that
shares of the Fund will trade with any volume, or at all, on any stock exchange.
In stressed market conditions, the liquidity of shares of the Fund may begin to
mirror the liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those
shares.
▪Fixed
Income Risk.
Generally, the value of fixed income securities will change inversely with
changes in interest rates. As interest rates rise, the market value of fixed
income securities tends to decrease. Conversely, as interest rates fall, the
market value of fixed income securities tends to increase. This risk will be
greater for long-term securities than for short-term securities. In recent
periods, governmental financial regulators, including the U.S. Federal Reserve,
have taken steps to increase interest rates. Changes in government intervention
may have adverse effects on investments, volatility, and the liquidity of debt
markets.
◦Call
Risk.
During periods of falling interest rates, an issuer of a callable bond held by
the Fund may “call” or repay the security prior to its stated maturity, and the
Fund may have to reinvest the proceeds at lower interest rates, resulting in a
decline in the Fund’s income.
◦Credit
Risk.
Credit risk refers to the possibility that the issuer of a security will not be
able to make payments of interest and principal when due. Changes in an issuer’s
credit rating or the market’s perception of an issuer’s creditworthiness may
also affect the value of an investment in that
issuer.
◦Event
Risk.
Event risk is the risk that corporate issuers may undergo restructurings, such
as mergers, leveraged buyouts, takeovers, or similar events financed by
increased debt. As a result of the added debt, the credit quality and market
value of a company’s bonds and/or other debt securities may decline
significantly.
◦Extension
Risk.
When interest rates rise, certain obligations will be paid off by the obligor
more slowly than anticipated, causing the value of these securities to
fall.
◦Interest
Rate Risk.
Generally, the value of fixed income securities will change inversely with
changes in interest rates. As interest rates rise, the market value of fixed
income securities tends to decrease. Conversely, as interest rates fall, the
market value of fixed income securities tends to increase. This risk will be
greater for long-term securities than for short-term securities. Changes in
government intervention may have adverse effects on investments, volatility, and
illiquidity in debt markets.
◦Prepayment
Risk.
When interest rates fall, certain obligations will be paid off by the obligor
more quickly than originally anticipated, and the proceeds may have to be
invested in securities with lower
yields.
▪Government
Obligations Risk.
The Fund may invest in securities issued by the U.S. government. There can be no
guarantee that the United States will be able to meet its payment obligations
with respect to such securities. Additionally, market prices and yields of
securities supported by the full faith and credit of the U.S. government may
decline or be negative for short or long periods of
time.
▪High
Yield Risk. High
yield debt obligations (commonly known as “junk bonds”) are speculative
investments and entail greater risk of loss of principal than securities and
loans that are investment grade rated because of their greater exposure to
credit risk. The high yield market at times is subject to substantial volatility
and high yield debt obligations may be less liquid than higher quality
securities. As a result, the value of the Fund may be subject to greater
volatility than other funds, and the Fund may be exposed to greater tracking
risk (described below) than other funds.
▪Management
Risk. To
the extent the Fund uses a representative sampling strategy to obtain exposure
to the Index, the Fund’s ability to track the performance of the Index will be
contingent on the ability of the Fund’s sub-adviser to identify a subset of
Index components whose risk, return and other characteristics closely resemble
the risk, return and other characteristics of the Index as a
whole.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Tracking
Risk.
The Fund’s return may not track the return of the Index for a number of reasons.
For example, the Fund incurs a number of operating expenses not applicable to
the Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index. In addition, when the Fund uses a representative sampling
approach, the Fund may not be as well correlated with the return of the Index as
when the Fund purchases all of the securities in the Index in the proportions in
which they are represented in the Index. Additionally, to the extent the high
yield market experiences greater volatility or reduced liquidity, the Fund may
not be able to acquire or dispose of the high yield securities in the Index at
exactly the same time and price reflected in a reconstitution of the Index, and
consequently, the Index’s exposure to the iBoxx USD Liquid High Yield Index may
result in a greater difference between the returns of the Fund and those of the
Index.
▪Trend
Lag Risk. At least six consecutive trading days will elapse after the Risk
Ratio first drops below its historical 100-day simple moving average (or
conversely, first moves above such average) before the Index will switch from
tracking the iBoxx USD Liquid High Yield Index to the iBoxx USD Treasuries 7-10
Year Index (or conversely, from the iBoxx USD Treasuries 7-10 Year Index to the
iBoxx USD Liquid High Yield Index). As a result, if the iBoxx USD Liquid High
Yield Index is in an overall positive trend, the Index and consequently the Fund
may be adversely affected by a downward trend and/or volatility in the iBoxx USD
Liquid High Yield Index for up to six consecutive trading days (or conversely,
if the iBoxx USD Liquid High Yield Index is in an overall negative trend, the
Index and consequently the Fund may not benefit from an upward trend and/or
volatility in the iBoxx USD Liquid High Yield Index for up to six consecutive
trading days). Accordingly, the methodology employed by the Index does not
eliminate exposure to downward trends and/or volatility in the iBoxx USD Liquid
High Yield Index and does not provide immediate exposure to upward trends and/or
volatility in the iBoxx USD Liquid High Yield Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total Return
as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 1.73%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 7.09% (quarter ended December 31, 2023)
and the Fund’s lowest return for a
calendar quarter was -10.65% (quarter ended June 30,
2022).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
| |
| 1
Year |
Since
Inception
(10/22/2019) |
Pacer
Trendpilot US Bond ETF |
| |
Return
Before Taxes |
9.10% |
-0.36% |
Return
After Taxes on Distributions |
6.16% |
-2.12% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
5.29% |
-0.99% |
Pacer
Trendpilot US Bond Index
(reflects no deduction for
fees, expenses, or taxes) |
9.61% |
1.41% |
iBoxx
USD Liquid High Yield Index
(reflects no deduction for
fees, expenses, or taxes) |
12.89% |
2.89% |
S&P
U.S. High Yield Corporate Bond Index1
(reflects no deduction for
fees, expenses, or taxes) |
12.91% |
3.36% |
1
Effective
January 31, 2023, the iBoxx USD Liquid High Yield Index has replaced the S&P
U.S. High Yield Corporate Bond Index as the Fund’s primary benchmark as the
iBoxx USD Liquid High Yield Index is more closely aligned with the Fund’s
principal investment strategies and portfolio holdings.
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the Fund.
Investment
Sub-Adviser
Vident
Advisory, LLC d/b/a Vident Asset Management (“VA” or the “Sub-Adviser”) serves
as investment sub-adviser to the Fund.
Portfolio
Managers
Jim
Iredale, CFA, Senior Portfolio Manager – Fixed Income, and Jeff Kernagis, CFA,
Portfolio Manager of VA, have primary responsibility for the day-to-day
management of the Fund. Mr. Iredale has been a portfolio manager of the Fund
since the Fund’s inception and Mr. Kernagis has been a portfolio manager of the
Fund since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser, the Sub-Adviser, and their related companies may pay the
intermediary for activities related to the marketing and promotion of the Fund.
These payments may create a conflict of interest by influencing the
broker-dealer or other intermediary and your salesperson to recommend the Fund
over another investment. Ask your salesperson or visit your financial
intermediary’s website for more information.
|
| |
Pacer
Trendpilot®
Fund of Funds ETF |
Investment
Objective
The
Pacer
Trendpilot Fund of Funds ETF (the “Fund”) is an exchange traded
fund (“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer Trendpilot Fund of Funds Index (the “Index” or the “Fund
of Funds Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.15% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Acquired
Fund Fees and Expenses1 |
0.62% |
Total
Annual Fund Operating Expenses |
0.77% |
1
Acquired Fund Fees
and Expenses (“AFFE”) are the indirect costs of investing in other investment
companies. Total Annual Fund Operating Expenses do not correlate to the expense
ratios in the Fund’s Financial Highlights because the Financial Highlights
include only the direct operating expenses incurred by the Fund and exclude
AFFE.
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$79 |
$246 |
$428 |
$954 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
6% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group, an affiliate of Pacer Advisors, Inc., the Fund’s investment
adviser (the “Adviser”).
The
Index
The
Fund of Funds Index uses an objective, rules-based approach to construct a
portfolio that, as of each quarterly rebalance, is composed of the ETFs listed
in the following table, each advised by the Adviser (collectively, the
“Trendpilot ETFs”). Each of the Trendpilot ETFs is an index-based ETF that seeks
to track the total return performance, before fees and expenses, of the
underlying index listed in the following table (collectively, the “Trendpilot
Indexes”).
Each
Trendpilot Index other than the Pacer Trendpilot US Bond Index (collectively,
the “Trendpilot Equity Indexes”) uses an objective, rules-based methodology to
implement a systematic trend-following strategy that directs exposure (i) 100%
to the “Underlying Component” specified in the table below, (ii) 50% to the
applicable Underlying Component and 50% to 3-Month US Treasury bills, or (iii)
100% to 3-Month US Treasury bills, depending on the relative performance of the
Underlying Component and its 200-business day historical simple moving average
(the “200-day moving average”). The
calculation
of the 200-day moving average for each Underlying Component is based on the
total return version of such Underlying Component and reflects the reinvestment
of dividends paid by the securities in such Underlying Component.
The
Pacer Trendpilot US Bond Index (the “Trendpilot Bond Index”) uses an objective,
rules-based methodology to implement a systematic trend-following strategy that
directs exposure to one of the following positions: (i) 100% to the iBoxx USD
Liquid High Yield Index, (ii) 50% to the iBoxx USD Liquid High Yield Index and
50% to the iBoxx USD Treasuries 7-10 Year Index or (iii) 100% to iBoxx USD
Treasuries 7-10 Year Index, depending on the value of the iBoxx USD Liquid High
Yield Index divided by the value of the iBoxx USD Treasuries 7-10 Year Index
(the “Risk Ratio”).
|
|
|
|
|
|
|
|
|
|
| |
Weight |
Trendpilot
ETF |
Trendpilot
Index |
Equity
Component |
20% |
Pacer
Trendpilot®
US
Large Cap ETF |
Pacer
Trendpilot US Large Cap Index |
S&P
500®
Index |
20% |
Pacer
Trendpilot®
US Mid Cap ETF |
Pacer
Trendpilot US Mid Cap Index |
S&P
MidCap 400®
Index |
20% |
Pacer
Trendpilot®
100 ETF |
Pacer
NASDAQ-100 Trendpilot Index |
NASDAQ-100®
Index |
20% |
Pacer
Trendpilot®
International ETF |
Pacer
Trendpilot International Index |
S&P
Developed Ex-U.S. LargeCap Index |
20% |
Pacer
Trendpilot®
US Bond ETF |
Pacer
Trendpilot US Bond Index |
iBoxx
USD Liquid High Yield Index |
The
Trendpilot Indexes
Each
Trendpilot Equity Index uses a systematic trend following strategy that directs
the Trendpilot Equity Index’s exposure to either the applicable Underlying
Component, 50% to the applicable Underlying Component and 50% to 3-Month US
Treasury bills, or 100% to 3-Month US Treasury bills and may stay in any of its
three possible positions for an extended period of time. The Trendpilot Bond
Index uses a systematic trend following strategy that directs the Trendpilot
Bond Index’s exposure to either the applicable Underlying Component, 50% to the
applicable Underlying Component and 50% to the iBoxx USD Treasuries 7-10 Year
Index, or 100% to the iBoxx USD Treasuries 7-10 Year Index and may stay in any
of its three possible positions for an extended period of time. As described
below, each Trendpilot Index will change its position based on the following
indicators, and each change will become effective on the second business day
after the indicator for the change is triggered.
Underlying
Component Indicator.
When the applicable Underlying Component for the Trendpilot Equity Indexes
closes above its 200-day moving average for five consecutive business days (the
“Underlying Component Indicator” for such indexes), the exposure of the
applicable Trendpilot Index will be 100% to the Underlying Component, effective
on the second business following the date of the Underlying Component
Indicator.
Once
the Underlying Component Indicator has been triggered, the exposure of the
applicable Trendpilot Equity Index will next change to either be 50% to the
Underlying Component and 50% to 3-Month US Treasury bills if the 50/50 Indicator
(described below) is triggered or 100% to 3-Month US Treasury bills if both the
50/50 Indicator and the Treasury Indicator (described below) are triggered
simultaneously, effective on the second business day following the date of the
indicator(s).
With
respect to the Trendpilot Bond Index, when the Risk Ratio closes above its
100-day historical simple moving average (the “100-day moving average”) for five
consecutive business days (the “Underlying Component Indicator” for such index),
the exposure of the Trendpilot Bond Index will be 100% to the iBoxx USD Liquid
High Yield Index, effective by the close of business on the sixth business day
following the date of the Underlying Component Indicator.
Once
the Underlying Component Indicator has been triggered, the exposure of the
Trendpilot Bond Index will next change to either be 50% to the iBoxx USD Liquid
High Yield Index and 50% iBoxx USD Treasuries 7-10 Year Index if the 50/50
Indicator (described below) is triggered or 100% to iBoxx USD Treasuries 7-10
Year Index if both the 50/50 Indicator and the Treasury Indicator (described
below) are triggered simultaneously, effective by the close of business on the
sixth business day following the date of the Underlying Component
Indicator.
50/50
Indicator.
With respect to each Trendpilot Equity Index, when the applicable Underlying
Component closes below its 200-day moving average for five consecutive business
days (the “50/50 Indicator” for such index), the exposure of the Trendpilot
Equity Index will be 50% to the Underlying Component and 50% to 3-Month US
Treasury bills, effective on the second business day following the date of the
50/50 Indicator (“50/50 Exposure”). Following the effectiveness of the 50/50
Indicator, the exposure of the Trendpilot Equity Index may be greater than or
less than 50% with respect to the
Underlying
Component and 3-Month US Treasury bills depending on their respective
performance until either the Underlying Component Indicator or Treasury
Indicator (described below) is triggered.
Once
the 50/50 Indicator has been triggered, the exposure of the Trendpilot Equity
Index will next change to either be 100% to the Underlying Component if the
Underlying Component Indicator is triggered or 100% to 3-Month US Treasury bills
if the Treasury Indicator (described below) is triggered, effective on the
second business day following the date of the indicator.
With
respect to each Trendpilot Bond Index, when the Risk Ratio closes below its
100-day moving average for five consecutive business days (the “50/50
Indicator”), the exposure of the Trendpilot Bond Index will be 50% to the iBoxx
USD Liquid High Yield Index and 50% iBoxx USD Treasuries 7-10 Year Index,
effective by the close of business on the sixth business day following the date
of the 50/50 Indicator. Following the effectiveness of the 50/50 Indicator, the
exposure of the Trendpilot Bond Index may be greater than or less than 50% with
respect to the iBoxx USD Liquid High Yield Index and iBoxx USD Treasuries 7-10
Year Index depending on their respective performance until either the Underlying
Component Indicator or Treasury Indicator (described below) is
triggered.
Once
the 50/50 Indicator has been triggered, the exposure of the Trendpilot Bond
Index will next change to either be 100% to the iBoxx USD Liquid High Yield
Index if the Underlying Component Indicator is triggered or 100% to iBoxx USD
Treasuries 7-10 Year Index if the Treasury Indicator (described below) is
triggered, effective by the close of business on the sixth business day
following the date of the 50/50 Indicator.
Treasury
Indicator. With
respect to each Trendpilot Equity Index, when the applicable Underlying
Component’s 200-day moving average closes lower than its value from five
business days earlier (the “Treasury Indicator” for such index), the exposure of
the Trendpilot Equity Index will be 100% to 3-Month US Treasury bills, effective
on the second business day following the date of the Treasury
Indicator.
For
example, if today is Wednesday and the applicable Underlying Component’s 200-day
moving average closes lower than it did on the fifth preceding business day
(Wednesday of the preceding week), the Treasury Indicator is triggered. Unlike
the operation of the Underlying Component Indicator and 50/50 Indicator, the
closing values on the days in between today and the fifth preceding business day
do not affect whether the Treasury Indicator has been triggered; rather, the
Treasury Indicator simply compares today’s closing value to the closing value
five business days earlier. However, the Trendpilot Equity Index will not move
directly from 100% exposure to the Underlying Component to 100% exposure to
3-Month US Treasury bills unless the 50/50 Indicator was simultaneously
triggered following the most recent triggering of the Underlying Component
Indicator.
With
respect to the Trendpilot Bond Index, when the Risk Ratio’s 100-day moving
average closes lower than its value from five business days earlier (the
“Treasury Indicator” for such index), the exposure of the Trendpilot Bond Index
will be 100% to iBoxx USD Treasuries 7-10 Year Index, effective by the close of
business on the sixth business day following the date of the Treasury
Indicator.
For
example, if today is Wednesday and the Risk Ratio 100-day moving average closes
lower than it did on the fifth preceding business day (Wednesday of the
preceding week), the Treasury Indicator is triggered. Unlike the operation of
the Underlying Component Indicator and 50/50 Indicator, the closing values on
the days in between today and the fifth preceding business day do not affect
whether the Treasury Indicator has been triggered; rather, the Treasury
Indicator simply compares today’s closing value to the closing value five
business days earlier. However, the Trendpilot Bond Index will not move directly
from 100% exposure to the iBoxx USD Liquid High Yield Index to 100% exposure to
iBoxx USD Treasuries 7-10 Year Index unless the 50/50 Indicator was
simultaneously triggered following the most recent triggering of the Underlying
Component Indicator.
Once
the Treasury Indicator has been triggered, the exposure of the Trendpilot Index
will next change to be 100% to the Underlying Component if the Underlying
Component Indicator is triggered, effective on the second business day following
the date of the indicator. Once the Treasury Indicator has been triggered, the
Trendpilot Index will not return to its 50/50 position unless the Underlying
Component Indicator is first triggered, followed by the 50/50 Indicator being
triggered.
Each
Trendpilot Index aims to mitigate, to some extent, the volatility of the
Underlying Component by tracking 3-Month US Treasury bills or the iBoxx USD
Treasuries 7-10 Year Index (instead of the Underlying Component), as applicable,
when
the applicable Underlying Component is in a negative trend. Because the
Underlying Component Indicator, 50/50 Indicator, and Treasury Indicator
(collectively, the “Exposure Indicators”) for each Trendpilot Index operate
independent of the Exposure Indicators for each other Trendpilot Index, the Fund
of Funds Index may reflect Underlying Component exposure for each Trendpilot
ETF, a mix of Underlying Component exposures and 3-Month US Treasury bills, or
entirely 3-Month US Treasury bills for short or long periods of time. When the
50/50 Indicator or Treasury Indicator has been triggered for a particular
Trendpilot ETF, the Fund of Funds Index will have reduced or no exposure,
respectively, to the applicable Trendpilot ETF’s Underlying
Component.
Special
Indicator.
For each Trendpilot Equity Index, in the event the Underlying Component closes
20% above or 20% below its 200-day simple moving average, the Trendpilot Equity
Index will change exposures effective at the end of the following business day
to its 50/50 Exposure. This new exposure (the “Special Exposure”) will continue
until the applicable Underlying Component Indicator, 50/50 Indicator, or
Treasury Indicator is triggered.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Fund of Funds Index (i.e., the Trendpilot ETFs). The Adviser expects that,
over time, the correlation between the Fund’s performance and that of the Fund
of Funds Index, before fees and expenses, will be 95% or
better.
The Fund will generally use a “replication” strategy to achieve its
investment objective, meaning it will invest in all of the component securities
of the Index in the same approximate proportion as in the
Index.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Currency
Exchange Rate Risk. The
Fund’s assets may include exposure to investments denominated in non-U.S.
currencies or in securities or other assets that provide exposure to such
currencies. Changes in currency exchange rates and the relative value of
non-U.S. currencies will affect the value of the Fund’s investment and the value
of your Fund shares. Currency exchange rates can be very volatile and can change
quickly and unpredictably. As a result, the value of an investment in the Fund
may change quickly and without warning and you may lose
money.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform
these
services, or (ii) market makers and/or liquidity providers exit the
business or significantly reduce their business activities and no other entities
step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Because
securities held by the Fund trade on foreign exchanges that are closed when the
Fund’s primary listing exchange is open, the Fund is likely to experience
premiums and discounts greater than those of domestic
ETFs.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as NYSE Arca, Inc. (the “Exchange”), and may be traded on U.S.
exchanges other than the Exchange, there can be no assurance that shares of the
Fund will trade with any volume, or at all, on any stock exchange. In stressed
market conditions, the liquidity of shares of the Fund may begin to mirror the
liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪Fixed
Income Risk.
Generally, the value of fixed income securities will change inversely with
changes in interest rates. As interest rates rise, the market value of fixed
income securities tends to decrease. Conversely, as interest rates fall, the
market value of fixed income securities tends to increase. This risk will be
greater for long-term securities than for short-term securities. In recent
periods, governmental financial regulators, including the U.S. Federal Reserve,
have taken steps to increase interest rates. Changes in government intervention
may have adverse effects on investments, volatility, and the liquidity of debt
markets.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪Government
Obligations Risk.
The Fund may invest in securities issued by the U.S. government. There can be no
guarantee that the United States will be able to meet its payment obligations
with respect to such securities. Additionally, market prices and yields of
securities supported by the full faith and credit of the U.S. government may
decline or be negative for short or long periods of
time.
▪High
Yield Risk.
High yield securities (or “junk bonds”) entail greater risk of loss of principal
because of their greater exposure to credit risk. High yield debt obligations
are speculative investments and may also be less liquid than higher quality
securities, and may cause income and principal losses for the Fund. The market
for high yield securities is generally thinner and less active than the market
for higher quality securities. If there is a “flight to safety,” the market’s
perception of “high yield” securities may turn negative, and these types of
securities may become classified as “high risk.” Consequently, high yield
securities and loans entail greater risk of loss of principal than securities
and loans that are investment grade rated. Investment in or exposure to high
yield (lower rated) debt instruments (also known as “junk bonds”) may involve
greater levels of interest rate, credit, liquidity and valuation risk than for
higher rated instruments. High yield debt instruments may be sensitive to
economic changes, political changes, or adverse developments specific to a
company.
▪Large-Capitalization
Investing Risk. The Fund may invest in the securities of large-capitalization
companies. As a result, the Fund’s performance may be adversely affected if
securities of large-capitalization companies underperform securities of
smaller-capitalization companies or the market as a whole. The securities of
large-capitalization companies may be relatively mature compared to smaller
companies and therefore subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The Fund may invest in the securities of mid-capitalization
companies. As a result, the Fund’s performance may be adversely affected if
securities of mid-capitalization companies underperform securities of other
capitalization ranges or the market as a whole. Securities of smaller companies
trade in smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Other
Investment Companies Risk.
The Fund primarily invests in other ETFs and will incur higher and duplicative
expenses as a result of such investments. There is also the risk that the Fund
may suffer losses due to the investment practices of the underlying funds. When
the Fund invests in other investment companies, the Fund will be subject to
substantially the same risks as those associated with the direct ownership of
securities held by such investment companies. Investments in ETFs are also
subject to the “ETF Risks” described above.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Index is based on securities’ closing
prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected.
▪Trend
Lag Risk. At
least six consecutive trading days will elapse after the applicable Equity
Component first drops below its historical 200-day simple moving average (or
conversely, first moves above such average) before a Trendpilot Index will
switch from tracking the Equity Component to 3-Month US Treasury bills (or
conversely, from 3-Month US Treasury bills to the Equity Component). As a
result, if the Equity Component is in an overall positive trend, the Trendpilot
Index and consequently the Fund of Funds Index and the Fund may be adversely
affected by a downward trend and/or volatility in the Equity Component for up to
six consecutive trading days (or conversely, if the Equity Component is in an
overall negative trend, the Trendpilot Index and consequently the Fund of Funds
Index and the Fund may not benefit from an upward trend and/or volatility in the
Equity Component for up to six consecutive trading days). Accordingly, the
methodology employed by each Trendpilot Index does not eliminate exposure to
downward trends and/or volatility in the Equity Component and does not provide
immediate exposure to upward trends and/or volatility in the Equity
Component.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total Return
as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 7.50%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 12.48% (quarter ended December 31, 2020)
and the Fund’s lowest return for a
calendar quarter was -13.36% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
| |
| 1
Year |
Since
Inception
(5/3/2019) |
Pacer
Trendpilot Fund of Funds ETF |
| |
Return
Before Taxes |
16.40% |
4.90% |
Return
After Taxes on Distributions |
15.45% |
4.43% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
9.92% |
3.68% |
Pacer
Trendpilot Fund of Funds Index
(reflects no deduction for
fees, expenses, or taxes) |
16.97% |
5.96% |
S&P
1200 Index
(reflects no deduction for
fees, expenses, or taxes) |
23.38% |
10.43% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
US Cash Cows 100 ETF |
Investment
Objective
The
Pacer US
Cash Cows 100 ETF (the “Fund”) is an exchange traded fund
(“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer US Cash Cows 100 Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.49% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.49% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$50 |
$157 |
$274 |
$616 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
77% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
|
|
|
|
|
|
|
| |
The
Index uses an objective, rules-based methodology to provide exposure to
large and mid-capitalization U.S. companies with high free cash flow
yields. Companies with high free cash flow yields are commonly referred to
as “cash cows”. |
|
Free
Cash Flow (FCF): A
company’s cash flow from operations minus capital
expenditures.
Enterprise
Value (EV): A
company’s market capitalization plus its debt and minus its cash and cash
equivalents.
Free
Cash Flow Yield:
FCF / EV |
The
initial index universe is derived from the component companies of the
Russell 1000®
Index. The initial universe of companies is screened based on their
average projected free cash flows and earnings (if available) over each of
the next two fiscal years. Companies with no forward year estimates
available for free cash flows or earnings will remain in the Index
universe. Companies with negative average projected free cash flows or
earnings are removed from the Index universe. Additionally, financial
companies, other than real estate investment trusts (“REITs”), are
excluded from the Index universe. |
|
The
remaining companies are ranked by their free cash flow yield for the trailing
twelve month period. The equity securities of the 100 companies with the highest
free cash flow yield are included in the Index.
At
the time of each rebalance of the Index, the companies included in the Index are
weighted in proportion to their trailing twelve month free cash flow, and
weightings are capped at 2% of the weight of the Index for any individual
company. The Index is reconstituted and rebalanced quarterly as of the close of
business on the 3rd
Friday of March, June, September, and December based on data as of the
1st
Friday of the applicable rebalance month.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index.
The Adviser expects that, over time, the correlation between the Fund’s
performance and that of the Index, before fees and expenses, will be 95% or
better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the
Index.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
Risk.
If the Index concentrates in an industry or group of industries, the Fund’s
investments may be concentrated accordingly. In such event, the value of the
Fund’s shares may rise and fall more than the value of shares of a fund that
invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
▪Equity
Market Risk. The equity securities held in the Fund’s portfolio may experience
sudden, unpredictable drops in value or long periods of decline in value. This
may occur because of factors that affect securities markets generally or factors
affecting specific industries, sectors or companies in which the Fund invests.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value as market confidence in and
perceptions of their issuers change. The Fund’s NAV and market price may
fluctuate significantly in response to these and other factors. As a result, an
investor could lose money over short or long periods of time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act
as APs. In addition, there may be a limited number of market makers and/or
liquidity providers in the marketplace. To the extent either of the following
events occur, shares of the Fund may trade at a material discount to NAV and
possibly face delisting: (i) APs exit the business or otherwise become
unable to process creation and/or redemption orders and no other APs step
forward to perform these services, or (ii) market makers and/or liquidity
providers exit the business or significantly reduce their business activities
and no other entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as Cboe BZX Exchange, Inc. (the “Exchange”), and may be
traded on U.S. exchanges other than the Exchange, there can be no assurance that
shares of the Fund will trade with any volume, or at all, on any stock exchange.
In stressed market conditions, the liquidity of shares of the Fund may begin to
mirror the liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Consumer
Discretionary Sector Risk.
The
Fund may invest in companies in the consumer discretionary sector, and therefore
the performance of the Fund could be negatively impacted by events affecting
this sector.
The success of consumer product
manufacturers and retailers is tied closely to the performance of domestic and
international economies, interest rates, exchange rates, competition, consumer
confidence, changes in demographics and consumer preferences. Companies in the
consumer discretionary sector depend heavily on disposable household income and
consumer spending, and may be strongly affected by social trends and marketing
campaigns. These companies may be subject to severe competition, which may have
an adverse impact on their profitability.
◦Energy
Sector Risk. The
Fund may invest in companies in the energy sector, and therefore the performance
of the Fund could be negatively impacted by events affecting this
sector. The profitability of companies in the energy sector is related to
worldwide energy prices, exploration, and production spending. The value of
securities issued by companies in the energy sector may decline for many
reasons, including, among others, changes in energy
prices,
government regulations, energy conservation efforts, natural disasters, and
potential civil liabilities. Such companies are also subject to risks changes in
economic conditions, as well as market and political risks of the countries
where energy companies are located or do
business.
◦Health
Care Sector Risk. The
Fund may invest in companies in the health care sector, and therefore the
performance of the Fund could be negatively impacted by events affecting this
sector. Companies in the health care sector are subject to extensive government
regulation and their profitability can be significantly affected by restrictions
on government reimbursement for medical expenses, rising costs of medical
products and services, pricing pressure (including price discounting), limited
product lines and an increased emphasis on the delivery of healthcare through
outpatient services.
▪Style
Risk. The
Fund’s emphasis on dividend-paying stocks involves the risk that such stocks may
fall out of favor with investors and underperform the market. Also, a company
may reduce or eliminate its dividend, which may have a negative impact on the
Fund’s performance.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year, and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total Return
as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 5.81%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 21.60% (quarter ended March 31, 2021) and
the Fund’s lowest return for a
calendar quarter was -27.76% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
5
Years |
Since
Inception
(12/16/16) |
Pacer
US Cash Cows 100 ETF |
|
| |
Return Before
Taxes |
14.78% |
17.65% |
13.32% |
Return
After Taxes on Distributions |
14.22% |
17.03% |
12.75% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
9.09% |
14.18% |
10.74% |
Pacer
US Cash Cows 100 Index
(reflects no deduction for
fees, expenses, or taxes) |
15.39% |
18.15% |
13.79% |
Russell
1000®
Index
(reflects no deduction for
fees, expenses, or taxes) |
26.53% |
15.52% |
13.01% |
Russell
1000®
Value Index
(reflects no deduction for
fees, expenses, or taxes) |
11.46% |
10.91% |
8.17% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
US Small Cap Cash Cows 100 ETF |
Investment
Objective
The
Pacer US
Small Cap Cash Cows 100 ETF (the “Fund”) is an exchange traded
fund (“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer US Small Cap Cash Cows Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.59% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.59% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$60 |
$189 |
$329 |
$738 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
108% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
|
|
|
|
|
|
|
| |
The
Index uses an objective, rules-based methodology to provide exposure to
small-capitalization U.S. companies with high free cash flow yields.
Companies with high free cash flow yields are commonly referred to as
“cash cows”. |
|
Free
Cash Flow (FCF): A
company’s cash flow from operations minus capital
expenditures.
Enterprise
Value (EV): A
company’s market capitalization plus its debt and minus its cash and cash
equivalents.
Free
Cash Flow Yield:
FCF / EV |
The
initial Index universe is derived from the component companies of the
S&P Small Cap 600®
Index.
The initial universe of companies is screened based on their average
projected free cash flows and earnings (if available) over each of the
next two fiscal years. Companies for which information on their projected
free cash flows or earnings is not available will remain in the Index
universe. Companies with negative average projected free cash flows or
earnings are removed from the Index universe. Additionally, financial
companies, other than real estate investment trusts (“REITs”), are
excluded from the Index universe. |
|
The
remaining companies are ranked by their free cash flow yield for the trailing
twelve month period. The equity securities of the 100 companies with the highest
free cash flow yield are included in the Index.
At
the time of each rebalance of the Index, the companies included in the Index are
weighted in proportion to their trailing twelve month free cash flow, and
weightings are capped at 2% of the weight of the Index for any individual
company. Weight above the 2% limitation is redistributed among the other Index
constituents in proportion to their weights. As of June 30, 2024, the companies
included in the Index had a market capitalization of $425 million to $6.5
billion. The Index is reconstituted and rebalanced quarterly as of the close of
business on the 3nd
Friday of March, June, September, and December based on data as of the
2nd
Friday of the applicable rebalance month.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index.
The Adviser expects that, over time, the correlation between the Fund’s
performance and that of the Index, before fees and expenses, will be 95% or
better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the
Index.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
Risk. If the Index concentrates in an industry or group of industries, the
Fund’s investments may be concentrated accordingly. In such event, the value of
the Fund’s shares may rise and fall more than the value of shares of a fund that
invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their
functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as Cboe BZX Exchange, Inc. (the “Exchange”), and may be
traded on U.S. exchanges other than the Exchange, there can be no assurance that
shares of the Fund will trade with any volume, or at all, on any stock exchange.
In stressed market conditions, the liquidity of shares of the Fund may begin to
mirror the liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪High
Portfolio Turnover Risk. At times, the Fund may have a portfolio turnover rate substantially
greater than 100%. A high portfolio turnover rate would result in
correspondingly greater transaction expenses, including brokerage commissions,
dealer mark ups and other transaction costs, on the sale of securities and on
reinvestment in other securities and may result in reduced performance and the
distribution to shareholders of additional capital gains for tax purposes. These
factors may negatively affect the Fund’s performance.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Consumer
Discretionary Sector Risk.
The
Fund may invest in companies in the consumer discretionary sector, and therefore
the performance of the Fund could be negatively impacted by events affecting
this sector.
The
success of consumer product manufacturers and retailers is tied closely to the
performance of domestic and international economies, interest rates, exchange
rates, competition, consumer confidence, changes in demographics and consumer
preferences. Companies in the consumer discretionary sector depend heavily on
disposable household income and consumer spending, and may be strongly affected
by social trends and marketing campaigns. These companies may be subject to
severe competition, which may have an adverse impact on their
profitability.
◦Health
Care Sector Risk. The
Fund may invest in companies in the health care sector, and therefore the
performance of the Fund could be negatively impacted by events affecting this
sector. Companies in the health care sector are subject to extensive government
regulation and their profitability can be significantly affected by restrictions
on government reimbursement for medical expenses, rising costs of medical
products and services, pricing pressure (including price discounting), limited
product lines and an increased emphasis on the delivery of healthcare through
outpatient services.
◦Industrials
Sector Risk.
The Fund may invest in companies in the industrials sector, and therefore the
performance of the Fund could be negatively impacted by events affecting this
sector. The industrials sector may be affected by
changes in the supply of and demand for products and services,
product obsolescence, claims for environmental damage or product liability and
general economic conditions, among other factors.
◦Information
Technology Sector Risk.The
Fund may invest in companies in the information technology sector, and therefore
the performance of the Fund could be negatively impacted by events affecting
this sector. Market or economic factors impacting information technology
companies and companies that rely heavily on technological advances could have a
significant effect on the value of the Fund’s investments. The value of stocks
of information technology companies and companies that rely heavily on
technology is particularly vulnerable to rapid changes in technology product
cycles, rapid product obsolescence, government regulation and competition, both
domestically and internationally, including competition from foreign competitors
with lower production costs. Stocks of information technology companies and
companies that rely heavily on technology, especially those of smaller,
less-seasoned companies, tend to be more volatile than the overall market.
Information technology companies are heavily dependent on patent and
intellectual property rights, the loss or impairment of which may adversely
affect profitability.
▪Small-Capitalization
Companies Risk. The equity securities of small-capitalization companies have
historically been subject to greater investment risk than securities of larger
companies. The prices of equity securities of small-capitalization companies
tend to be more volatile and less liquid than the prices of equity securities of
larger companies.
▪Style
Risk. The
Fund’s emphasis on dividend-paying stocks involves the risk that such stocks may
fall out of favor with investors and underperform the market. Also, a company
may reduce or eliminate its dividend, which may have a negative impact on the
Fund’s performance.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year, and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total Return
as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was -8.89%. During the period of
time shown in the bar chart, the Fund’s highest
return for a calendar quarter was 35.33% (quarter ended June 30, 2020) and
the Fund’s lowest return for a
calendar quarter was -35.46% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
5
Years |
Since
Inception
(6/16/17) |
Pacer
US Small Cap Cash Cows 100 ETF |
|
| |
Return Before
Taxes |
35.54% |
17.37% |
12.20% |
Return
After Taxes on Distributions |
35.10% |
16.97% |
11.83% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
21.27% |
14.01% |
9.80% |
Pacer
US Small Cap Cash Cows Index
(reflects no deduction for
fees, expenses, or taxes) |
35.66% |
17.81% |
12.56% |
S&P
SmallCap 600®
Index
(reflects no deduction for
fees, expenses, or taxes) |
16.05% |
11.03% |
8.53% |
S&P
SmallCap 600®
Value Index
(reflects no deduction for
fees, expenses, or taxes) |
14.89% |
11.31% |
8.04% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Global Cash Cows Dividend ETF |
Investment
Objective
The
Pacer
Global Cash Cows Dividend ETF (the “Fund”) is an exchange traded
fund (“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer Global Cash Cows Dividend Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
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|
|
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| |
1 Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
65% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
|
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|
|
|
|
|
| |
The
Index uses an objective, rules-based methodology to provide exposure to
global companies with high dividend yields backed by a high free cash flow
yield. |
|
Free
Cash Flow (FCF): A
company’s cash flow from operations minus capital
expenditures.
Enterprise
Value (EV): A
company’s market capitalization plus its debt and minus its cash and cash
equivalents.
Free
Cash Flow Yield:
FCF / EV |
The
initial index universe is derived from the component companies of the FTSE
All-World Developed Large Cap Index. The initial universe of companies is
screened based on their average projected free cash flows and earnings (if
available) over each of the next two fiscal years. Companies with negative
average projected free cash flows or earnings are removed from the Index
universe. Additionally, financial companies, other than real estate
investment trusts (“REITs”), are excluded from the Index
universe. |
|
The
remaining companies are ranked by their free cash flow yield for the trailing
twelve month period. The 300 companies with the highest free cash flow yield are
then ranked by their dividend yield. The equity securities of the 100 companies
with the highest dividend yield are included in the Index.
At
the time of each rebalance of the Index, the companies included in the Index are
weighted based on the aggregate amount of dividends distributed by each company
for the trailing twelve month period, and weightings are capped at 2% of the
weight of the Index for any individual company. The Index is reconstituted and
rebalanced semi-annually as of the close of business on the 3rd
Friday of June and December based on data as of the 1st
Friday of the applicable rebalance month.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index and investments that have economic characteristics that
are substantially identical to the economic characteristics of such component
securities (e.g., depositary receipts). The Adviser expects that,
over time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the
Index.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
Risk.
If the Index concentrates in an industry or group of industries, the Fund’s
investments may be concentrated accordingly. In such event, the value of the
Fund’s shares may rise and fall more than the value of shares of a fund that
invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
▪Currency
Exchange Rate Risk. The
Fund’s assets may include investments denominated in non-U.S. currencies, such
as the euro, or in securities or other assets that provide exposure to such
currencies. Changes in currency exchange rates and the relative value of
non-U.S. currencies will affect the value of the Fund’s investment and the value
of your Fund shares. Currency exchange rates can be very volatile and can change
quickly and unpredictably. As a result, the value of an investment in the Fund
may change quickly and without warning and you may lose
money.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market
makers
and/or liquidity providers in the marketplace. To the extent either of the
following events occur, shares of the Fund may trade at a material discount to
NAV and possibly face delisting: (i) APs exit the business or otherwise
become unable to process creation and/or redemption orders and no other APs step
forward to perform these services, or (ii) market makers and/or liquidity
providers exit the business or significantly reduce their business activities
and no other entities step forward to perform their
functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Because
securities held by the Fund trade on foreign exchanges that are closed when the
Fund’s primary listing exchange is open, the Fund is likely to experience
premiums and discounts greater than those of domestic
ETFs.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as Cboe BZX Exchange, Inc. (the “Exchange”), and may be
traded on U.S. exchanges other than the Exchange, there can be no assurance that
shares of the Fund will trade with any volume, or at all, on any stock exchange.
In stressed market conditions, the liquidity of shares of the Fund may begin to
mirror the liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪Geographic
Concentration Risk. To
the extent the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or
region.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Passive
Investment Risk. The Fund is not actively managed and the Adviser would not sell a
security due to current or projected underperformance of a security, industry or
sector, unless that security is removed from the Index or the selling of shares
of that security is otherwise required upon a reconstitution of the Index in
accordance with the Index methodology. The Fund invests in securities included
in the Index, regardless of their investment merits. The Fund does not take
defensive positions under any market conditions, including conditions that are
adverse to the performance of the Fund.
▪Style
Risk. The
Fund’s emphasis on dividend-paying stocks involves the risk that such stocks may
fall out of favor with investors and underperform the market. Also, a company
may reduce or eliminate its dividend, which may have a negative impact on the
Fund’s performance.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Index is based on securities’ closing
prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year, and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 1.49%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 20.08% (quarter ended December 31, 2022)
and the Fund’s lowest return for a
calendar quarter was -27.03% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
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|
|
|
|
| |
| 1
Year |
5
Years |
Since
Inception
(2/22/16) |
Pacer
Global Cash Cows Dividend ETF |
|
| |
Return
Before Taxes |
13.69% |
9.14% |
8.43% |
Return
After Taxes on Distributions |
12.58% |
8.16% |
7.59% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
9.37% |
7.26% |
6.79% |
Pacer
Global Cash Cows Dividend Index
(reflects no deduction for
fees, expenses, or taxes) |
15.06% |
10.12% |
9.39% |
FTSE
All-World Developed Large-Cap Index
(reflects no deduction for
fees, expenses, or taxes) |
26.11% |
13.66% |
12.30% |
MSCI
World Value Index
(reflects no deduction for
fees, expenses, or taxes) |
11.51% |
8.87% |
8.52% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Developed Markets International Cash Cows 100
ETF |
Investment
Objective
The
Pacer
Developed Markets International Cash Cows 100 ETF (the “Fund”)
is an exchange traded fund (“ETF”) that seeks to track the total return
performance, before fees and expenses, of the Pacer Developed Markets
International Cash Cows 100 Index (the “Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.65% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.65% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
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|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$66 |
$208 |
$362 |
$810 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
67% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
|
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|
|
|
|
|
| |
The
Index uses an objective, rules-based methodology to provide exposure to
large and mid-capitalization non-U.S. companies in developed markets with
high free cash flow yields. Companies with high free cash flow yields are
commonly referred to as “cash cows”. |
|
Free
Cash Flow (FCF): A
company’s cash flow from operations minus capital
expenditures.
Enterprise
Value (EV): A
company’s market capitalization plus its debt and minus its cash and cash
equivalents.
Free
Cash Flow Yield:
FCF / EV |
The
initial index universe is derived from the component companies of the FTSE
Developed ex US Index. The initial universe of companies is screened based
on their average projected free cash flows and earnings (if available)
over each of the next two fiscal years. Companies with no forward year
estimates available for free cash flows or earnings will remain in the
Index universe. Companies with negative average projected free cash flows
or earnings are removed from the Index universe. Additionally, financial
companies, other than real estate investment trusts (“REITs”), and
companies with a market capitalization of less than $3 billion are
excluded from the Index universe. |
|
The
remaining companies are ranked by their average daily trading value (“ADTV”) for
the prior three months. The 500 companies with the highest ADTV are then ranked
by their free cash flow yield for the trailing twelve month period. The equity
securities of the 100 companies with the highest free cash flow yield are
included in the Index.
At
the time of each rebalance of the Index, the companies included in the Index are
weighted in proportion to their trailing twelve month free cash flow, and
weightings are capped at 2% of the weight of the Index for any individual
company. As of June 30, 2024, the Index did not have significant exposure to
companies in any countries, and the companies included in the Index had a market
capitalization of $1 billion to $241.3 billion. The Index is reconstituted and
rebalanced semi-annually as of the close of business on the 3rd
Friday of June and December based on data as of the 1st
Friday of the applicable rebalance month.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index and investments that have economic characteristics that
are substantially identical to the economic characteristics of such component
securities (e.g., depositary receipts). The Adviser expects that,
over time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the
Index.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
Risk.
If the Index concentrates in an industry or group of industries, the Fund’s
investments may be concentrated accordingly. In such event, the value of the
Fund’s shares may rise and fall more than the value of shares of a fund that
invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
▪Currency
Exchange Rate Risk. The Fund’s assets may include investments denominated in non-U.S.
currencies, such as the euro, or in securities or other assets that provide
exposure to such currencies. Changes in currency exchange rates and the relative
value of non-U.S. currencies will affect the value of the Fund’s investment and
the value of your Fund shares. Currency exchange rates can be very volatile and
can change quickly and unpredictably. As a result, the value of an investment in
the Fund may change quickly and without warning and you may lose
money.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act
as APs. In addition, there may be a limited number of market makers and/or
liquidity providers in the marketplace. To the extent either of the following
events occur, shares of the Fund may trade at a material discount to NAV and
possibly face delisting: (i) APs exit the business or otherwise become
unable to process creation and/or redemption orders and no other APs step
forward to perform these services, or (ii) market makers and/or liquidity
providers exit the business or significantly reduce their business activities
and no other entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Because
securities held by the Fund trade on foreign exchanges that are closed when the
Fund’s primary listing exchange is open, the Fund is likely to experience
premiums and discounts greater than those of domestic
ETFs.
◦Trading. Although shares of the Fund are listed
for trading on a national securities exchange, such as Cboe BZX Exchange,
Inc. (the “Exchange”), and may be traded on U.S. exchanges other than the
Exchange, there can be no assurance that shares of the Fund will trade with any
volume, or at all, on any stock exchange. In stressed market conditions, the
liquidity of shares of the Fund may begin to mirror the liquidity of the Fund’s
underlying portfolio holdings, which can be significantly less liquid than
shares of the Fund, and this could lead to differences between the market price
of the shares of the Fund and the underlying value of those
shares.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪Geographic
Concentration Risk. To
the extent the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or region. Because the
Index constituents are a subset of those of the FTSE Developed ex US Index, the
geographic concentrations of the Index, and consequently the Fund, may be
different than those of the broader FTSE Developed ex US
Index.
◦Risks
Related to Investing in Europe.
The Fund is more exposed to the economic and political risks of Europe and of
the European countries in which it invests than funds whose investments are more
geographically diversified. Adverse economic and political events in Europe may
cause the Fund’s investments to decline in value. The economies and markets of
European countries are often closely connected and interdependent, and events in
one country in Europe can have an adverse impact on other European countries.
The Fund makes investments in securities of issuers that are domiciled in, or
have significant operations in, member countries of the European Union (the
“EU”) that are subject to economic and monetary controls that can adversely
affect the Fund’s investments. The European financial markets have experienced
volatility and adverse trends in recent years and these events have adversely
affected the exchange rate of the euro and may continue to significantly affect
other European countries. Decreasing imports or exports, changes in governmental
or EU regulations on trade, changes
in
the exchange rate of the euro, the default or threat of default by an EU member
country on its sovereign debt, and/or an economic recession in an EU member
country may have a significant adverse effect on the economies of EU member
countries and their trading partners, including some or all of the European
countries in which the Fund invests.
The
risks of investing in the United Kingdom (UK) have been heightened as a result
of Brexit, the formal steps taken by the United Kingdom to exit the EU, which
has resulted in increased volatility and triggered political, economic, and
legal uncertainty. Although the UK has formally left the EU, uncertainty remains
as to the long-term consequences of Brexit and issuers in the UK may experience
lower growth as a result.
◦Risks
Related to Investing in Japan. A significant portion of the
Fund’s assets may be invested in Japanese securities. To the extent the Fund
invests in Japanese securities, it will be subject to risks related to investing
in Japan. The Japanese economy may be subject to considerable degrees of
economic, political and social instability, which could have a negative impact
on Japanese securities. Since the year 2000, Japan’s economic growth rate has
remained relatively low and it may remain low in the future. In addition, Japan
is subject to the risk of natural disasters, such as earthquakes, volcanoes,
typhoons and tsunamis. Additionally, decreasing U.S. imports, new trade
regulations, changes in the U.S. dollar exchange rates, a recession in the
United States or continued increases in foreclosure rates may have an adverse
impact on the economy of Japan. Japan also has few natural resources, and any
fluctuation or shortage in the commodity markets could have a negative impact on
Japanese securities.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Consumer
Discretionary Sector Risk.
The
Fund may invest in companies in the consumer discretionary sector, and therefore
the performance of the Fund could be negatively impacted by events affecting
this sector.
The
success of consumer product manufacturers and retailers is tied closely to the
performance of domestic and international economies, interest rates, exchange
rates, competition, consumer confidence, changes in demographics and consumer
preferences. Companies in the consumer discretionary sector depend heavily on
disposable household income and consumer spending, and may be strongly affected
by social trends and marketing campaigns. These companies may be subject to
severe competition, which may have an adverse impact on their
profitability.
◦Industrials
Sector Risk.
The Fund may invest in companies in the industrials sector, and therefore the
performance of the Fund could be negatively impacted by events affecting this
sector. The industrials sector may be affected by changes in the supply of and
demand for products and services, product obsolescence, claims for environmental
damage or product liability and general economic conditions, among other
factors.
◦Materials
Sector Risk. The
Fund may invest in companies in the materials sector, and therefore the
performance of the Fund could be negatively impacted by events affecting this
sector. Many companies in this sector are significantly affected by the level
and volatility of commodity prices, the exchange value of the dollar, import
controls, and worldwide competition. At times, worldwide production of
industrial materials has exceeded demand as a result of over-building or
economic downturns, leading to poor investment returns or losses. This sector
may also be affected by economic cycles, interest rates, resource availability,
technical progress, labor relations, and government
regulations.
▪Style
Risk. The
Fund’s emphasis on dividend-paying stocks involves the risk that such stocks may
fall out of favor with investors and underperform the market. Also, a company
may reduce or eliminate its dividend, which may have a negative impact on the
Fund’s performance.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Index is based on securities’ closing
prices on local foreign markets (i.e., the value of the Index is not based on fair value prices), the
Fund’s ability to track the Index may be adversely affected.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year, and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 0.16%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 24.37% (quarter ended December 31, 2020)
and the Fund’s lowest return for a
calendar quarter was -28.31% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
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|
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|
|
|
|
|
| |
| 1
Year |
5
Years |
Since
Inception
(6/16/17) |
Pacer
Developed Markets International Cash Cows 100 ETF |
|
| |
Return
Before Taxes |
18.64% |
8.94% |
6.69% |
Return
After Taxes on Distributions |
17.99% |
8.37% |
6.18% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
12.09% |
7.26% |
5.45% |
Pacer
Developed Markets International Cash Cows 100 Index
(reflects no deduction for
fees, expenses, or taxes) |
20.15% |
9.98% |
7.67% |
FTSE
Developed ex-US Index (reflects no deduction for
fees, expenses, or taxes) |
19.03% |
9.20% |
6.21% |
MSCI
EAFE Value Index
(reflects no deduction for
fees, expenses, or taxes) |
18.95% |
7.08% |
4.23% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Emerging Markets Cash Cows 100 ETF |
Investment
Objective
The
Pacer
Emerging Markets Cash Cows 100 ETF (the “Fund”) is an exchange
traded fund (“ETF”) that seeks to track the total return performance, before
fees and expenses, of the Pacer Emerging Markets Cash Cows 100 Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.70% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
| |
Total
Annual Fund Operating Expenses |
0.70% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
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|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$72 |
$224 |
$390 |
$871 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
73% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed by Index Design Group,
an affiliate of Pacer Advisors, Inc., the Fund’s investment adviser (the
“Adviser”).
The
Index
The
Index uses an objective, rules-based methodology to provide exposure to large
and mid-capitalization companies in emerging markets with high free cash flow
yields. Companies with high free cash flow yields are commonly referred to as
“cash cows.”
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| |
The
initial index universe is derived from the component companies of the FTSE
Emerging Markets Index. The Fund defines emerging markets countries as
those countries included in the FTSE Emerging Markets Index. As of June
30, 2024, the Index had significant exposure to companies in China. The
initial universe of companies is screened based on their average projected
free cash flows and earnings (if available) over each of the next two
fiscal years. Companies with no forward year estimates available for free
cash flows or earnings will remain in the Index universe. Companies with
negative average projected free cash flows or earnings are removed from
the Index universe. Additionally, financial companies, other than real
estate investment trusts (“REITs”), companies with a market capitalization
of less than $2 billion, and companies whose average daily trading value
(“ADTV”) for the prior 90 days does not exceed $5 million are excluded
from the Index universe. |
|
Free
Cash Flow (FCF):
A company’s cash flow from operations minus capital
expenditures.
Enterprise
Value (EV):
A company’s market capitalization plus its debt and minus its cash and
cash equivalents.
Free
Cash Flow Yield: FCF/EV |
The
remaining companies are ranked by their free cash flow yield for the trailing
twelve-month period. The equity securities of the 100 companies with the highest
free cash flow yield (the “Top 100 Companies”) are included in the Index,
subject to the exceptions described below.
At
the time of each rebalance of the Index, the companies included in the Index are
weighted in proportion to their trailing twelve-month free cash flow, and
weightings are capped at 2% of the weight of the Index for any individual
company. Additionally, the Index is limited to a maximum of twenty companies
from any individual country and any sector. As of June 30, 2024, the Index did
not have significant exposure to companies in any sector. If the Top 100
Companies include more than 20 companies from an individual country or sector
(the “Exposure Limit”), the Index will exclude the companies with the lowest
free cash flow yield from each country and/or sector needed to meet the Exposure
Limit and will include companies outside the Top 100 Companies based on their
free cash flow yield until the Index includes 100 companies and satisfies the
Exposure Limit. As of June 30, 2024, the companies included in the Index had a
market capitalization of $954 million to $211 billion. The Index is
reconstituted and rebalanced semi-annually as of the close of business on the
third Friday of June and December based on data as of the first Friday
of the applicable rebalance month.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index and investments that have economic characteristics that
are substantially identical to the economic characteristics of such component
securities (e.g., depositary receipts). The Adviser expects that,
over time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index, but may, when the Adviser believes it is in the best interests of the
Fund, use a “representative sampling” strategy, meaning it may invest in a
sample of the securities in the Index whose risk, return and other
characteristics closely resemble the risk, return and other characteristics of
the Index as a whole.
The
Fund may also invest up to 20% of its assets in cash and cash equivalents, other
investment companies, as well as securities and other instruments not included
in the Index but which the Adviser believes will help the Fund track the
Index.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources
of information will provide an accurate assessment of included components or a
correct valuation of securities, nor can they guarantee the availability or
timeliness of the production of the Index.
▪Concentration
Risk.
If the Index concentrates in an industry or group of industries, the Fund’s
investments may be concentrated accordingly. In such event, the value of the
Fund’s shares may rise and fall more than the value of shares of a fund that
invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
▪Currency
Exchange Rate Risk. The
Fund’s assets may include exposure to investments denominated in non-U.S.
currencies or in securities or other assets that provide exposure to such
currencies. Changes in currency exchange rates and the relative value of
non-U.S. currencies will affect the value of the Fund’s investment and the value
of your Fund shares. Currency exchange rates can be very volatile and can change
quickly and unpredictably. As a result, the value of an investment in the Fund
may change quickly and without warning and you may lose
money.
▪Emerging
Markets Risk. The
Fund may invest in companies organized in emerging market nations. Investments
in securities and instruments traded in developing or emerging markets, or that
provide exposure to such securities or markets, can involve additional risks
relating to political, economic, or regulatory conditions not associated with
investments in U.S. securities and instruments or investments in more developed
international markets. Such conditions may impact the ability of the Fund to
buy, sell or otherwise transfer securities, adversely affect the trading market
and price for Shares and cause the Fund to decline in
value.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Cash
Redemption Risk. The
Fund’s investment strategy may require it to redeem Shares for cash or to
otherwise include cash as part of its redemption proceeds. The Fund may be
required to sell or unwind portfolio investments to obtain the cash needed to
distribute redemption proceeds. This may cause the Fund to recognize a capital
gain that it might not have recognized if it had made a redemption in-kind. As a
result, the Fund may pay out higher annual capital gain distributions than if
the in-kind redemption process was used. ETF shares can only be redeemed in
creation units by APs. Individual shareholders may only purchase and sell ETF
shares on a secondary market.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium)
or
less than the NAV intra-day (discount). This risk is heightened in times of
market volatility, periods of steep market declines, and periods when there is
limited trading activity for shares in the secondary market, in which case such
premiums or discounts may be significant. Because securities held by the Fund
trade on foreign exchanges that are closed when the Fund’s primary listing
exchange is open, the Fund is likely to experience premiums and discounts
greater than those of domestic
ETFs.
◦Trading. Although shares of the Fund are listed
for trading on a national securities exchange, such as The Nasdaq Stock Market
LLC (the “Exchange”), and may be traded on U.S. exchanges other than the
Exchange, there can be no assurance that shares of the Fund will trade with any
volume, or at all, on any stock exchange. In stressed market conditions, the
liquidity of shares of the Fund may begin to mirror the liquidity of the Fund’s
underlying portfolio holdings, which can be significantly less liquid than
shares of the Fund, and this could lead to differences between the market price
of the shares of the Fund and the underlying value of those
shares.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪Geographic
Concentration Risk. To
the extent the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or region. Because the
Index is a subset of the FTSE Emerging Markets Index, the geographic
concentrations of the Index, and consequently the Fund, may be different than
those of the broader FTSE Emerging Markets
Index.
◦Risks
Related to Investing in Brazil. Investments
in securities of Brazilian companies are subject to regulatory and economic
interventions that the Brazilian government has frequently exercised in the
past, including the setting of wage and price controls, blocking access to bank
accounts, imposing exchange controls and limiting imports. Investments are also
subject to certain restrictions on foreign investment as provided by Brazilian
law. The Brazilian economy has historically been subject to high rates of
inflation and a high level of debt, all of which may stifle economic growth.
Despite rapid development in recent years, Brazil still suffers from high levels
of corruption, crime and income disparity. There is the possibility that such
conditions may lead to social unrest and political upheaval in the future, which
may have adverse effects on the Fund’s investments.
◦Risks
Related to Investing China. Investing
in securities of Chinese companies involves additional risks, including, but not
limited to: the economy of China differs, often unfavorably, from the U.S.
economy in such respects as structure, general development, government
involvement, wealth distribution, rate of inflation, growth rate, allocation of
resources and capital reinvestment, among others; the central government has
historically exercised substantial control over virtually every sector of the
Chinese economy through administrative regulation and/or state ownership; and
actions of the Chinese central and local government authorities continue to have
a substantial effect on economic conditions in China. In addition, previously
the Chinese government has from time to time taken actions that influence the
prices at which certain goods may be sold, encourage companies to invest or
concentrate in particular industries, induce mergers between companies in
certain industries and induce private companies to publicly offer their
securities to increase or continue the rate of economic growth, control the rate
of inflation or otherwise regulate economic
expansion.
◦Risks
Related to Investing in Russia. Investing
in Russian securities involves significant risks, including legal, regulatory
and economic risks that are specific to Russia. In addition, investing in
Russian securities involves risks associated with the settlement of portfolio
transactions and loss of the Fund’s ownership rights in its portfolio securities
as a result of the system of share registration and custody in Russia. Russia’s
large-scale invasion of Ukraine on February 24, 2022 has led to various
countries imposing economic sanctions on certain Russian individuals and Russian
corporate and banking entities. A number of jurisdictions have also instituted
broader sanctions on Russia. Further, as of the date of this Prospectus, the
Russian securities markets effectively have not been open for trading by foreign
investors since February 28, 2022. Russia’s military incursion and resulting
sanctions could have a severe adverse effect on both regional and global
economies, which in turn could
affect
the value of the Fund’s investments. Due to Russian foreign exchange
restrictions, the Fund’s investments in Russian securities are not actively
trading and are currently valued at $0.
◦Risks
Related to Investing in Taiwan. Taiwan’s
geographic proximity and history of political contention with China have
resulted in ongoing tensions between the two countries. These tensions may
materially affect the Taiwanese economy and its securities market. Taiwan’s
economy is export-oriented, so it depends on an open world trade regime and
remains vulnerable to fluctuations in the world economy. Rising labor costs and
increasing environmental consciousness have led some labor-intensive industries
to relocate to countries with cheaper work forces, and continued labor
outsourcing may adversely affect the Taiwanese economy. Taiwan is also subject
to the risk of natural disasters, such as typhoons and tsunamis, which could
negatively affect the Fund.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪Large-Capitalization
Investing Risk. The Fund may invest in the securities of large-capitalization
companies. As a result, the Fund’s performance may be adversely affected if
securities of large-capitalization companies underperform securities of
smaller-capitalization companies or the market as a whole. The securities of
large-capitalization companies may be relatively mature compared to smaller
companies and therefore subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Other
Investment Companies Risk. The Fund will incur higher and duplicative expenses when it invests
in other investment companies such as ETFs. There is also the risk that the Fund
may suffer losses due to the investment practices of the underlying funds. When
the Fund invests in other investment companies, the Fund will be subject to
substantially the same risks as those associated with the direct ownership of
securities held by such investment companies. Investments in ETFs are also
subject to the “ETF Risks” described above.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
▪Small-Capitalization
Investing Risk. The
securities of small-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of larger
capitalization companies. The securities of small-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than larger capitalization stocks or the stock
market as a whole. There is typically less publicly available information
concerning smaller capitalization companies than for larger, more established
companies.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which
they
are represented in the Index. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Index is based on securities’ closing
prices on local foreign markets (i.e., the value of the Index is not based on fair value prices), the
Fund’s ability to track the Index may be adversely affected.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 4.43%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 19.68% (quarter ended December 31, 2020)
and the Fund’s lowest return for a
calendar quarter was -31.97% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
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| 1
Year |
Since
Inception
(5/2/2019) |
Pacer
Emerging Markets Cash Cows 100 ETF |
| |
Return
Before Taxes |
15.90% |
1.62% |
Return
After Taxes on Distributions |
14.93% |
0.37% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
10.95% |
1.40% |
Pacer
Emerging Markets Cash Cows 100 Index
(reflects no deduction for
fees, expenses, or taxes) |
18.75% |
3.88% |
FTSE
Emerging Markets Index
(reflects no deduction for
fees, expenses, or taxes) |
8.64% |
2.03% |
MSCI
Emerging Markets Value Index
(reflects no deduction for
fees, expenses, or taxes) |
14.21% |
1.74% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
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Pacer
US Large Cap Cash Cows Growth Leaders
ETF |
Investment
Objective
The Pacer US Large Cap Cash Cows Growth Leaders
ETF (the “Fund”) is an exchange traded fund (“ETF”) that seeks
to track the performance, before fees and expenses, of the Pacer US Large Cap
Cash Cows Growth Leaders Index (the “Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.49% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.49% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
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|
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1 Year |
3
Years |
5
Years |
10
Years |
$50 |
$157 |
$274 |
$616 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the portfolio turnover rate for the
Fund was 111% of the average value of its
portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
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The
Index uses a rules-based methodology that seeks to provide exposure to
large-capitalization U.S. companies with above average free cash flow
margins. Companies with above average free cash flow margins are commonly
referred to as “cash cows.”
The
initial Index universe is typically derived from the component companies
of the Russell 1000 Index®.
The initial universe of companies is typically screened based on their
average projected free cash flows and earnings (if available) over each of
the next two fiscal years. Companies for which information on their
projected free cash flows or earnings is not available will typically
remain in the Index universe. A company’s projected free cash flows and
earnings are typically determined by the Index Provider. Companies with
negative average projected free cash flows or earnings are typically
removed from the Index universe. Additionally, companies in the financial
or real estate sectors are typically excluded from the Index
universe. |
Free
Cash Flow (FCF): A
company’s cash flow from operations minus capital
expenditures.
Sales:
The
value of what a company sold to its customers during a given period; also
known as revenue.
Free
Cash Flow Margin:
FCF / Sales |
The
remaining companies are typically ranked by their free cash flow margin (defined
as a company’s free cash flow divided by sales) for the trailing twelve month
period. The equity securities of the 100 companies with the highest free cash
flow margin are typically included in the Index. Companies included in the Index
are typically weighted by their price momentum score and a company’s price
momentum score is typically calculated on each of the reconstitution dates.
The
weight of any individual company included in the Index is typically capped at
5%. Weight above the 5% limitation is typically redistributed among the other
Index constituents in proportion to their weights. As of June 30 2024, the
companies included in the Index had a market capitalization of $1 billion to
$3.3 trillion. As of June 30, 2024 the Index had significant exposure to the
information technology sector. The Index is typically reconstituted and
rebalanced quarterly as of the close of business on the third Friday of March,
June, September, and December based on data as of the first Friday of the
applicable rebalance month.
The
Fund’s Investment Strategy
Under
normal circumstances, the Fund will seek to invest at least 80% of its net
assets, plus the amount of any borrowings for investment purposes, in securities
of large-capitalization companies (“large cap”) that are principally traded in
the United States. The Fund considers a company to be a
large-capitalization at the time of purchase if it was included in the Russell
1000 Index at any time within the prior 12 months. The Adviser expects that,
over time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the Index.
The Fund is considered to be non-diversified, which means that it
may invest more of its assets in the securities of a single issuer or a smaller
number of issuers than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
•Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
•Concentration
Risk. If the Index concentrates in an industry or group of industries,
the Fund’s investments may be concentrated accordingly. In such event, the value
of the Fund’s shares may rise and fall more than the value of shares of a fund
that invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
•Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
•ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of
the
Fund may trade at a material discount to NAV and possibly face delisting:
(i) APs exit the business or otherwise become unable to process creation
and/or redemption orders and no other APs step forward to perform these
services, or (ii) market makers and/or liquidity providers exit the
business or significantly reduce their business activities and no other entities
step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading. Although shares of the Fund are listed
for trading on a national securities exchange, such as The Nasdaq Stock Market
LLC (the “Exchange”), and may be traded on U.S. exchanges other than the
Exchange, there can be no assurance that shares of the Fund will trade with any
volume, or at all, on any stock exchange. In stressed market conditions, the
liquidity of shares of the Fund may begin to mirror the liquidity of the Fund’s
underlying portfolio holdings, which can be significantly less liquid than
shares of the Fund, and this could lead to differences between the market price
of the shares of the Fund and the underlying value of those
shares.
•Large-Capitalization
Investing Risk. The Fund may invest in the securities of large-capitalization
companies. As a result, the Fund’s performance may be adversely affected if
securities of large-capitalization companies underperform securities of
smaller-capitalization companies or the market as a whole. The securities of
large-capitalization companies may be relatively mature compared to smaller
companies and therefore subject to slower growth during times of economic
expansion.
•Limited
Operating History. The Fund is a recently organized management investment company with
limited operating history. As a result, prospective investors have a limited
track record on which to base their investment decision. An investment in the
Fund may therefore involve greater uncertainty than an investment in a fund with
a more established record of performance.
•Non-Diversification
Risk. Although
the Fund intends to invest in a variety of securities and instruments, the Fund
is considered to be non-diversified, which means that it may invest more of its
assets in the securities of a single issuer or a smaller number of issuers than
if it were a diversified fund. As a result, the Fund may be more exposed to the
risks associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may
increase the Fund’s volatility and cause the performance of a relatively smaller
number of issuers to have a greater impact on the Fund’s
performance.
•Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
•Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Information
Technology Sector Risk. Market or economic factors impacting
information technology companies and companies that rely heavily on
technological advances could have a significant effect on the value of the
Fund’s investments. The value of stocks of information technology companies and
companies that rely heavily on technology is particularly vulnerable to rapid
changes in technology product cycles, rapid product obsolescence, government
regulation and competition, both domestically and internationally, including
competition from foreign competitors with lower production costs. Stocks of
information technology companies and companies that rely heavily on technology,
especially those of smaller, less-seasoned companies, tend to be more volatile
than the overall market. Information technology companies are heavily dependent
on patent and intellectual property rights, the loss or impairment of which may
adversely affect profitability.
•Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 14.07%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 11.70% (quarter ended December 31, 2023)
and the Fund’s lowest return for a
calendar quarter was -0.47% (quarter ended September 30,
2023).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
| |
| 1
Year |
Since
Inception
(12/21/22) |
Pacer
US Large Cap Cash Cows Growth Leaders ETF |
| |
Return
Before Taxes |
20.57% |
17.12% |
Return
After Taxes on Distributions |
20.42% |
16.98% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
12.27% |
13.04% |
Pacer US Large Cap Cash Cows Growth Leaders Index
TR
(reflects no deduction for
fees, expenses, or
taxes) |
21.10% |
17.63% |
Russell
1000 Growth Index
(reflects no deduction for
fees, expenses, or taxes) |
42.68% |
38.69% |
Russell
1000 Index
(reflects no deduction for
fees, expenses, or taxes) |
26.53% |
24.56% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to
recommend
the Fund over another investment. Ask your salesperson or visit your financial
intermediary’s website for more information.
|
| |
Pacer
US Small Cap Cash Cows Growth Leaders
ETF |
Investment
Objective
The
Pacer US
Small Cap Cash Cows Growth Leaders ETF (the “Fund”) is an
exchange traded fund (“ETF”) that seeks to track the performance, before fees
and expenses, of the Pacer US Small Cap Cash Cows Growth Leaders Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.59% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.59% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$60 |
$189 |
$329 |
$738 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
152% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
|
|
|
|
|
|
|
| |
The
Index uses a rules-based methodology that seeks to provide exposure to
small-capitalization U.S. companies with above average free cash flow
margins. Companies with above average free cash flow margins are commonly
referred to as “cash cows.” The Fund considers a company to be a
small-capitalization at the time of purchase if it was included in the
S&P SmallCap 600®
Index (the “S&P SmallCap 600”) at any time within the prior six
months.
The
initial Index universe is derived from the component companies of the
S&P SmallCap 600. The initial universe of companies is screened based
on their average projected free cash flows and earnings (if available)
over each of the next two fiscal years. Companies for which information on
their projected free cash flows or earnings is not available will remain
in the Index universe. A company’s projected free cash flows and earnings
are determined by the Index Provider. Companies with negative average
projected free cash flows or earnings are removed from the Index universe.
Additionally, companies in the financial or real estate sectors are
excluded from the Index universe. |
|
Free
Cash Flow (FCF): A
company’s cash flow from operations minus capital
expenditures.
Sales:
The
value of what a company sold to its customers during a given period; also
known as revenue.
Free
Cash Flow Margin:
FCF / Sales |
The
remaining companies are ranked by their free cash flow margin (defined as a
company’s free cash flow divided by sales) for the trailing twelve month period.
The equity securities of the 100 companies with the highest free cash flow
margin are included in the Index. Companies included in the Index are weighted
by their price momentum score and a company’s price momentum score is calculated
on each of the reconstitution dates. The effect of the price momentum score is
to overweight companies with relative positive price momentum, while
underweighting companies with relative negative price momentum over a period of
approximately the prior six months.
The
weight of any individual company included in the Index is capped at 5%. Weight
above the 5% limitation is redistributed among the other Index constituents in
proportion to their weights. As of June 30, 2024, the companies included in the
Index had a market capitalization of $491 million to $8.1 billion. As of June
30, 2024, the Index had significant exposure to the health care, information
technology and industrials sectors. The Index is reconstituted and rebalanced
quarterly as of the close of business on the third Friday of March, June,
September, and December based on data as of the first Friday of the applicable
rebalance month.
The
Fund’s Investment Strategy
Under
normal circumstances, the Fund will seek to invest at least 80% of its net
assets, plus the amount of any borrowings for investment purposes, in securities
of small-capitalization companies (“small cap”) that are principally traded in
the United States. The Adviser expects that, over time, the
correlation between the Fund’s performance and that of the Index, before fees
and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the Index.
The
Fund is considered to be non-diversified, which means that it may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Fund.” The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
•Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser (as defined below) can offer assurances that the Index’s
calculation methodology or sources of information will provide an accurate
assessment of included components or a correct valuation of securities, nor can
they guarantee the availability or timeliness of the production of the
Index.
•Concentration
Risk.
If the Index concentrates in an industry or group of industries, the Fund’s
investments may be concentrated accordingly. In such event, the value of the
Fund’s shares may rise and fall more than the value of shares of a fund that
invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
•Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
•ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as the Nasdaq Stock Market LLC (the “Exchange”), and may be
traded on U.S. exchanges other than the Exchange, there can be no assurance that
shares of the Fund will trade with any volume, or at all, on any stock exchange.
In stressed market conditions, the liquidity of shares of the Fund may begin to
mirror the liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
•Growth
Stock Risk.
The stocks of growth companies can be more sensitive to the company’s earnings
and more volatile than the market in general.
•Limited
Operating History.
The Fund is a recently organized management investment company with limited
operating history. As a result, prospective investors have a limited track
record on which to base their investment decision. An investment in the Fund may
therefore involve greater uncertainty than an investment in a fund with a more
established record of performance.
•Non-Diversification
Risk. Although
the Fund intends to invest in a variety of securities and instruments, the Fund
is considered to be non-diversified, which means that it may invest more of its
assets in the securities of a single issuer or a smaller number of issuers than
if it were a diversified fund. As a result, the Fund may be more exposed to the
risks associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may
increase the Fund’s volatility and cause the performance of a relatively smaller
number of issuers to have a greater impact on the Fund’s
performance.
•Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
•Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Health
Care Sector Risk.
Companies in the health care sector are subject to extensive government
regulation and their profitability can be significantly affected by restrictions
on government reimbursement for medical expenses, rising costs of medical
products and services, pricing pressure (including price discounting), limited
product lines and an increased emphasis on the delivery of healthcare through
outpatient services.
◦Industrials
Sector Risk.
The Fund may invest in companies in the industrials sector, and therefore the
performance of the Fund could be negatively impacted by events affecting this
sector. The industrials sector may be affected by changes in the supply of and
demand for products and services, product obsolescence, claims for environmental
damage or product liability and general economic conditions, among other
factors.
◦Information
Technology Sector Risk.
Market or economic factors impacting information technology companies and
companies that rely heavily on technological advances could have a significant
effect on the value of the Fund’s investments. The value of stocks of
information technology companies and companies that rely heavily on technology
is particularly vulnerable to rapid changes in technology product cycles, rapid
product obsolescence, government regulation and competition, both domestically
and internationally, including competition from foreign competitors with lower
production costs. Stocks of information technology companies and companies that
rely heavily on technology, especially those of smaller, less-seasoned
companies, tend to be more volatile than the overall market. Information
technology companies are heavily dependent on patent and intellectual property
rights, the loss or impairment of which may adversely affect
profitability.
•Small-Capitalization
Companies Risk. The
equity securities of small-capitalization companies have historically been
subject to greater investment risk than securities of larger companies. The
prices of equity securities of small-capitalization companies tend to be more
volatile and less liquid than the prices of equity securities of larger
companies.
•Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
Fund
Performance
Performance
information for the Fund is not included because the Fund had not yet been in
operation one full calendar year as of the date of this
Prospectus. In the future, performance for the Fund will be
presented in this section. Updated performance information will be available on
the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-877-337-0500.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
Bruce
Kavanaugh, Vice President of the Adviser, and Danke Wang, CFA, Portfolio Manager
for the Adviser, are jointly and primarily responsible for the day-to-day
management of the Fund and have served as portfolio managers since the Fund’s
inception.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
US Cash Cows Growth ETF |
Investment
Objective
The
Pacer US
Cash Cows Growth ETF (the “Fund”) is an exchange traded fund
(“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer US Cash Cows Growth Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses (expenses
that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
123% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group, an affiliate of Pacer Advisors, Inc., the Fund’s investment
adviser (the “Adviser”).
The
Index
The
Index uses an objective, rules-based methodology to provide exposure to mid- and
large-capitalization U.S. companies with high free cash flow yields. Companies
with high free cash flow yields are commonly referred to as “cash
cows”.
|
|
|
|
|
|
|
| |
The
initial Index universe is derived from the component companies of the
S&P 900®
Pure Growth Index. The initial universe of companies is screened based on
their average projected free cash flows and earnings (if available) over
each of the next two fiscal years. Companies for which information on
their projected free cash flows or earnings is not available will remain
in the Index universe. Companies with negative average projected free cash
flows or earnings are removed from the Index universe. Additionally,
financial companies, other than real estate investment trusts (“REITs”),
are excluded from the Index universe. |
|
Free
Cash Flow (FCF): A
company’s cash flow from operations minus capital
expenditures.
Enterprise
Value (EV): A
company’s market capitalization plus its debt and minus its cash and cash
equivalents.
Free
Cash Flow Yield:
FCF / EV |
The
remaining companies are ranked by their free cash flow yield for the trailing
twelve month period. The equity securities of the 50 companies with the highest
free cash flow yield are included in the Index. As of June 30, 2024, the Index
had significant exposure to companies in the energy sector.
At
the time of each rebalance of the Index, the companies included in the Index are
weighted in proportion to their current market capitalization, and weightings
are capped at 5% of the weight of the Index for any individual company. Weight
above the 5% limitation is redistributed among the other Index constituents in
proportion to their weights. As of June 30, 2024, the Index had a market
capitalization range of $2.6 billion to $1.3 trillion. The Index is
reconstituted and rebalanced quarterly as of the close of business on the
3nd
Friday of March, June, September, and December based on data as of the
2nd
Friday of the applicable rebalance month.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index. The Adviser expects that, over time,
the correlation between the Fund’s performance and that of the Index, before
fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the Index.
The
Fund is considered to be non-diversified, which means that it may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
Risk.
If the Index concentrates in an industry or group of industries, the Fund’s
investments may be concentrated accordingly. In such event, the value of the
Fund’s shares may rise and fall more than the value of shares of a fund that
invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform
these services, or (ii) market makers and/or liquidity providers exit the
business or significantly reduce their business activities and no other entities
step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading. Although shares of the Fund are listed
for trading on a national securities exchange, such as NYSE Arca, Inc. (the
“Exchange”), and may be traded on U.S. exchanges other than the Exchange, there
can be no assurance that shares of the Fund will trade with any volume, or at
all, on any stock exchange. In stressed market conditions, the liquidity of
shares of the Fund may begin to mirror the liquidity of the Fund’s underlying
portfolio holdings, which can be significantly less liquid than shares of the
Fund, and this could lead to differences between the market price of the shares
of the Fund and the underlying value of those
shares.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Non-Diversification
Risk. Although the Fund intends to invest in a variety of securities and
instruments, the Fund is considered to be non-diversified, which means that it
may invest more of its assets in the securities of a single issuer or a smaller
number of issuers than if it were a diversified fund. As a result, the Fund may
be more exposed to the risks associated with and developments affecting an
individual issuer or a smaller number of issuers than a fund that invests more
widely. This may increase the Fund’s volatility and cause the performance of a
relatively smaller number of issuers to have a greater impact on the Fund’s
performance.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Consumer
Discretionary Sector Risk.
The
Fund may invest in companies in the consumer discretionary sector, and therefore
the performance of the Fund could be negatively impacted by events affecting
this sector.
The
success of consumer product manufacturers and retailers is tied closely to the
performance of domestic and international economies, interest rates, exchange
rates, competition, consumer confidence, changes in demographics and consumer
preferences. Companies in the consumer discretionary sector depend heavily on
disposable household income and consumer spending, and may be strongly affected
by social trends and marketing campaigns. These companies may be subject to
severe competition, which may have an adverse impact on their
profitability.
◦Energy
Sector Risk. The Fund may invest in companies in the energy sector, and
therefore the performance of the Fund could be negatively impacted by events
affecting this sector. The profitability of companies in the energy sector
is related to worldwide energy prices, exploration, and production spending. The
value of securities issued by companies in the energy sector may decline for
many reasons, including, among others, changes in energy prices, government
regulations, energy conservation efforts, natural disasters, and potential civil
liabilities. Such companies are also subject to risks changes in economic
conditions, as well as market and political risks of the countries where energy
companies are located or do business.
◦Health
Care Sector Risk.
The Fund may invest in companies in the health care sector, and therefore the
performance of the Fund could be negatively impacted by events affecting this
sector. Companies in the health care sector are subject to extensive government
regulation and their profitability can be significantly affected by restrictions
on government reimbursement for medical expenses, rising costs of medical
products and services, pricing pressure (including price discounting), limited
product lines and an increased emphasis on the delivery of healthcare through
outpatient services.
◦Industrials
Sector Risk.
The Fund may invest in companies in the industrials sector, and therefore the
performance of the Fund could be negatively impacted by events affecting this
sector. The industrials sector may be affected by changes in the supply of and
demand for products and services, product obsolescence, claims for environmental
damage or product liability and general economic conditions, among other
factors.
◦Information
Technology Sector Risk.The
Fund may invest in companies in the information technology sector, and therefore
the performance of the Fund could be negatively impacted by events affecting
this sector. Market or economic factors impacting information technology
companies and companies that rely heavily on technological advances could have a
significant effect on the value of the Fund’s investments. The value of stocks
of information technology companies and companies that rely heavily on
technology is particularly vulnerable to rapid changes in technology product
cycles, rapid product obsolescence, government regulation and competition, both
domestically and internationally, including competition from foreign competitors
with lower production costs. Stocks of information technology companies and
companies that rely heavily on technology, especially those of smaller,
less-seasoned companies, tend to be more volatile than the overall market.
Information technology companies are heavily dependent on patent and
intellectual property rights, the loss or impairment of which may adversely
affect profitability.
▪Style
Risk. The
Fund’s emphasis on dividend-paying stocks involves the risk that such stocks may
fall out of favor with investors and underperform the market. Also, a company
may reduce or eliminate its dividend, which may have a negative impact on the
Fund’s performance.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 17.53%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 31.88% (quarter ended June 30, 2020) and
the Fund’s lowest return for a
calendar quarter was -23.98% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
| |
| 1
Year |
Since
Inception
(5/2/2019) |
Pacer
US Cash Cows Growth ETF |
| |
Return
Before Taxes |
3.06% |
9.63% |
Return
After Taxes on Distributions |
2.52% |
9.37% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
2.16% |
7.57% |
Pacer
US Cash Cows Growth Index
(reflects no deduction for
fees, expenses, or taxes) |
2.79% |
9.73% |
S&P
900 Pure Growth Index
(reflects no deduction for
fees, expenses, or taxes) |
12.59% |
8.33% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Cash Cows Fund of Funds ETF |
Investment
Objective
The
Pacer
Cash Cows Fund of Funds ETF (the “Fund”) is an exchange traded
fund (“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer Cash Cows Fund of Funds Index (the “Index” or the “Fund
of Funds Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses (expenses
that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.15% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Acquired
Fund Fees and Expenses1 |
0.59% |
Total
Annual Fund Operating Expenses |
0.74% |
1
Acquired Fund Fees
and Expenses (“AFFE”) are the indirect costs of investing in other investment
companies. Total Annual Fund Operating Expenses do not correlate to the expense
ratios in the Fund’s Financial Highlights because the Financial Highlights
include only the direct operating expenses incurred by the Fund and exclude
AFFE.
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$76 |
$237 |
$411 |
$918 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
4% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group, an affiliate of Pacer Advisors, Inc., the Fund’s investment
adviser (the “Adviser”).
The
Index
The
Fund of Funds Index uses an objective, rules-based approach to construct a
portfolio that, as of each quarterly rebalance, is composed of the ETFs listed
in the following table, each advised by the Adviser (collectively, the “Cash
Cows ETFs”). Each of the Cash Cows ETFs is an index-based ETF that seeks to
track the total return performance, before fees and expenses, of the applicable
underlying index listed in the following table (collectively, the “Cash Cows
Indexes”). Each Cash Cows Index uses an objective, rules-based methodology to
provide exposure to companies with high free cash flow yields (commonly referred
to as “cash cows”) selected from the applicable “Equity Universe” as indicated
in the following table.
|
|
|
|
|
|
|
|
|
|
| |
Weight |
Cash
Cows ETF |
Cash
Cows Index |
Equity
Universe |
20% |
Pacer
US Cash Cows 100 ETF |
Pacer
US Cash Cows 100 Index |
Russell
1000 Index |
20% |
Pacer
Global Cash Cows Dividend ETF |
Pacer
Global Cash Cows Dividend Index |
FTSE
All-World Developed Large Cap Index |
20% |
Pacer
US Small Cap Cash Cows 100 ETF |
Pacer
US Small Cap Cash Cows Index |
S&P
Small Cap 600® Index |
20% |
Pacer
US Cash Cows Growth ETF |
Pacer
US Cash Cows Growth Index |
S&P
900®
Pure Growth Index |
20% |
Pacer
Developed Markets International Cash Cows 100 ETF |
Pacer
Developed Markets International Cash Cows 100 Index |
FTSE
Developed ex US Index |
The
Cash Cows Indexes
|
|
|
|
|
|
|
| |
Each
Cash Cows Index is derived from the component companies of the applicable
Equity Universe. The companies in the applicable Equity Universe are
screened based on their average projected free cash flows and earnings (if
available) over each of the next two fiscal years. Companies for which
information on their projected free cash flows or earnings is not
available remain eligible for inclusion in the applicable Cash Cows Index.
Companies with negative average projected free cash flows or earnings are
not eligible for inclusion in the applicable Cash Cows Index.
Additionally, financial companies, other than real estate investment
trusts (“REITs”), are not eligible for inclusion in the applicable Cash
Cows Index. For the Pacer Developed Markets International Cash Cows 100
ETF, companies with a market capitalization of less than $3 billion are
also excluded. |
|
Free
Cash Flow (FCF): A
company’s cash flow from operations minus capital
expenditures.
Enterprise
Value (EV): A
company’s market capitalization plus its debt and minus its cash and cash
equivalents.
Free
Cash Flow Yield:
FCF / EV |
For
each Cash Cows Index, the remaining eligible companies are ranked by their free
cash flow yield for the trailing twelve-month period. The equity securities of
the 100 applicable companies with the highest free cash flow yield are included
in the Pacer US Cash Cows 100 Index, Pacer Developed Markets International Cash
Cows 100 Index, and Pacer US Small Cap Cash Cows Index. The equity securities of
the 50 applicable companies with the highest free cash flow yield are included
in the Pacer US Cash Cows Growth Index. For the Pacer Global Cash Cows Dividend
Index, the equity securities of the 300 applicable companies with the highest
free cash flow yield are selected and then narrowed to the 100 companies with
the highest dividend yield.
Each
of the Pacer US Cash Cows Growth Index, Pacer US Cash Cows 100 Index, and Pacer
US Small Cap Cash Cows Index is rebalanced and reconstituted quarterly, and each
of the Pacer Developed Markets International Cash Cows 100 Index and Pacer
Global Cash Cows Dividend Index is rebalanced and reconstituted semi-annually.
At
the time of each rebalance and reconstitution, companies in the Pacer US Cash
Cows 100 Index, Pacer US Small Cap Cash Cows Index, and Pacer Developed Markets
International Cash Cows 100 Index are weighted in proportion to their trailing
twelve month free cash flow, companies in the Pacer Global Cash Cows Dividend
Index are weighted based on the aggregate amount of dividends distributed by
each company for the trailing twelve-month period, and companies in the Pacer US
Cash Cows Growth Index are market capitalization weighted. Companies in each
Cash Cows Index are limited at the time of each rebalance and reconstitution to
a maximum of 2% weight for any individual company (5% with respect to the Pacer
US Cash Cows Growth Index).
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in (i) the component
securities of the Fund of Funds Index (i.e., the Cash Cows ETFs) or (ii) the underlying holdings of one or more
Cash Cows ETFs in the same approximate weight as such holdings are assigned in
the applicable Cash Cows ETF, adjusted to reflect the weight of such Cash Cows
ETF in the Fund of Funds Index. The Adviser expects that, over
time, the correlation between the Fund’s performance and that of the Fund of
Funds Index, before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the
Index.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or
ability
to meet its objectives. For more information about the risks of investing in the
Fund, see the section in the Fund’s prospectus entitled “Additional Information
about the Principal Risks of Investing in the Funds.” The principal risks are
presented in alphabetical order to facilitate finding particular risks and
comparing them with other funds. Each risk summarized below is considered a
“principal risk” of investing in the Fund, regardless of the order in which it
appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Currency
Exchange Rate Risk. The Fund’s assets may include exposure to investments denominated in
non-U.S. currencies or in securities or other assets that provide exposure to
such currencies. Changes in currency exchange rates and the relative value of
non-U.S. currencies will affect the value of the Fund’s investment and the value
of your Fund shares. Currency exchange rates can be very volatile and can change
quickly and unpredictably. As a result, the value of an investment in the Fund
may change quickly and without warning and you may lose money.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as The Nasdaq Stock Market LLC (the “Exchange”), and may be
traded on U.S. exchanges other than the Exchange, there can be no assurance that
shares of the Fund will trade with any volume, or at all, on any stock exchange.
In stressed market conditions, the liquidity of shares of the Fund may begin to
mirror the liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Mid-
and Small-Capitalization Investing Risk. The
Fund may invest in the securities of mid- and small-capitalization companies. As
a result, the Fund’s performance may be adversely affected if securities of mid-
and small-capitalization companies underperform securities of other
capitalization ranges or the market as a whole. Securities of smaller companies
trade in smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Other
Investment Companies Risk.
The Fund primarily invests in other ETFs and will incur higher and duplicative
expenses as a result of such investments. There is also the risk that the Fund
may suffer losses due to the investment practices of the underlying funds. When
the Fund invests in other investment companies, the Fund will be subject to
substantially the same risks as those associated with the direct ownership of
securities held by such investment companies. Investments in ETFs are also
subject to the “ETF Risks” described above.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
▪Style
Risk. The
Fund’s emphasis on dividend-paying stocks involves the risk that such stocks may
fall out of favor with investors and underperform the market. Also, a company
may reduce or eliminate its dividend, which may have a negative impact on the
Fund’s performance.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Index is based on securities’ closing
prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 2.90%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 23.08% (quarter ended June 30, 2020) and
the Fund’s lowest return for a
calendar quarter was -28.87% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
| |
| 1
Year |
Since
Inception
(5/3/2019) |
Pacer
Cash Cows Fund of Funds ETF |
| |
Return
Before Taxes |
17.03% |
11.04% |
Return
After Taxes on Distributions |
16.26% |
10.45% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
10.55% |
8.70% |
Pacer
Cash Cows Fund of Funds Index
(reflects no deduction for
fees, expenses, or taxes) |
17.25% |
11.52% |
FTSE
All World Developed Index
(reflects no deduction for
fees, expenses, or taxes) |
23.60% |
9.95% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange
for a portfolio of securities (the “Deposit Securities”) and/or a designated
amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
US Export Leaders ETF |
Investment
Objective
The
Pacer US
Export Leaders ETF (the “Fund”) is an exchange traded fund
(“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer US Export Leaders Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
75% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
The
Index uses an objective, rules-based methodology to measure the performance of
an equal weight portfolio of approximately 100 large- and mid-capitalization
U.S. companies with a high percentage of foreign sales and high free cash flow
growth. Free cash flow is a company’s cash flow from operations minus its
capital expenditures.
Construction
of the Index begins with an initial universe of the 200 companies across the
S&P 900®
Index (which is comprised of the S&P 500®
Index (“S&P 500”) and S&P MidCap 400®
Index (“S&P MidCap 400”)) that have the highest annual foreign sales as a
percentage of total sales.
The
200 companies are then narrowed to the 100 companies with the highest change in
free cash flow growth over the past five years, and those 100 companies are
equally weighted to create the Index. As of June 30, 2024, the Index was made up
of 100 companies and included significant allocations to companies in the
information technology sector.
The
Index is reconstituted and rebalanced to equal-weight
quarterly.
From
time to time, the Index may include more or less than 100 companies as a result
of events such as acquisitions, spin-offs and other corporate
actions.
The
S&P 500 consists of approximately 500 leading U.S.-listed companies
representing approximately 80% of the U.S. equity market capitalization. The
S&P MidCap 400 measures the performance of mid-capitalization stocks in the
United States.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index. The Adviser expects that, over time,
the correlation between the Fund’s performance and that of the Index, before
fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the
Index.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
Risk.
If the Index concentrates in an industry or group of industries, the Fund’s
investments may be concentrated accordingly. In such event, the value of the
Fund’s shares may rise and fall more than the value of shares of a fund that
invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act
as APs. In addition, there may be a limited number of market makers and/or
liquidity providers in the marketplace. To the extent either of the following
events occur, shares of the Fund may trade at a material discount to NAV and
possibly face delisting: (i) APs exit the business or otherwise become
unable to process creation and/or redemption orders and no other APs step
forward to perform these services, or (ii) market makers and/or liquidity
providers exit the business or significantly reduce their business activities
and no other entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading. Although shares of the Fund are listed
for trading on a national securities exchange, such as NYSE Arca, Inc. (the
“Exchange”), and may be traded on U.S. exchanges other than the Exchange, there
can be no assurance that shares of the Fund will trade with any volume, or at
all, on any stock exchange. In stressed market conditions, the liquidity of
shares of the Fund may begin to mirror the liquidity of the Fund’s underlying
portfolio holdings, which can be significantly less liquid than shares of the
Fund, and this could lead to differences between the market price of the shares
of the Fund and the underlying value of those
shares.
▪Foreign
Sales Risk. The
Fund invests in companies that derive a significant portion of their sales to
non-U.S. customers. Consequently, investments in such companies may be
subject
to risk of loss due to unfavorable changes in currency exchange rates,
political, economic or social changes or instability in such non-U.S. countries,
events affecting the transportation, shipping or delivery of goods to such
customers, and changes in U.S. or foreign laws or regulations affecting
exports.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Information
Technology Sector Risk. Market
or economic factors impacting information technology companies and companies
that rely heavily on technological advances could have a significant effect on
the value of the Fund’s investments. The value of stocks of information
technology companies and companies that rely heavily on technology is
particularly vulnerable to rapid changes in technology product cycles, rapid
product obsolescence, government regulation and competition, both domestically
and internationally, including competition from foreign competitors with lower
production costs. Stocks of information technology companies and companies that
rely heavily on technology, especially those of smaller, less-seasoned
companies, tend to be more volatile than the
overall market. Information technology
companies are heavily dependent on patent and intellectual property rights, the
loss or impairment of which may adversely affect
profitability.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year, and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 7.45%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 26.73% (quarter ended June 30, 2020) and
the Fund’s lowest return for a
calendar quarter was -24.91% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
5
Years |
Since
Inception
(7/23/18) |
Pacer
US Export Leaders ETF |
|
| |
Return
Before Taxes |
24.50% |
17.54% |
12.33% |
Return
After Taxes on Distributions |
24.35% |
17.40% |
12.19% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
14.60% |
14.23% |
9.88% |
Pacer
US Export Leaders Index
(reflects no deduction for
fees, expenses, or taxes) |
25.25% |
18.27% |
13.03% |
S&P
900 IndexTM
(reflects no deduction for
fees, expenses, or taxes) |
25.70% |
15.50% |
11.90% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure representing “Return After
Taxes on Distributions and Sale of Fund Shares” may be higher than the other
return figures for the same period. A higher after-tax return results when a
capital loss occurs upon redemption and provides an assumed tax deduction that
benefits the
investor.
After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
International Export Leaders ETF |
Investment
Objective
The
Pacer
International Export Leaders ETF (the “Fund”) is an exchange
traded fund (“ETF”) that seeks to track the total return performance, before
fees and expenses, of the Pacer International Export Leaders Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses1 |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
1
Estimated for
the current fiscal year.
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
Because the Fund had not commenced operations as of the date of this Prospectus,
portfolio turnover information is not yet
available.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
The
Index uses an objective, rules-based methodology to measure the performance of
an equal weight portfolio of approximately 100 large- and mid-capitalization
non-U.S. companies with a high percentage of foreign sales and high free cash
flow growth. Free cash flow is a company’s cash flow from operations minus its
capital expenditures.
Construction
of the Index begins with an initial universe of the 200 companies included in
the FTSE Developed ex US Index that have the highest annual foreign sales as a
percentage of total sales.
The
200 companies are then narrowed to the 100 companies with the highest free cash
flow growth over the past five years, and those 100 companies are equally
weighted to create the Index.
The
Index is reconstituted and rebalanced to equal-weight
semi-annually.
From
time to time, the Index may include more or less than 100 companies as a result
of events such as acquisitions, spin-offs and other corporate
actions.
The
FTSE Developed ex US Index is a rules-based, float-adjusted, market
capitalization-weighted index comprised of large- and mid-capitalization stocks
providing coverage of the developed markets in twenty-four non-U.S. countries.
The FTSE Developed ex US Index is derived from the FTSE Global Equity Index
Series, which covers 98% of the world’s investable market
capitalization.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index and investments that have economic characteristics that
are substantially identical to the economic characteristics of such component
securities (e.g., depositary receipts). The Adviser expects that,
over time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the Index.
The
Fund will be considered to be non-diversified, which means that it may invest
more of its assets in the securities of a single issuer or a smaller number of
issuers than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
Risk.
If the Index concentrates in an industry or group of industries, the Fund’s
investments may be concentrated accordingly. In such event, the value of the
Fund’s shares may rise and fall more than the value of shares of a fund that
invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
▪Currency
Exchange Rate Risk. The
Fund’s assets may include investments denominated in non-U.S. currencies, such
as the euro, or in securities or other assets that provide exposure to such
currencies. Changes in currency exchange rates and the relative value of
non-U.S. currencies will affect the value of the Fund’s investment and the value
of your Fund shares. Currency exchange rates can be very volatile and can change
quickly and unpredictably. As a result, the value of an investment in the Fund
may change quickly and without warning and you may lose
money.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market
makers and/or liquidity providers in the marketplace. To the extent
either of the following events occur, shares of the Fund may trade at a material
discount to NAV and possibly face delisting: (i) APs exit the business or
otherwise become unable to process creation and/or redemption orders and no
other APs step forward to perform these services, or (ii) market makers
and/or liquidity providers exit the business or significantly reduce their
business activities and no other entities step forward to perform their
functions.
◦Costs
of Buying or Selling Shares of the Fund. Due to the costs of buying or selling shares of the Fund, including
brokerage commissions imposed by brokers and bid/ask spreads, frequent trading
of shares of the Fund may significantly reduce investment results and an
investment in shares of the Fund may not be advisable for investors who
anticipate regularly making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Because
securities held by the Fund trade on foreign exchanges that are closed when the
Fund’s primary listing exchange is open, the Fund is likely to experience
premiums and discounts greater than those of domestic
ETFs.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as Cboe BZX Exchange, Inc. (the “Exchange”), and may be
traded on U.S. exchanges other than the Exchange, there can be no assurance that
shares of the Fund will trade with any volume, or at all, on any stock exchange.
In stressed market conditions, the liquidity of shares of the Fund may begin to
mirror the liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪European
Investment Risk.
The Fund is more exposed to the economic and political risks of Europe and of
the European countries in which it invests than funds whose investments are more
geographically diversified. Adverse economic and political events in Europe may
cause the Fund’s investments to decline in value. The economies and markets of
European countries are often closely connected and interdependent, and events in
one country in Europe can have an adverse impact on other European countries.
The Fund makes investments in securities of issuers that are domiciled in, or
have significant operations in, member countries of the European Union (the
“EU”) that are subject to economic and monetary controls that can adversely
affect the Fund’s investments. The European financial markets have experienced
volatility and adverse trends in recent years and these events have adversely
affected the exchange rate of the euro and may continue to significantly affect
other European countries. Decreasing imports or exports, changes in governmental
or EU regulations on trade, changes in the exchange rate of the euro, the
default or threat of default by an EU member country on its sovereign debt,
and/or an economic recession in an EU member country may have a significant
adverse effect on the economies of EU member countries and their trading
partners, including some or all of the European countries in which the Fund
invests.
The
risks of investing in the United Kingdom (UK) have been heightened as a result
of Brexit, the formal steps taken by the United Kingdom to exit the EU, which
has resulted in increased volatility and triggered political, economic, and
legal uncertainty. Although the UK has formally left the EU, uncertainty remains
as to the long-term consequences of Brexit and issuers in the UK may experience
lower growth as a result.
▪Foreign
Sales Risk.
The
Fund invests in companies that derive a significant portion of their sales to
foreign customers. Consequently, investments in such companies may
be subject to risk of loss due to unfavorable changes in currency exchange
rates, political, economic or social changes or instability in such foreign
countries, events affecting the transportation, shipping or delivery of goods to
such customers, and changes in foreign laws or regulations affecting
exports.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to
foreign
currency fluctuations or to political or economic instability. Investments in
non-U.S. securities also may be subject to withholding or other taxes and may be
subject to additional trading, settlement, custodial, and operational risks.
These and other factors can make investments in the Fund more volatile and
potentially less liquid than other types of investments. Foreign securities held
by the Fund may trade on markets that are closed when U.S. markets are open,
which may lead to a difference in the value of the Fund and the underlying
foreign securities.
▪Geographic
Concentration Risk. To
the extent the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or region. The Index’s,
and therefore the Fund’s, heavy equity exposure to four countries (the United
Kingdom, France, Switzerland, and Germany) subjects the Fund to a higher degree
of country risk than that of more geographically diversified international
funds.
▪Large-Capitalization
Investing Risk. The Fund may invest in the securities of large-capitalization
companies. As a result, the Fund’s performance may be adversely affected if
securities of large-capitalization companies underperform securities of
smaller-capitalization companies or the market as a whole. The securities of
large-capitalization companies may be relatively mature compared to smaller
companies and therefore subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪New
Fund Risk. The
Fund is new with no operating history. As a result, there can be no assurance
that the Fund will grow to or maintain an economically viable size, in which
case it may experience greater tracking error to its Index than it otherwise
would at higher asset levels, or it could ultimately liquidate. The Fund’s
distributor does not maintain a secondary market in Fund
shares.
▪Non-Diversification
Risk. Although
the Fund intends to invest in a variety of securities and instruments, the Fund
is considered to be non-diversified, which means that it may invest more of its
assets in the securities of a single issuer or a smaller number of issuers than
if it were a diversified fund. As a result, the Fund may be more exposed to the
risks associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may
increase the Fund’s volatility and cause the performance of a relatively smaller
number of issuers to have a greater impact on the Fund’s
performance.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Index is based on securities’ closing
prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely affected.
Fund
Performance
Performance information for the Fund is not
included because the Fund did not commence operations prior to the date of this
Prospectus. In the future, performance information for the Fund
will be presented in this section. Updated performance information will be
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
CSOP FTSE China A50 ETF |
Investment
Objective
The
Pacer
CSOP FTSE China A50 ETF (the “Fund”) is an exchange traded fund
(“ETF”) that seeks to provide investment results that, before fees and expenses,
track the performance for the FTSE China A50 Net Total Return Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.70% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.70% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1
Year |
3
Years |
5
Years |
10
Years |
$72 |
$224 |
$390 |
$871 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the portfolio turnover rate was
12% of the average
value of the portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The
Index
The
Index is comprised of A-Shares issued by the 50 largest companies in the China
A-Shares market. The Index is a net total return index, which means that the
performance of the Index assumes that dividends paid by the Index constituents,
net of any withholding taxes, are reinvested in additional shares of such Index
constituents.
The
Index is a free float-adjusted market capitalization-weighted index compiled and
published by FTSE International Limited (“FTSE” or the “Index Provider”), which
is not affiliated with the Fund, Pacer Advisors, Inc. (the “Adviser”), CSOP
Asset Management Limited (the “Sub-Adviser”), or the Fund’s distributor. The
Index is a real-time, tradable index comprising the largest 50 China A-Share
companies by full market capitalization of the FTSE China A All Cap Free Index.
The Index is a subset of the FTSE China A All Cap Free Index, FTSE’s most
comprehensive benchmark for the Chinese A-Share market. It is denominated and
quoted in Chinese Yuan (“CNY”) and comprised of stocks listed on the Shanghai
Stock and Shenzhen Stock Exchange main markets, the Shenzhen SME Board and/or
the Shenzhen ChiNext Board. The Index Provider determines the composition of the
Index and relative weightings of the Index constituents based on the Index’s
methodology, and publishes information regarding the market value of the
Index.
As
of June 30, 2024, the 10 largest constituent securities of the Index represented
approximately 45.43% of the Index.
The
Fund’s Investment Strategy
A-Shares
are a specific classification of equity securities issued by companies
incorporated in the People’s Republic of China (“China” or the “PRC”). A-Shares
are denominated and traded in renminbi (“RMB”), the official currency of the
PRC, on the Shenzhen and Shanghai Stock Exchanges.
Since
November of 2014, foreign investors have been permitted to invest in eligible
China A-Shares listed on the Shanghai Stock Exchange through the Shanghai-Hong
Kong Stock Connect program. The Shanghai-Hong Kong Stock Connect program, which
was launched in 2014, established a securities trading and clearing program that
enables mutual stock market access between mainland China and Hong Kong. Through
the Shanghai-Hong Kong Stock Connect program, foreign investors such as the Fund
can trade eligible China A-Shares subject to trading limits and rules and
regulations as may be issued from time to time. More recently, in December of
2016 foreign investors are also permitted to invest in eligible China A-Shares
listed on the Shenzhen Stock Exchange through the Shenzhen-Hong Kong Stock
Connect program. While the Fund may access China A-Shares through the
Shenzhen-Hong Kong Stock Connect program in the future, it has no immediate
plans to do so.
The
Sub-Adviser, on behalf of the Fund, will invest in eligible China A-Shares via
the Shanghai-Hong Kong Stock Connect program.
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index. The Fund may invest the remainder of
its assets in investments that are not included in the Index, but which the
Sub-Adviser believes will help the Fund track the Index. These investments
include: (i) interests in pooled investment vehicles tracking the Index or
similar indexes, including affiliated and non-U.S. funds (certain of these funds
may not be registered under the Investment Company Act of 1940, as amended (the
“1940 Act”), and therefore are not subject to the same investor protections as
the Fund); and (ii) other securities not included in the Index (including
H-Shares, which are shares of a company incorporated in mainland China that are
denominated in Hong Kong dollars and listed on the Hong Kong Stock Exchange or
other foreign exchange). The Fund also may invest in money market instruments,
cash, and cash equivalents.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the Index. However, the Fund may
use a “representative sampling” strategy, meaning it may invest in a sample of
the securities in the Index whose risk, return and other characteristics closely
resemble the risk, return and other characteristics of the Index as a whole,
when the Fund’s sub-adviser believes it is in the best interests of the Fund
(e.g., when replicating the Index involves practical difficulties or substantial
costs, an Index constituent becomes temporarily illiquid, unavailable, or less
liquid, or as a result of legal restrictions or limitations that apply to the
Fund but not to the Index). Unlike many investment companies, the Fund does not
try to “beat” the Index and does not seek temporary defensive positions when
markets decline or appear overvalued.
The
Fund is diversified under the Investment Company Act, but may invest more of its
assets in the securities of a single issuer or small number of issuers than
would otherwise be permitted for a diversified fund solely where the additional
issuer weightings result from the index weighting of one or more Index
constituents. As of June 30, 2024, the Index was concentrated in the
consumer staples and financial sectors.
Principal Investment
Risks
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
▪Risk
of Investing in China. Investing
in securities of companies organized and listed in China subjects the Fund to
risks specific to China. China is a developing market, and as a result,
investments in securities of companies organized and listed in China may be
subject to liquidity constraints and significantly higher volatility, from time
to time, than investments in securities of more developed markets. China may be
subject to considerable government intervention and varying degrees of economic,
political and social instability. Internal social unrest or confrontations with
other neighboring countries, including military conflicts in response to such
events, could have a significant impact on the economy of China (and the world).
Reduction in spending on Chinese products and services, institution of tariffs
or other trade barriers, or a downturn in any of the economies of China’s key
trading partners may have an adverse impact on the Chinese economy. There is no
guarantee that the Chinese government will not revert from its current
open-
market
economy to the economic policy of central planning that it implemented prior to
1978. These factors may result in, among other things, a greater risk of stock
market, interest rate, and currency fluctuations, as well as inflation.
Accounting, auditing and financial reporting standards in China are different
from U.S. standards and, therefore, disclosure of certain material information
may not be made. In addition, less information may be available to the Fund and
other investors than would be the case if the Fund’s investments were limited to
securities of U.S. issuers. It may also be difficult or impossible for the Fund
to obtain or enforce a judgment in a Chinese
court.
▪Risk
of Investments in A-Shares. The
Index is comprised of A-Shares listed on the Shanghai and Shenzhen Stock
Exchanges. In seeking to track the performance of the Index, the Fund intends to
invest in A-Shares through the Shanghai-Hong Kong Stock Connect program. If the
Fund is unable to obtain sufficient exposure to the performance of the Index due
to trading or other restrictions on the Shanghai-Hong Kong Stock Connect
program, the Fund could be forced to limit or suspend the issuance of new shares
until the Sub-Adviser determines that the requisite exposure to the Index is
obtainable. Any limits on the Fund’s ability to issue new shares could cause the
Fund’s shares to trade at a premium or discount to the NAV of the Fund and the
Fund could experience substantial redemptions.
The Chinese government may intervene in the A-Shares market and halt
or suspend trading of A-Share securities for short or even extended periods of
time. Recently, the A-Shares market has experienced considerable volatility and
been subject to frequent and extensive trading halts and suspensions. These
trading halts and suspensions have, among other things, contributed to
uncertainty in the markets and reduced the liquidity of the securities subject
to such trading halts and suspensions, including a number of securities held by
the Fund.
▪A-Shares
Tax Risk. The
Fund’s investments in A-Shares will be subject to a number of taxes and tax
regulations in China. The application of many of these tax regulations is at
present uncertain. Moreover, the PRC has implemented a number of tax reforms in
recent years, including the value added tax reform, and may continue to amend or
revise existing PRC tax laws in the future. Changes in applicable PRC tax law,
particularly taxation on a retrospective basis, could reduce the after-tax
profits of the Fund directly or indirectly by reducing the after-tax profits of
the companies in the PRC in which the Fund invests. Uncertainties in the Chinese
tax rules governing taxation of income and gains from investments in A-Shares
could result in unexpected tax liabilities for the Fund. The Fund’s investments
in securities issued by PRC companies, including A-Shares, may cause the Fund to
become subject to withholding income tax and other taxes imposed by the PRC. The
PRC taxation rules are evolving, may change, and new rules may be applied
retroactively. Any such changes could have an adverse impact on Fund
performance.
▪Risk
of Investing Through Shanghai-Hong Kong Stock Connect. The
Fund may invest in China A-Shares listed and traded on the Shanghai Stock
Exchange through the Shanghai-Hong Kong Stock Connect program. Trading through
the Shanghai-Hong Kong Stock Connect program is subject to a number of
restrictions that may impact the Fund’s investments and returns. Among other
restrictions, investors in securities obtained via the Shanghai-Hong Kong Stock
Connect program are generally subject to Chinese securities regulations and
Shanghai Stock Exchange rules. Securities obtained via the Shanghai-Hong Kong
Stock Connect program generally may only be sold, purchased or otherwise
transferred through the Shanghai-Hong Kong Stock Connect program in accordance
with applicable rules. Although the Fund is not subject to individual investment
quotas, daily investment quotas designed to limit the maximum daily net
purchases on any particular day apply to all participants in the Shanghai-Hong
Kong Stock Connect program. These daily investment quotas may restrict or
preclude the ability of the Fund to invest in securities obtained via the
program. Additionally, investments made through the Shanghai-Hong Kong Stock
Connect program are subject to trading, clearance and settlement procedures that
are relatively untested in China, which could pose risks to the
Fund.
▪Risk
of Investing in Issuers listed on the ChiNext Board. The
issuers listed on the ChiNext Board generally are companies in the early stages
of development pursuing ventures in the scientific development, innovation and
media industries. As a result, these issuers generally have limited operating
histories, less mature business models, and limited risk management capacity.
These traits cause ChiNext-listed issuers to be vulnerable to market risks and
market volatility, both of which may adversely affect the performance of an
issuer and thus, the Fund’s investment in such
issuer.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources
of information will provide an accurate assessment of included components or a
correct valuation of securities, nor can they guarantee the availability or
timeliness of the production of the Index.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act
as APs. In addition, there may be a limited number of market makers and/or
liquidity providers in the marketplace. To the extent either of the following
events occur, shares of the Fund may trade at a material discount to NAV and
possibly face delisting: (i) APs exit the business or otherwise become
unable to process creation and/or redemption orders and no other APs step
forward to perform these services, or (ii) market makers and/or liquidity
providers exit the business or significantly reduce their business activities
and no other entities step forward to perform their functions.
◦Cash
Redemption Risk. The
Fund’s investment strategy may require it to redeem Shares for cash or to
otherwise include cash as part of its redemption proceeds. The Fund may be
required to sell or unwind portfolio investments to obtain the cash needed to
distribute redemption proceeds. This may cause the Fund to recognize a capital
gain that it might not have recognized if it had made a redemption in-kind. As a
result, the Fund may pay out higher annual capital gain distributions than if
the in-kind redemption process was used. ETF shares can only be redeemed in
creation units by APs. Individual shareholders may only purchase and sell ETF
shares on a secondary market.
◦Costs
of Buying or Selling Shares of the Fund. Due to the costs of buying or selling shares of the Fund, including
brokerage commissions imposed by brokers and bid/ask spreads, frequent trading
of shares of the Fund may significantly reduce investment results and an
investment in shares of the Fund may not be advisable for investors who
anticipate regularly making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV. As with all ETFs, shares of the Fund may be bought and sold in the
secondary market at market prices. The price of shares of the Fund, like the
price of all traded securities, will be subject to factors such as supply and
demand, as well as the current value of the Fund’s portfolio holdings. Although
it is expected that the market price of the shares of the Fund will approximate
the Fund’s NAV, there may be times when the market price of the shares is more
than the NAV intra-day (premium) or less than the NAV intra-day (discount). This
risk is heightened in times of market volatility, periods of steep market
declines, and periods when there is limited trading activity for shares in the
secondary market, in which case such premiums or discounts may be significant.
Because securities held by the Fund trade on foreign exchanges that are closed
when the Fund’s primary listing exchange is open, the Fund is likely to
experience premiums and discounts greater than those of domestic
ETFs.
◦Trading. Although shares of the Fund are listed
for trading on a national securities exchange, such as NYSE Arca, Inc. (the
“Exchange”), and may be traded on U.S. exchanges other than the Exchange, there
can be no assurance that shares of the Fund will trade with any volume, or at
all, on any stock exchange. In stressed market conditions, the liquidity of
shares of the Fund may begin to mirror the liquidity of the Fund’s underlying
portfolio holdings, which can be significantly less liquid than shares of the
Fund, and this could lead to differences between the market price of the shares
of the Fund and the underlying value of those
shares.
▪China
Concentration Risk. To
the extent that the Fund’s investments are concentrated in the securities of
China, or a particular issuer or issuers, market, industry, group of industries,
sector or asset class, the Fund may be more adversely affected by the
underperformance of those securities, subject to increased price volatility, and
more susceptible to adverse economic, market, political and regulatory
occurrences than if the Fund’s assets were more
diversified.
▪Emerging
Markets Risk. While
China’s economy has expanded in recent years, China is still considered an
emerging market economy. As such, the
Fund’s investments are subject to greater risk of loss than investments in more
developed markets. This is due to, among other things, increased risk of
government intervention, greater market volatility, lower trading volume and
liquidity constraints, political and economic instability, greater risk of
market shutdown and more governmental limitations on foreign investments than is
typically found in more developed markets.
▪Equity
Market Risk. The equity securities held in the Fund’s portfolio may experience
sudden, unpredictable drops in value or long periods of decline in value. This
may occur because of factors that affect securities markets generally or factors
affecting specific industries, sectors or companies in which the Fund invests.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value as market confidence in and
perceptions of their issuers change. The Fund’s NAV and market price may
fluctuate significantly in response to these and other factors. As a result, an
investor could lose money over short or long periods of time.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪Index
Tracking Error Risk. As
with other index funds, the performance of the Fund may vary from the
performance of the Index as a result of Fund fees and expenses, the use of
representative sampling, brokerage and transaction costs, the effect of Chinese
taxes, and other factors. In addition, the Fund may not be able to invest in
certain securities included in the Index or invest in them in the exact
proportions represented in the Index due to market disruptions, legal
restrictions or limitations imposed by the Chinese government, certain NYSE Arca
listing standards, or a lack of liquidity on stock exchanges in which such
securities trade. The Fund may not be fully invested at times either as a result
of cash flows into the Fund or reserves of cash held by the Fund to meet
redemptions or pay expenses. In addition, foreign exchange fluctuations and any
issues the Fund encounters with regard to currency convertibility (including the
cost of borrowing funds, if any) and repatriation may also increase the index
tracking error risk.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic expansion. The Fund’s
portfolio may underperform other segments of the Chinese equity market or the
equity market as a whole.
▪Non-U.S.
Currency Risk. The
Fund’s assets will be invested primarily in the securities of issuers in China,
and the gains, losses and income received by the Fund will be denominated
primarily in RMB whereas the Fund’s reference currency is the U.S. dollar. As a
result, the Fund’s performance may be adversely affected by changes in currency
exchange rates, which can be very volatile and change quickly and unpredictably.
Such fluctuations may be due to changes in interest rates, investors’
expectations concerning inflation and interest rates, the imposition of currency
controls or other national or global political or economic developments.
Moreover, the Fund may incur costs in connection with conversions between U.S.
dollars and foreign currencies. In addition, the remittance of foreign currency
and the exchange of RMB within China are subject to significant governmental
restrictions. Because all transactions in A-Shares must be settled in RMB,
limitations of the supply of RMB may adversely affect the Fund’s operations.
There is no assurance that the Fund will continue to have access to sufficient
amounts of RMB to remain fully invested.
▪Passive
Investment Risk. The Fund is not actively managed and the Adviser would not sell a
security due to current or projected underperformance of a security, industry or
sector, unless that security is removed from the Index or the selling of shares
of that security is otherwise required upon a reconstitution of the Index in
accordance with the Index methodology. The Fund invests in securities included
in the Index, regardless of their investment merits. The Fund does not take
defensive positions under any market conditions, including conditions that are
adverse to the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Consumer
Staples Sector Risk.
The permissibility of using various food additives and production methods, fads,
marketing campaigns, and other factors affecting consumer demand is tied closely
to the performance of companies in this sector. In particular, tobacco companies
may be adversely affected by new laws, regulations,
and litigation. The consumer staples sector may also be adversely
affected by changes or trends in commodity prices, which may be influenced or
characterized by unpredictable factors.
◦Financials
Sector Risk. This
sector can be significantly affected by changes in interest rates, government
regulation, the rate of defaults on corporate, consumer, and government debt,
the availability and cost of capital, and fallout from the housing and sub-prime
mortgage crisis. Insurance companies, in particular, may be significantly
affected by changes in interest rates, catastrophic events, price and market
competition, the imposition of premium rate caps, or other changes in government
regulation or tax law and/or rate regulation, which may have an adverse impact
on their profitability. In recent years, cyber attacks and technology
malfunctions and failures have become increasingly frequent in this sector and
have caused significant losses.
Fund
Performance
The
Fund is the successor to the investment performance of the CSOP FTSE China A50
ETF, a series of CSOP ETF Trust (the “Predecessor CSOP Fund”), as a result of
the reorganization of the Predecessor CSOP Fund into the Fund on
January 22, 2020. Accordingly, any performance information for periods
prior to January 22, 2020 is that of the Predecessor CSOP Fund. The
Predecessor CSOP Fund had the same investment objective, and substantially
similar investment policies, strategies, and risks as the Fund since the
Predecessor CSOP Fund’s inception.
The following
performance information indicates some of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table illustrates how the Fund and
Predecessor CSOP Fund’s average annual returns for the one year, five year, and
since inception periods compare with those of the Index. The
Fund’s past performance, before and after taxes, does not necessarily indicate
how it will perform in the future. Updated performance
information is also available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period
ended June 30, 2024, the
Fund’s total return was 3.12%. During the period of time shown in the
bar chart, the Fund’s highest quarterly return
was 28.61% the (quarter ended March 31, 2019),and
the Fund’s lowest quarterly return was
-17.69% (quarter ended September 30,
2022).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
5
Years |
Since
Inception
(3/10/15) |
Pacer
CSOP FTSE China A50 ETF |
|
| |
Return
Before Taxes |
-11.67% |
3.19% |
1.70% |
Return
After Taxes on Distributions |
-11.91% |
2.72% |
0.84% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
-6.37% |
2.67% |
1.43% |
FTSE
China A50 Net Total Return Index
(reflects no deduction for
fees, expenses, or taxes) |
-10.78% |
3.84% |
2.16% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Investment
Sub-Adviser
CSOP
Asset Management Limited (“CSOP Asset Management”) serves as investment
sub-adviser to the Fund.
Portfolio
Managers
The
portfolio managers currently jointly and primarily responsible for the
day-to-day management of the Fund’s portfolio are Yi Wang and Fred Zhang, each
of CSOP Asset Management. Mr. Zhang has managed the Fund and the Predecessor
CSOP Fund since inception and Mr. Wang has managed the Fund since August
2020.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser, the Sub-Adviser, and their related companies may pay the
intermediary for activities related to the marketing and promotion of the Fund.
These payments may create a conflict of interest by influencing the
broker-dealer or other intermediary and your salesperson to recommend the Fund
over another investment. Ask your salesperson or visit your financial
intermediary’s website for more information.
|
| |
Pacer
Hotel & Lodging Real Estate ETF |
Investment
Objective
The
Pacer
Hotel & Lodging Real Estate ETF (the “Fund”) is an exchange
traded fund (“ETF”) that seeks to track the total return performance, before
fees and expenses, of the Pacer Hotel & Lodging Real Estate Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses1 |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
1
Estimated for
the current fiscal year.
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
Because the Fund had not commenced operations as of the date of this Prospectus,
portfolio turnover information is not yet
available.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index was developed by Pacer Advisers Inc. (the “Index Provider”), an
affiliate of Pacer Advisors, Inc., the Fund’s investment adviser (the
“Adviser”), and measures the performance of the hotel, motel, and lodging real
estate sectors of the U.S. equity market.
The
Index
The
Index is generally composed of the U.S.-listed equity securities of companies
that derive at least 85% of their earnings or revenues from real estate
operations in the hotel, motel, and lodging real estate sectors (“Eligible
Companies”). At the time of each reconstitution of the Index, Eligible Companies
with a market capitalization of more than $200 million and average daily traded
volume of at least 10,000 shares are included in the Index (the “Index
Constituents”). A significant portion of the Index is expected to be composed of
real estate investment trusts (“REITs”). The real estate companies included in
the Index may utilize leverage, and some may be highly leveraged. Additionally,
such companies may include significant business operations outside of the United
States.
The
Index is reconstituted and rebalanced (i.e.,
companies are added or deleted and weights are reset based on Index rules)
quarterly as of the close of business on the third Friday of March, June,
September, and December. Index Constituents are weighted based on their
free-float market capitalization (i.e.,
market capitalization based on the number of shares available to the public),
subject to the following constraints as of the time of each reconstitution of
the Index. Each Index
Constituent’s
weight is capped at 15% and the sum of Index Constituents with weights greater
than 4.5% cannot exceed 45% of the total Index weight. If the foregoing limits
would be exceeded at the time of a reconstitution of the Index, the excess
weight is proportionally redistributed to all Index Constituents with weights
below such limits.
The
Fund’s Investment Strategy
Under
normal circumstances, the Fund will invest at least 80% of the value of its net
assets, plus the amount of any borrowings for investment purposes, in companies
in the hotel and lodging real estate sector. The Fund defines
the hotel and lodging real estate sector as consisting of companies that derive
at least 50% of their revenues or profits from owning or managing hotels,
motels, resorts, or other lodging properties that rent space to guests. Pacer
Advisors, Inc. (the “Adviser”) expects that, over time, the correlation between
the Fund’s performance and that of the Index, before fees and expenses, will be
95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index.
The
Fund may also invest up to 20% of its assets in cash and cash equivalents, other
investment companies, as well as securities and other instruments not included
in the Index but which the Adviser believes will help the Fund track the
Index.
The
Fund is considered to be non-diversified, which means that it may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
in Real Estate Risk.
The Index, and consequently the Fund, is expected to concentrate its investments
(i.e., hold more than 25% of its total assets) in real estate companies.
As a result, the value of the Fund’s shares may rise and fall more than the
value of shares of a fund that invests in securities of companies in a broader
range of industries. In addition, at times, the real estate industry may be out
of favor and underperform other industries or groups of
industries.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as NYSE Arca, Inc. (the “Exchange”), and may be traded on U.S.
exchanges other than the Exchange, there can be no assurance that shares of the
Fund will trade with any volume, or at all, on any stock exchange. In stressed
market conditions, the liquidity of shares of the Fund may begin to mirror the
liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪International
Operations Risk. Investments
in companies with significant business operations outside of the United States
may involve certain risks that may not be present with investments in U.S.
companies. For example, international operations may be subject to risk of loss
due to foreign currency fluctuations; changes in foreign political and economic
environments, regionally, nationally, and locally; challenges of complying with
a wide variety of foreign laws, including corporate governance, operations,
taxes, and litigation; differing lending practices; differences in cultures;
changes in applicable laws and regulations in the United States that affect
international operations; changes in applicable laws and regulations in foreign
jurisdictions; difficulties in managing international operations; and obstacles
to the repatriation of earnings and cash. These and other factors can make an
investment in the Fund more volatile than other types of
investments.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform
securities
of other capitalization ranges or the market as a whole. Securities of smaller
companies trade in smaller volumes and are often more vulnerable to market
volatility than securities of larger companies.
▪New
Fund Risk. The
Fund is new with no operating history. As a result, there can be no assurance
that the Fund will grow to or maintain an economically viable size, in which
case it may experience greater tracking error to its Index than it otherwise
would at higher asset levels, or it could ultimately liquidate. The Fund’s
distributor does not maintain a secondary market in Fund
shares.
▪Non-Diversification
Risk. Although
the Fund intends to invest in a variety of securities and instruments, the Fund
is considered to be non-diversified, which means that it may invest more of its
assets in the securities of a single issuer or a smaller number of issuers than
if it were a diversified fund. As a result, the Fund may be more exposed to the
risks associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may
increase the Fund’s volatility and cause the performance of a relatively smaller
number of issuers to have a greater impact on the Fund’s
performance.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Real
Estate Companies Risk. The
Fund invests in real estate companies, including REITs and real estate holdings
companies, which will expose investors to the risks of owning real estate
directly, as well as to the risks that relate specifically to the way in which
such companies are organized and operated. Real estate is highly sensitive to
general and local economic conditions and developments. The U.S. real estate
market may, in the future, experience and has, in the past, experienced a
decline in value, with certain regions experiencing significant losses in
property values. Many real estate companies, including REITs, utilize leverage
(and some may be highly leveraged), which increases investment risk and the risk
normally associated with debt financing, and could potentially increase the
Fund’s volatility and losses. Exposure to such real estate may adversely affect
Fund performance.
In
addition to the foregoing risks common to most real estate companies, companies
in certain real estate sectors may have additional unique risks.
◦Risks
of Investing in the Hotel & Lodging Real Estate Sector.
Companies in the Hotel & Lodging Real Estate sector may be affected by
unique supply and demand factors that do not apply to other real estate sectors.
Weak economic conditions in some parts of the world, changes in oil prices and
currency values, political instability in some areas, and the uncertainty over
how long any of these conditions will continue, could continue to have a
negative impact on the lodging industry. As a result of such current economic
conditions and uncertainty, the lodging industry may continue to experience
weakened demand for occupancy in some
markets.
▪REIT
Investment Risk. Investments
in REITs involve unique risks. REITs may have limited financial resources, may
trade less frequently and in limited volume, and may be more volatile than other
securities. In addition, to the extent the Fund holds interests in REITs, it is
expected that investors in the Fund will bear two layers of asset-based
management fees and expenses (directly at the Fund level and indirectly at the
REIT level). The risks of investing in REITs include certain risks associated
with the direct ownership of real estate and the real estate industry in
general. These include risks related to general, regional and local economic
conditions; fluctuations in interest rates and property tax rates; shifts in
zoning laws, environmental regulations and other governmental action such as the
exercise of eminent domain; cash flow dependency; increased operating expenses;
lack of availability of mortgage funds; losses due to natural disasters;
overbuilding; losses due to casualty or condemnation; changes in property values
and rental rates; and other
factors.
In
addition to these risks, REITs are dependent upon management skills and
generally may not be diversified. REITs are also subject to heavy cash flow
dependency, defaults by borrowers and self-liquidation. In addition, REITs could
possibly fail to qualify for the beneficial tax treatment available to REITs
under the Internal Revenue Code of 1986, or to maintain their exemptions from
registration under the Investment Company Act of 1940, as amended (the “1940
Act”). The Fund expects that dividends received from a REIT and distributed to
Fund shareholders generally will be
taxable
to the shareholder as ordinary income, but may be taxable as return of capital.
In the event of a default by a borrower or lessee, the REIT may experience
delays in enforcing its rights as a mortgagee or lessor and may incur
substantial costs associated with protecting
investments.
▪Small-Capitalization
Companies Risk. The
equity securities of small-capitalization companies have historically been
subject to greater investment risk than securities of larger companies. The
prices of equity securities of small-capitalization companies tend to be more
volatile and less liquid than the prices of equity securities of larger
companies.
▪Tax
Risk. To
qualify for the favorable tax treatment generally available to regulated
investment companies, the Fund must satisfy certain diversification
requirements. In particular, the Fund generally may not acquire a security if,
as a result of the acquisition, more than 50% of the value of the Fund’s assets
would be invested in (a) issuers in which the Fund has, in each case, invested
more than 5% of the Fund’s assets or (b) issuers more than 10% of whose
outstanding voting securities are owned by the Fund. While the weighting of the
Index is not inconsistent with these rules, given the concentration of the Index
in a relatively small number of securities, it may not always be possible for
the Fund to fully implement a replication strategy or a representative sampling
strategy while satisfying these diversification requirements. The Fund’s efforts
to satisfy the diversification requirements may affect the Fund’s execution of
its investment strategy and may cause the Fund’s return to deviate from that of
the Index, and the Fund’s efforts to replicate or represent the Index may cause
it inadvertently to fail to satisfy the diversification requirements. If the
Fund were to fail to satisfy the diversification requirements, it could incur
penalty taxes and be forced to dispose of certain assets, or it could fail to
qualify as a regulated investment company. If the Fund were to fail to qualify
as a regulated investment company, it would be taxed in the same manner as an
ordinary corporation, and distributions to its shareholders would not be
deductible by the Fund in computing its taxable
income.
▪Tracking
Risk.
The Fund’s return may not track the return of the Index for a number of reasons.
For example, the Fund incurs a number of operating expenses not applicable to
the Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index. Additionally, the Fund’s return may not track the return of the
Index if the Fund is not able to replicate the holdings of the Index due to the
diversification requirements described above under “Tax Risk,” which apply to
the Fund but not the Index.
Fund
Performance
Performance information for the Fund is not
included because the Fund did not commence operations prior to the date of this
Prospectus. In the future, performance information for the Fund
will be presented in this section. Updated performance information will be
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Apartments & Residential Real Estate
ETF |
Investment
Objective
The
Pacer
Apartments & Residential Real Estate ETF (the “Fund”) is an
exchange traded fund (“ETF”) that seeks to track the total return performance,
before fees and expenses, of the Pacer Apartments & Residential Real Estate
Index (the “Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses1 |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
1
Estimated for the current fiscal
year.
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
Because the Fund had not commenced operations as of the date of this Prospectus,
portfolio turnover information is not yet
available.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index was developed by Pacer Advisers Inc. (the “Index Provider”) an
affiliate of Pacer Advisors, Inc., the Fund’s investment adviser (the
“Adviser”), and measures the performance of the apartment, student housing, and
residential rental real estate sectors of the U.S. equity market.
The
Index
The
Index is generally composed of the U.S.-listed equity securities of companies
that derive at least 85% of their earnings or revenues from real estate
operations in the apartment, student housing, and residential rental real estate
sectors (“Eligible Companies”). At the time of each reconstitution of the Index,
Eligible Companies with a market capitalization of more than $200 million and
average daily traded volume of at least 10,000 shares are included in the Index
(the “Index Constituents”). A significant portion of the Index is expected to be
composed of real estate investment trusts (“REITs”). The real estate companies
included in the Index may utilize leverage, and some may be highly leveraged.
Additionally, such companies may include significant business operations outside
of the United States.
The
Index is reconstituted and rebalanced (i.e.,
companies are added or deleted and weights are reset based on Index rules)
quarterly as of the close of business on the third Friday of March, June,
September, and December. Index Constituents are weighted based on their
free-float market capitalization (i.e.,
market capitalization based on the number of shares available to the public),
subject to the following constraints as of the time of each reconstitution of
the Index. Each Index
Constituent’s
weight is capped at 15% and the sum of Index Constituents with weights greater
than 4.5% cannot exceed 45% of the total Index weight. If the foregoing limits
would be exceeded at the time of a reconstitution of the Index, the excess
weight is proportionally redistributed to all Index Constituents with weights
below such limits.
The
Fund’s Investment Strategy
Under
normal circumstances, the Fund will invest at least 80% of the value of its net
assets, plus the amount of any borrowings for investment purposes, in companies
in the apartments and residential real estate sector. The Fund
defines the apartments and residential real estate sector as consisting of
companies that derive at least 50% of their revenues or profits from owning or
managing apartment buildings, student housing, manufactured homes, and
single-family homes. Pacer Advisors, Inc. (the “Adviser”) expects that, over
time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index.
The
Fund may also invest up to 20% of its assets in cash and cash equivalents, other
investment companies, as well as securities and other instruments not included
in the Index but which the Adviser believes will help the Fund track the
Index.
The
Fund is considered to be non-diversified, which means that it may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
in Real Estate Risk.
The Index, and consequently the Fund, is expected to concentrate its investments
(i.e., hold more than 25% of its total assets) in real estate companies.
As a result, the value of the Fund’s shares may rise and fall more than the
value of shares of a fund that invests in securities of companies in a broader
range of industries. In addition, at times, the real estate industry may be out
of favor and underperform other industries or groups of
industries.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform
these
services, or (ii) market makers and/or liquidity providers exit the
business or significantly reduce their business activities and no other entities
step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as NYSE Arca, Inc. (the “Exchange”), and may be traded on U.S.
exchanges other than the Exchange, there can be no assurance that shares of the
Fund will trade with any volume, or at all, on any stock exchange. In stressed
market conditions, the liquidity of shares of the Fund may begin to mirror the
liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪International
Operations Risk. Investments
in companies with significant business operations outside of the United States
may involve certain risks that may not be present with investments in U.S.
companies. For example, international operations may be subject to risk of loss
due to foreign currency fluctuations; changes in foreign political and economic
environments, regionally, nationally, and locally; challenges of complying with
a wide variety of foreign laws, including corporate governance, operations,
taxes, and litigation; differing lending practices; differences in cultures;
changes in applicable laws and regulations in the United States that affect
international operations; changes in applicable laws and regulations in foreign
jurisdictions; difficulties in managing international operations; and obstacles
to the repatriation of earnings and cash. These and other factors can make an
investment in the Fund more volatile than other types of
investments.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪New
Fund Risk. The
Fund is new with no operating history. As a result, there can be no assurance
that the Fund will grow to or maintain an economically viable size, in which
case it may experience greater tracking error to its Index than it otherwise
would at higher asset levels, or it could ultimately liquidate. The Fund’s
distributor does not maintain a secondary market in Fund
shares.
▪Non-Diversification
Risk. Although the Fund intends to invest in a variety of securities and
instruments, the Fund is considered to be non-diversified, which means that it
may invest more of its assets in the securities of a single issuer or a smaller
number of issuers than if it were a diversified fund. As a result, the Fund may
be more exposed to the risks associated with and developments affecting an
individual issuer or a smaller number of issuers than a fund that invests more
widely. This may increase the Fund’s volatility and cause the performance of a
relatively smaller number of issuers to have a greater impact on the Fund’s
performance.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Real
Estate Companies Risk. The
Fund invests in real estate companies, including REITs and real estate holdings
companies, which will expose investors to the risks of owning real estate
directly, as well as to the risks that relate specifically to the way in which
such companies are organized and operated. Real estate is highly sensitive to
general and local economic conditions and developments. The U.S. real estate
market may, in the future, experience and has, in the past, experienced a
decline in value, with certain regions experiencing significant losses in
property values. Many real estate companies, including REITs, utilize leverage
(and some may be highly leveraged), which increases investment risk and the risk
normally associated with debt financing, and could potentially increase the
Fund’s volatility and losses. Exposure to such real estate may adversely affect
Fund performance.
In
addition to the foregoing risks common to most real estate companies, companies
in certain real estate sectors may have additional unique risks.
◦Risks
of Investing in the Apartments & Residential Real Estate Sector.
Companies in the Apartments & Residential Real Estate sector may be affected
by unique supply and demand factors that do not apply to other real estate
sectors. Residential real estate development is particularly subject to changes
in financing costs, occupancy rates, the ability to obtain zoning or other
permits or government approvals, labor costs, and scheduling delays.
Additionally, such companies may face significant costs associated with
compliance (or failure to comply with) the accessibility provisions of federal,
state or local requirements.
▪REIT
Investment Risk.
Investments in REITs involve unique risks. REITs may have limited financial
resources, may trade less frequently and in limited volume, and may be more
volatile than other securities. In addition, to the extent the Fund holds
interests in REITs, it is expected that investors in the Fund will bear two
layers of asset-based management fees and expenses (directly at the Fund level
and indirectly at the REIT level). The risks of investing in REITs include
certain risks associated with the direct ownership of real estate and the real
estate industry in general. These include risks related to general, regional and
local economic conditions; fluctuations in interest rates and property tax
rates; shifts in zoning laws, environmental regulations and other governmental
action such as the exercise of eminent domain; cash flow dependency; increased
operating expenses; lack of availability of mortgage funds; losses due to
natural disasters; overbuilding; losses due to casualty or condemnation; changes
in property values, vacancy, and rental rates; and other
factors.
In
addition to these risks, REITs are dependent upon management skills and
generally may not be diversified. REITs are also subject to heavy cash flow
dependency, defaults by borrowers and self-liquidation. In addition, REITs could
possibly fail to qualify for the beneficial tax treatment available to REITs
under the Internal Revenue Code of 1986, or to maintain their exemptions from
registration under the Investment Company Act of 1940, as amended (the “1940
Act”). The Fund expects that dividends received from a REIT and distributed to
Fund shareholders generally will be taxable to the shareholder as ordinary
income, but may be taxable as return of capital. In the event of a default by a
borrower or lessee, the REIT may experience delays in enforcing its rights as a
mortgagee or lessor and may incur substantial costs associated with protecting
investments.
▪Small-Capitalization
Companies Risk. The
equity securities of small-capitalization companies have historically been
subject to greater investment risk than securities of larger companies. The
prices of equity securities of small-capitalization companies tend to be more
volatile and less liquid than the prices of equity securities of larger
companies.
▪Tax
Risk. To
qualify for the favorable tax treatment generally available to regulated
investment companies, the Fund must satisfy certain diversification
requirements. In particular, the Fund generally may not acquire a security if,
as a result of the acquisition, more than 50% of the value of the Fund’s assets
would be invested in (a) issuers in which the Fund has, in each case, invested
more than 5% of the Fund’s assets or (b) issuers more than 10% of whose
outstanding voting securities are owned by the Fund. While the weighting of the
Index is not inconsistent with these rules, given the concentration of the Index
in a relatively small number of securities, it may not always be possible for
the Fund to fully implement a replication strategy or a representative sampling
strategy while satisfying these diversification requirements. The Fund’s efforts
to satisfy the diversification requirements may affect the Fund’s execution of
its investment strategy and may cause the Fund’s return to deviate from that of
the Index, and the Fund’s efforts to replicate or represent the Index may cause
it inadvertently to fail to satisfy the diversification requirements. If the
Fund were to fail to satisfy the diversification requirements, it could incur
penalty taxes and be forced to dispose of certain assets, or it could fail to
qualify as a regulated investment company. If the Fund were to fail to qualify
as a regulated investment company, it would be taxed in the same manner as an
ordinary corporation, and distributions to its shareholders would not be
deductible by the Fund in computing its taxable
income.
▪Tracking
Risk.
The Fund’s return may not track the return of the Index for a number of reasons.
For example, the Fund incurs a number of operating expenses not applicable to
the Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index. Additionally, the Fund’s return may not track the return of the
Index if the Fund is not able to replicate the holdings of the Index due to the
diversification requirements described above under “Tax Risk,” which apply to
the Fund but not the Index.
Fund
Performance
Performance information for the Fund is not
included because the Fund did not commence operations prior to the date of this
Prospectus. In the future, performance information for the Fund
will be presented in this section. Updated performance information will be
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Healthcare Real Estate ETF |
Investment
Objective
The
Pacer
Healthcare Real Estate ETF (the “Fund”) is an exchange traded
fund (“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Pacer Healthcare Real Estate Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses1 |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
1
Estimated for the current fiscal
year.
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
Because the Fund had not commenced operations as of the date of this Prospectus,
portfolio turnover information is not yet
available.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index was developed by Pacer Advisers Inc. (the “Index Provider”), an
affiliate of Pacer Advisors, Inc., the Fund’s investment adviser (the
“Adviser”), and measures the performance of the healthcare real estate sectors
of the U.S. equity market.
The
Index
The
Index is generally composed of the U.S.-listed equity securities of companies
that derive at least 85% of their earnings or revenues from real estate
operations in the healthcare real estate sectors (“Eligible Companies”). At the
time of each reconstitution of the Index, Eligible Companies with a market
capitalization of more than $200 million and average daily traded volume of at
least 10,000 shares are included in the Index (the “Index Constituents”). A
significant portion of the Index is expected to be composed of real estate
investment trusts (“REITs”). The real estate companies included in the Index may
utilize leverage, and some may be highly leveraged. Additionally, such companies
may include significant business operations outside of the United States.
The
Index is reconstituted and rebalanced (i.e.,
companies are added or deleted and weights are reset based on Index rules)
quarterly as of the close of business on the third Friday of March, June,
September, and December. Index Constituents are weighted based on their
free-float market capitalization (i.e.,
market capitalization based on the number of shares available to the public),
subject to the following constraints as of the time of each reconstitution of
the Index. Each Index Constituent’s weight is capped at 15% and the sum of Index
Constituents with weights greater than 4.5% cannot exceed
45%
of the total Index weight. If the foregoing limits would be exceeded at the time
of a reconstitution of the Index, the excess weight is proportionally
redistributed to all Index Constituents with weights below such
limits.
The
Fund’s Investment Strategy
Under
normal circumstances, the Fund will invest at least 80% of the value of its net
assets, plus the amount of any borrowings for investment purposes, in companies
in the healthcare real estate sector. The Fund defines the
healthcare real estate sector as consisting of companies that derive at least
50% of their revenues or profits from owning or managing healthcare real estate
(e.g., senior living facilities, hospitals, medical office buildings, skilled
nursing facilities). Pacer Advisors, Inc. (the “Adviser”) expects that, over
time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index.
The
Fund may also invest up to 20% of its assets in cash and cash equivalents, other
investment companies, as well as securities and other instruments not included
in the Index but which the Adviser believes will help the Fund track the
Index.
The
Fund is considered to be non-diversified, which means that it may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
in Real Estate Risk.
The Index, and consequently the Fund, is expected to concentrate its investments
(i.e., hold more than 25% of its total assets) in real estate companies.
As a result, the value of the Fund’s shares may rise and fall more than the
value of shares of a fund that invests in securities of companies in a broader
range of industries. In addition, at times, the real estate industry may be out
of favor and underperform other industries or groups of
industries.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act
as APs. In addition, there may be a limited number of market makers and/or
liquidity providers in the marketplace. To the extent either of the following
events occur, shares of the Fund may trade at a material discount to NAV and
possibly face delisting: (i) APs exit the business or otherwise become
unable to process creation and/or redemption orders and no other APs step
forward to perform these services, or (ii) market makers and/or liquidity
providers exit the business or significantly reduce their business activities
and no other entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as NYSE Arca, Inc. (the “Exchange”), and may be traded on U.S.
exchanges other than the Exchange, there can be no assurance that shares of the
Fund will trade with any volume, or at all, on any stock exchange. In stressed
market conditions, the liquidity of shares of the Fund may begin to mirror the
liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪International
Operations Risk. Investments
in companies with significant business operations outside of the United States
may involve certain risks that may not be present with investments in U.S.
companies. For example, international operations may be subject to risk of loss
due to foreign currency fluctuations; changes in foreign political and economic
environments, regionally, nationally, and locally; challenges of complying with
a wide variety of foreign laws, including corporate governance, operations,
taxes, and litigation; differing lending practices; differences in cultures;
changes in applicable laws and regulations in the United States that affect
international operations; changes in applicable laws and regulations in foreign
jurisdictions; difficulties in managing international operations; and obstacles
to the repatriation of earnings and cash. These and other factors can make an
investment in the Fund more volatile than other types of
investments.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪New
Fund Risk. The
Fund is new with no operating history. As a result, there can be no assurance
that the Fund will grow to or maintain an economically viable size, in which
case it may experience greater tracking error to its Index than it otherwise
would at higher asset levels, or it could ultimately liquidate. The Fund’s
distributor does not maintain a secondary market in Fund
shares.
▪Non-Diversification
Risk. Although
the Fund intends to invest in a variety of securities and instruments, the Fund
is considered to be non-diversified, which means that it may invest more of its
assets in the securities of a single issuer or a smaller number of issuers than
if it were a diversified fund. As a result, the Fund may be more exposed to the
risks
associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may
increase the Fund’s volatility and cause the performance of a relatively smaller
number of issuers to have a greater impact on the Fund’s
performance.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Real
Estate Companies Risk. The
Fund invests in real estate companies, including REITs and real estate holdings
companies, which will expose investors to the risks of owning real estate
directly, as well as to the risks that relate specifically to the way in which
such companies are organized and operated. Real estate is highly sensitive to
general and local economic conditions and developments. The U.S. real estate
market may, in the future, experience and has, in the past, experienced a
decline in value, with certain regions experiencing significant losses in
property values. Many real estate companies, including REITs, utilize leverage
(and some may be highly leveraged), which increases investment risk and the risk
normally associated with debt financing, and could potentially increase the
Fund’s volatility and losses. Exposure to such real estate may adversely affect
Fund performance.
In
addition to the foregoing risks common to most real estate companies, companies
in certain real estate sectors may have additional unique risks.
◦Risks
of Investing in the Healthcare Real Estate Sector.
Companies in the Healthcare Real Estate sector may be affected by unique supply
and demand factors that do not apply to other real estate sectors. Such
companies may be subject to risks related to severe cold and flu seasons,
epidemics, or any other widespread illnesses that could affect the occupancy of
healthcare properties, including seniors housing. Additionally, healthcare
companies may be significantly dependent on one or a small number of long-term
management agreements for seniors housing communities, which may subject such
companies to the risks affecting such management
companies.
▪REIT
Investment Risk. Investments
in REITs involve unique risks. REITs may have limited financial resources, may
trade less frequently and in limited volume, and may be more volatile than other
securities. In addition, to the extent the Fund holds interests in REITs, it is
expected that investors in the Fund will bear two layers of asset-based
management fees and expenses (directly at the Fund level and indirectly at the
REIT level). The risks of investing in REITs include certain risks associated
with the direct ownership of real estate and the real estate industry in
general. These include risks related to general, regional and local economic
conditions; fluctuations in interest rates and property tax rates; shifts in
zoning laws, environmental regulations and other governmental action such as the
exercise of eminent domain; cash flow dependency; increased operating expenses;
lack of availability of mortgage funds; losses due to natural disasters;
overbuilding; losses due to casualty or condemnation; changes in property values
and rental rates; and other
factors.
In
addition to these risks, REITs are dependent upon management skills and
generally may not be diversified. REITs are also subject to heavy cash flow
dependency, defaults by borrowers and self-liquidation. In addition, REITs could
possibly fail to qualify for the beneficial tax treatment available to REITs
under the Internal Revenue Code of 1986, or to maintain their exemptions from
registration under the Investment Company Act of 1940, as amended (the “1940
Act”). The Fund expects that dividends received from a REIT and distributed to
Fund shareholders generally will be taxable to the shareholder as ordinary
income, but may be taxable as return of capital. In the event of a default by a
borrower or lessee, the REIT may experience delays in enforcing its rights as a
mortgagee or lessor and may incur substantial costs associated with protecting
investments.
▪Small-Capitalization
Companies Risk. The
equity securities of small-capitalization companies have historically been
subject to greater investment risk than securities of larger companies. The
prices of equity securities of small-capitalization companies tend to be more
volatile and less liquid than the prices of equity securities of larger
companies.
▪Tax
Risk. To
qualify for the favorable tax treatment generally available to regulated
investment companies, the Fund must satisfy certain diversification
requirements. In particular, the Fund generally may not acquire a security if,
as a
result
of the acquisition, more than 50% of the value of the Fund’s assets would be
invested in (a) issuers in which the Fund has, in each case, invested more than
5% of the Fund’s assets or (b) issuers more than 10% of whose outstanding voting
securities are owned by the Fund. While the weighting of the Index is not
inconsistent with these rules, given the concentration of the Index in a
relatively small number of securities, it may not always be possible for the
Fund to fully implement a replication strategy or a representative sampling
strategy while satisfying these diversification requirements. The Fund’s efforts
to satisfy the diversification requirements may affect the Fund’s execution of
its investment strategy and may cause the Fund’s return to deviate from that of
the Index, and the Fund’s efforts to replicate or represent the Index may cause
it inadvertently to fail to satisfy the diversification requirements. If the
Fund were to fail to satisfy the diversification requirements, it could incur
penalty taxes and be forced to dispose of certain assets, or it could fail to
qualify as a regulated investment company. If the Fund were to fail to qualify
as a regulated investment company, it would be taxed in the same manner as an
ordinary corporation, and distributions to its shareholders would not be
deductible by the Fund in computing its taxable
income.
▪Tracking
Risk.
The Fund’s return may not track the return of the Index for a number of reasons.
For example, the Fund incurs a number of operating expenses not applicable to
the Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index. Additionally, the Fund’s return may not track the return of the
Index if the Fund is not able to replicate the holdings of the Index due to the
diversification requirements described above under “Tax Risk,” which apply to
the Fund but not the Index.
Fund
Performance
Performance information for the Fund is not
included because the Fund did not commence operations prior to the date of this
Prospectus. In the future, performance information for the Fund
will be presented in this section. Updated performance information will be
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Industrial Real Estate
ETF |
Investment
Objective
The
Pacer
Industrial Real Estate ETF (the “Fund”) is an exchange traded
fund (“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Solactive GPR Industrial Real Estate Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses1 |
0.60% |
1
Total
Annual Fund Operating Expenses do not correlate to the Expenses to Average Net
Assets After Advisory Fees (Waived) in the Financial Highlights, because the
Advisory Fee waiver reflected in the Financial Highlights expires on
October 31,
2024.
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1
Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
19% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index was developed by Global Property Research B.V. and Solactive AG (the
“Index Provider”), and measures the performance of the industrial real estate
sector primarily of the U.S. equity market, which includes warehouse and
self-storage real estate sub-sectors.
The
Index
The
Index is generally composed of the equity securities of developed markets
companies that derive at least 85% of their earnings or revenues from real
estate operations in the industrial real estate sector (“Industrial Companies”),
including companies that derive at least 85% of their earnings or revenues from
self-storage real estate operations (“Self-Storage Companies”). At the time of
each reconstitution of the Index, Industrial Companies with a market
capitalization of more than $200 million and average daily traded volume of at
least 10,000 shares that are part of the GPR 250 Index are included in the Index
(the “Index Constituents”). A significant portion of the Index is expected to be
composed of real estate investment trusts (“REITs”). The real estate companies
included in the Index may utilize leverage, and some may be highly leveraged.
Additionally, such companies may include significant business operations outside
of the United States.
The
Index is reconstituted and rebalanced (i.e.,
companies are added or deleted and weights are reset based on Index rules)
quarterly as of the close of business on the third Friday of March, June,
September, and December. Index Constituents are
weighted
based on their free-float market capitalization (i.e.,
market capitalization based on the number of shares available to the public),
subject to the following constraints as of the time of each reconstitution of
the Index. The sum of all Industrial Companies that are not Self-Storage
Companies cannot exceed 80% of the total Index weight, and the remaining weight
will be composed of Self-Storage Companies. Additionally, each Index
Constituent’s weight is capped at 15% and the sum of Index Constituents with
weights greater than 4.5% cannot exceed 45% of the total Index weight. If the
foregoing limits would be exceeded at the time of a reconstitution of the Index,
the excess weight is proportionally redistributed to all Index Constituents with
weights below such limits.
The
Fund’s Investment Strategy
Under
normal circumstances, the Fund will invest at least 80% of the value of its net
assets, plus the amount of any borrowings for investment purposes, in companies
the industrial real estate sector. The Fund defines the
industrial real estate sector as consisting of companies that derive at least
50% of their revenues or profits from owning or managing land or buildings used
for industrial purposes (e.g., warehouses, distribution facilities, storage or
self-storage facilities). Pacer Advisors, Inc. (the “Adviser”) expects that,
over time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index.
The
Fund may also invest up to 20% of its assets in cash and cash equivalents, other
investment companies, as well as securities and other instruments not included
in the Index but which the Adviser believes will help the Fund track the
Index.
The
Fund is considered to be non-diversified, which means that it may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
in Real Estate Risk.
The Index, and consequently the Fund, is expected to concentrate its investments
(i.e., hold more than 25% of its total assets) in real estate companies.
As a result, the value of the Fund’s shares may rise and fall more than the
value of shares of a fund that invests in securities of companies in a broader
range of industries. In addition, at times, the real estate industry may be out
of favor and underperform other industries or groups of
industries.
▪Currency
Exchange Rate Risk. The Fund’s assets may include investments denominated in non-U.S.
currencies, such as the euro, or in securities or other assets that provide
exposure to such currencies. Changes in currency exchange rates and the relative
value of non-U.S. currencies will affect the value of the Fund’s investment and
the value of your Fund shares. Currency exchange rates can be very volatile and
can change quickly and unpredictably. As a result, the value of an investment in
the Fund may change quickly and without warning and you may lose
money.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and
perceptions
of their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund. Due to the costs of buying or selling shares of the Fund, including
brokerage commissions imposed by brokers and bid/ask spreads, frequent trading
of shares of the Fund may significantly reduce investment results and an
investment in shares of the Fund may not be advisable for investors who
anticipate regularly making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV. As with all ETFs, shares of the Fund may be bought and sold in the
secondary market at market prices. The price of shares of the Fund, like the
price of all traded securities, will be subject to factors such as supply and
demand, as well as the current value of the Fund’s portfolio holdings. Although
it is expected that the market price of the shares of the Fund will approximate
the Fund’s NAV, there may be times when the market price of the shares is more
than the NAV intra-day (premium) or less than the NAV intra-day (discount). This
risk is heightened in times of market volatility, periods of steep market
declines, and periods when there is limited trading activity for shares in the
secondary market, in which case such premiums or discounts may be significant.
Because securities held by the Fund trade on foreign exchanges that are closed
when the Fund’s primary listing exchange is open, the Fund is likely to
experience premiums and discounts greater than those of domestic
ETFs.
◦Trading. Although shares of the Fund are listed
for trading on a national securities exchange, such as NYSE Arca, Inc. (the
“Exchange”), and may be traded on U.S. exchanges other than the Exchange, there
can be no assurance that shares of the Fund will trade with any volume, or at
all, on any stock exchange. In stressed market conditions, the liquidity of
shares of the Fund may begin to mirror the liquidity of the Fund’s underlying
portfolio holdings, which can be significantly less liquid than shares of the
Fund, and this could lead to differences between the market price of the shares
of the Fund and the underlying value of those
shares.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪Geographic
Concentration Risk. To
the extent the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or
region.
◦Risks
Related to Investing in Canada.
The Canadian economy is reliant on the sale of natural resources and
commodities, which can pose risks such as the fluctuation of prices and the
variability of demand for exportation of such products. Changes in spending on
Canadian products by the economies of other countries or changes in any of these
economies may cause a significant impact on the Canadian
economy.
▪International
Operations Risk. Investments
in companies with significant business operations outside of the United States
may involve certain risks that may not be present with investments in U.S.
companies. For example, international operations may be subject to risk of loss
due to foreign currency fluctuations; changes in foreign political and economic
environments, regionally, nationally, and locally; challenges of complying with
a wide variety of foreign
laws,
including corporate governance, operations, taxes, and litigation; differing
lending practices; differences in cultures; changes in applicable laws and
regulations in the United States that affect international operations; changes
in applicable laws and regulations in foreign jurisdictions; difficulties in
managing international operations; and obstacles to the repatriation of earnings
and cash. These and other factors can make an investment in the Fund more
volatile than other types of investments.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Non-Diversification
Risk. Although the Fund intends to invest in a variety of securities and
instruments, the Fund is considered to be non-diversified, which means that it
may invest more of its assets in the securities of a single issuer or a smaller
number of issuers than if it were a diversified fund. As a result, the Fund may
be more exposed to the risks associated with and developments affecting an
individual issuer or a smaller number of issuers than a fund that invests more
widely. This may increase the Fund’s volatility and cause the performance of a
relatively smaller number of issuers to have a greater impact on the Fund’s
performance.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Real
Estate Companies Risk. The
Fund invests in real estate companies, including REITs and real estate holdings
companies, which will expose investors to the risks of owning real estate
directly, as well as to the risks that relate specifically to the way in which
such companies are organized and operated. Real estate is highly sensitive to
general and local economic conditions and developments. The U.S. real estate
market may, in the future, experience and has, in the past, experienced a
decline in value, with certain regions experiencing significant losses in
property values. Many real estate companies, including REITs, utilize leverage
(and some may be highly leveraged), which increases investment risk and the risk
normally associated with debt financing, and could potentially increase the
Fund’s volatility and losses. Exposure to such real estate may adversely affect
Fund performance.
In
addition to the foregoing risks common to most real estate companies, companies
in certain real estate sectors may have additional unique risks.
◦Risks
of Investing in the Industrial Real Estate Sector.
Companies in the Industrial Real Estate sector may be affected by unique supply
and demand factors that do not apply to other real estate sectors. For example,
industrial real estate may be more susceptible to changes in interest rates,
macroeconomic trends, government regulation, and tax regulation than other real
estate sectors. Industrial real estate may also be concentrated in
logistics-related industries, which could expose industrial real estate
companies to the risks of a downturn affecting logistics
companies.
▪REIT
Investment Risk. Investments
in REITs involve unique risks. REITs may have limited financial resources, may
trade less frequently and in limited volume, and may be more volatile than other
securities. In addition, to the extent the Fund holds interests in REITs, it is
expected that investors in the Fund will bear two layers of asset-based
management fees and expenses (directly at the Fund level and indirectly at the
REIT level). The risks of investing in REITs include certain risks associated
with the direct ownership of real estate and the real estate industry in
general. These include risks related to general, regional and local economic
conditions; fluctuations in interest rates and property tax rates; shifts in
zoning laws, environmental regulations and other governmental action such as the
exercise
of
eminent domain; cash flow dependency; increased operating expenses; lack of
availability of mortgage funds; losses due to natural disasters; overbuilding;
losses due to casualty or condemnation; changes in property values and rental
rates; and other factors.
In addition to these risks, REITs are dependent upon management
skills and generally may not be diversified. REITs are also subject to heavy
cash flow dependency, defaults by borrowers and self-liquidation. In addition,
REITs could possibly fail to qualify for the beneficial tax treatment available
to REITs under the Internal Revenue Code of 1986, or to maintain their
exemptions from registration under the Investment Company Act of 1940, as
amended (the “1940 Act”). The Fund expects that dividends received from a REIT
and distributed to Fund shareholders generally will be taxable to the
shareholder as ordinary income, but may be taxable as return of capital. In the
event of a default by a borrower or lessee, the REIT may experience delays in
enforcing its rights as a mortgagee or lessor and may incur substantial costs
associated with protecting investments.
▪Small-Capitalization
Companies Risk. The
equity securities of small-capitalization companies have historically been
subject to greater investment risk than securities of larger companies. The
prices of equity securities of small-capitalization companies tend to be more
volatile and less liquid than the prices of equity securities of larger
companies.
▪Tax
Risk. To
qualify for the favorable tax treatment generally available to regulated
investment companies, the Fund must satisfy certain diversification
requirements. In particular, the Fund generally may not acquire a security if,
as a result of the acquisition, more than 50% of the value of the Fund’s assets
would be invested in (a) issuers in which the Fund has, in each case, invested
more than 5% of the Fund’s assets or (b) issuers more than 10% of whose
outstanding voting securities are owned by the Fund. While the weighting of the
Index is not inconsistent with these rules, given the concentration of the Index
in a relatively small number of securities, it may not always be possible for
the Fund to fully implement a replication strategy or a representative sampling
strategy while satisfying these diversification requirements. The Fund’s efforts
to satisfy the diversification requirements may affect the Fund’s execution of
its investment strategy and may cause the Fund’s return to deviate from that of
the Index, and the Fund’s efforts to replicate or represent the Index may cause
it inadvertently to fail to satisfy the diversification requirements. If the
Fund were to fail to satisfy the diversification requirements, it could incur
penalty taxes and be forced to dispose of certain assets, or it could fail to
qualify as a regulated investment company. If the Fund were to fail to qualify
as a regulated investment company, it would be taxed in the same manner as an
ordinary corporation, and distributions to its shareholders would not be
deductible by the Fund in computing its taxable
income.
▪Tracking
Risk.
The Fund’s return may not track the return of the Index for a number of reasons.
For example, the Fund incurs a number of operating expenses not applicable to
the Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index. Additionally, the Fund’s return may not track the return of the
Index if the Fund is not able to replicate the holdings of the Index due to the
diversification requirements described above under “Tax Risk,” which apply to
the Fund but not the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was -8.15%. During the period of
time shown in the bar chart, the Fund’s highest
return for a calendar quarter was 28.28% (quarter ended December 31, 2021)
and the Fund’s lowest return for a
calendar quarter was -19.52% (quarter ended June 30,
2022).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
5
Years |
Since
Inception
(5/14/18) |
Pacer
Industrial Real Estate ETF |
|
| |
Return
Before Taxes |
17.10% |
14.39% |
12.37% |
Return
After Taxes on Distributions |
15.93% |
13.48% |
11.44% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
10.46% |
11.19% |
9.54% |
Solactive
GPR Industrial Real Estate Index1
(reflects no deduction for
fees, expenses, or taxes) |
18.06% |
15.30% |
13.21% |
FTSE
NAREIT All Equity REITS Total Return Index
(reflects no deduction for
fees, expenses, or taxes) |
18.06% |
15.59% |
13.00% |
1
Effective November 1,
2022, the Fund’s investment objective changed to track the performance, before
fees and expenses, of the Solactive GPR Industrial Real Estate Index. Prior to
November 1, 2022, the Fund’s investment objective was to track the price and
total return performance, before fees and expenses, of the Kelly Industrial Real
Estate Index. Performance shown for periods prior to November 1, 2022, is that
of the Kelly Industrial Real Estate Index.
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Data & Infrastructure Real Estate ETF |
Investment
Objective
The
Pacer
Data & Infrastructure Real Estate ETF (the “Fund”) is an
exchange traded fund (“ETF”) that seeks to track the total return performance,
before fees and expenses, of the Solactive GPR Data & Infrastructure Real
Estate Index (the “Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses1 |
0.60% |
1
Total Annual Fund
Operating Expenses do not correlate to the Expenses to Average Net Assets After
Advisory Fees (Waived) in the Financial Highlights, because the Advisory Fee
waiver reflected in the Financial Highlights expires on October 31,
2024.
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1
Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
68% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index was developed by Global Property Research B.V. and Solactive AG (the
“Index Provider”), and measures the performance of the data and infrastructure
real estate sectors primarily of the U.S. equity market.
The
Index
The
Index is generally composed of equity securities of developed markets companies
that derive at least 85% of their earnings or revenues from real estate
operations in the data and infrastructure real estate sectors (“Eligible
Companies”). At the time of each reconstitution of the Index, Eligible Companies
with a market capitalization of more than $500 million and average daily traded
volume of at least 10,000 shares that are part of the GPR 250 Index and the GPR
Pure Infrastructure Index are included in the Index (the “Index Constituents”).
A significant portion of the Index is expected to be composed of real estate
investment trusts (“REITs”). The real estate companies included in the Index may
utilize leverage, and some may be highly leveraged. Additionally, such companies
may include significant business operations outside of the United States.
The
Index is reconstituted and rebalanced (i.e.,
companies are added or deleted and weights are reset based on Index rules)
quarterly as of the close of business on the third Friday of March, June,
September, and December. Index Constituents are
weighted
based on their free-float market capitalization (i.e.,
market capitalization based on the number of shares available to the public),
subject to the following constraints as of the time of each reconstitution of
the Index. Each Index Constituent’s weight is capped at 15% and the sum of Index
Constituents with weights greater than 4.5% cannot exceed 45% of the total Index
weight. If the foregoing limits would be exceeded at the time of a
reconstitution of the Index, the excess weight is proportionally redistributed
to all Index Constituents with weights below such limits.
The
Fund’s Investment Strategy
Under
normal circumstances, the Fund will invest at least 80% of the value of its net
assets, plus the amount of any borrowings for investment purposes, in companies
the data and infrastructure real estate sector. The Fund defines
the data and infrastructure real estate sector as consisting of companies that
derive at least 50% of their revenues or profits from owning or managing real
estate used to store, compute, or transmit large amounts of data (e.g., data
centers, communications towers). Pacer Advisors, Inc. (the “Adviser”) expects
that, over time, the correlation between the Fund’s performance and that of the
Index, before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index.
The
Fund may also invest up to 20% of its assets in cash and cash equivalents, other
investment companies, as well as securities and other instruments not included
in the Index but which the Adviser believes will help the Fund track the
Index.
The
Fund is considered to be non-diversified, which means that it may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
in Real Estate Risk.
The Index, and consequently the Fund, is expected to concentrate its investments
(i.e., hold more than 25% of its total assets) in real estate companies.
As a result, the value of the Fund’s shares may rise and fall more than the
value of shares of a fund that invests in securities of companies in a broader
range of industries. In addition, at times, the real estate industry may be out
of favor and underperform other industries or groups of
industries.
▪Currency
Exchange Rate Risk. The Fund’s assets may include investments denominated in non-U.S.
currencies, such as the euro, or in securities or other assets that provide
exposure to such currencies. Changes in currency exchange rates and the relative
value of non-U.S. currencies will affect the value of the Fund’s investment and
the value of your Fund shares. Currency exchange rates can be very volatile and
can change quickly and unpredictably. As a result, the value of an investment in
the Fund may change quickly and without warning and you may lose
money.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Because
securities held by the Fund trade on foreign exchanges that are closed when the
Fund’s primary listing exchange is open, the Fund is likely to experience
premiums and discounts greater than those of domestic
ETFs.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as NYSE Arca, Inc. (the “Exchange”), and may be traded on U.S.
exchanges other than the Exchange, there can be no assurance that shares of the
Fund will trade with any volume, or at all, on any stock exchange. In stressed
market conditions, the liquidity of shares of the Fund may begin to mirror the
liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪Geographic
Concentration Risk. To
the extent the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or
region.
▪International
Operations Risk. Investments
in companies with significant business operations outside of the United States
may involve certain risks that may not be present with investments in U.S.
companies. For example, international operations may be subject to risk of loss
due to foreign currency fluctuations; changes in foreign political and economic
environments, regionally, nationally, and locally; challenges of complying with
a wide variety of foreign laws, including corporate governance, operations,
taxes, and litigation; differing lending practices; differences in cultures;
changes in applicable laws and regulations in the United States that affect
international operations; changes in applicable laws and regulations in foreign
jurisdictions; difficulties in managing international operations; and obstacles
to the repatriation of earnings and cash. These and other factors can make an
investment in the Fund more volatile than other types of
investments.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform
securities
of smaller-capitalization companies or the market as a whole. The securities of
large-capitalization companies may be relatively mature compared to smaller
companies and therefore subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Non-Diversification
Risk. Although the Fund intends to invest in a variety of securities and
instruments, the Fund is considered to be non-diversified, which means that it
may invest more of its assets in the securities of a single issuer or a smaller
number of issuers than if it were a diversified fund. As a result, the Fund may
be more exposed to the risks associated with and developments affecting an
individual issuer or a smaller number of issuers than a fund that invests more
widely. This may increase the Fund’s volatility and cause the performance of a
relatively smaller number of issuers to have a greater impact on the Fund’s
performance.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Real
Estate Companies Risk. The
Fund invests in real estate companies, including REITs and real estate holdings
companies, which will expose investors to the risks of owning real estate
directly, as well as to the risks that relate specifically to the way in which
such companies are organized and operated. Real estate is highly sensitive to
general and local economic conditions and developments. The U.S. real estate
market may, in the future, experience and has, in the past, experienced a
decline in value, with certain regions experiencing significant losses in
property values. Many real estate companies, including REITs, utilize leverage
(and some may be highly leveraged), which increases investment risk and the risk
normally associated with debt financing, and could potentially increase the
Fund’s volatility and losses. Exposure to such real estate may adversely affect
Fund performance.
In
addition to the foregoing risks common to most real estate companies, companies
in certain real estate sectors may have additional unique risks.
◦Risks
of Investing in the Data & Infrastructure Real Estate Sector.
Companies in the Data & Infrastructure Real Estate sector may be affected by
unique supply and demand factors that do not apply to other real estate sectors,
such as changes in demand for communications infrastructure, consolidation of
tower sites, new technologies that may affect demand for communications towers,
and changes in demand for wireless infrastructure and wireless
connectivity.
▪REIT
Investment Risk. Investments
in REITs involve unique risks. REITs may have limited financial resources, may
trade less frequently and in limited volume, and may be more volatile than other
securities. In addition, to the extent the Fund holds interests in REITs, it is
expected that investors in the Fund will bear two layers of asset-based
management fees and expenses (directly at the Fund level and indirectly at the
REIT level). The risks of investing in REITs include certain risks associated
with the direct ownership of real estate and the real estate industry in
general. These include risks related to general, regional and local economic
conditions; fluctuations in interest rates and property tax rates; shifts in
zoning laws, environmental regulations and other governmental action such as the
exercise of eminent domain; cash flow dependency; increased operating expenses;
lack of availability of mortgage funds; losses due to natural disasters;
overbuilding; losses due to casualty or condemnation; changes in property values
and rental rates; and other
factors.
In
addition to these risks, REITs are dependent upon management skills and
generally may not be diversified. REITs are also subject to heavy cash flow
dependency, defaults by borrowers and self-liquidation. In addition, REITs could
possibly fail to qualify for the beneficial tax treatment available to REITs
under the Internal Revenue Code of 1986, or to maintain their exemptions from
registration under the Investment Company Act of 1940, as amended (the “1940
Act”). The Fund expects that dividends received from a REIT and distributed to
Fund shareholders generally will be
taxable
to the shareholder as ordinary income, but may be taxable as return of capital.
In the event of a default by a borrower or lessee, the REIT may experience
delays in enforcing its rights as a mortgagee or lessor and may incur
substantial costs associated with protecting
investments.
▪Small-Capitalization
Companies Risk. The equity securities of small-capitalization companies have
historically been subject to greater investment risk than securities of larger
companies. The prices of equity securities of small-capitalization companies
tend to be more volatile and less liquid than the prices of equity securities of
larger companies.
▪Tax
Risk. To
qualify for the favorable tax treatment generally available to regulated
investment companies, the Fund must satisfy certain diversification
requirements. In particular, the Fund generally may not acquire a security if,
as a result of the acquisition, more than 50% of the value of the Fund’s assets
would be invested in (a) issuers in which the Fund has, in each case, invested
more than 5% of the Fund’s assets or (b) issuers more than 10% of whose
outstanding voting securities are owned by the Fund. While the weighting of the
Index is not inconsistent with these rules, given the concentration of the Index
in a relatively small number of securities, it may not always be possible for
the Fund to fully implement a replication strategy or a representative sampling
strategy while satisfying these diversification requirements. The Fund’s efforts
to satisfy the diversification requirements may affect the Fund’s execution of
its investment strategy and may cause the Fund’s return to deviate from that of
the Index, and the Fund’s efforts to replicate or represent the Index may cause
it inadvertently to fail to satisfy the diversification requirements. If the
Fund were to fail to satisfy the diversification requirements, it could incur
penalty taxes and be forced to dispose of certain assets, or it could fail to
qualify as a regulated investment company. If the Fund were to fail to qualify
as a regulated investment company, it would be taxed in the same manner as an
ordinary corporation, and distributions to its shareholders would not be
deductible by the Fund in computing its taxable
income.
▪Tracking
Risk.
The Fund’s return may not track the return of the Index for a number of reasons.
For example, the Fund incurs a number of operating expenses not applicable to
the Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index. Additionally, the Fund’s return may not track the return of the
Index if the Fund is not able to replicate the holdings of the Index due to the
diversification requirements described above under “Tax Risk,” which apply to
the Fund but not the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year, and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was -7.07%. During the period of
time shown in the bar chart, the Fund’s highest
return for a calendar quarter was 20.82% (quarter ended March 31, 2019) and
the Fund’s lowest return for a
calendar quarter was -16.38% (quarter ended September 30,
2022).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
|
|
|
| |
| 1
Years |
5
Years |
Since
Inception
(5/15/18) |
Pacer
Data & Infrastructure Real Estate ETF |
|
| |
Return
Before Taxes |
6.97% |
7.17% |
5.74% |
Return
After Taxes on Distributions |
5.61% |
6.48% |
5.00% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
4.38% |
5.40% |
4.24% |
Solactive
GPR Data & Infrastructure Real Estate Index1
(reflects no deduction for
fees, expenses, or taxes) |
7.89% |
7.83% |
6.42% |
FTSE
NAREIT All Equity REITS Total Return Index
(reflects no deduction for
fees, expenses, or taxes) |
7.89% |
9.16% |
8.51% |
1
Effective November 1,
2022, the Fund’s investment objective changed to track the performance, before
fees and expenses, of the Solactive GPR Data & Infrastructure Real Estate
Index. Prior to November 1, 2022, the Fund’s investment objective was to track
the price and total return performance, before fees and expenses, of the Kelly
Data Center & Tech Infrastructure Index. Performance shown for periods prior
to November 1, 2022, is that of the Kelly Data Center & Tech Infrastructure
Index.
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Autopilot Hedged European Index ETF |
Investment
Objective
The
Pacer
Autopilot Hedged European Index ETF (the “Fund”) is an exchange
traded fund (“ETF”) that seeks to track the total return performance, before
fees and expenses, of the Pacer Autopilot Hedged European Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.65% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses1 |
0.00% |
Total
Annual Fund Operating Expenses |
0.65% |
1
Estimated for
the current fiscal year.
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
Because the Fund had not commenced operations as of the date of this Prospectus,
portfolio turnover information is not yet
available.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”).
The
Index
The
Pacer Autopilot Hedged European Index uses an objective, rules-based methodology
(i) to invest in the component stocks of the FTSE Eurozone Index and (ii) to
apply a proprietary currency hedging strategy pursuant to which the Index will
be short the euro and long the U.S. dollar during periods when the euro is
trending weaker against the U.S. dollar. The component stocks of the FTSE
Eurozone Index form the equity component of the Pacer Autopilot Hedged European
Index. The Index’s proprietary currency hedging strategy is overlayed on top of
the equity component.
Equity
Exposure.
The FTSE Eurozone Index is a rules-based, float-adjusted, market
capitalization-weighted index comprised of large- and mid-capitalization stocks
providing coverage of the developed markets in the euro zone, including
primarily France, Germany, Spain, the Netherlands, and Italy. The FTSE Eurozone
Index is derived from the FTSE Global Equity Index Series, which covers 98% of
the world’s investable market capitalization.
Currency
Hedging.
During each period when the euro’s 20-day moving average is lower than its
130-day moving average, the Index will, in addition to its equity exposure,
track 1-month forward currency contracts, rolled to each subsequent month as
applicable, to offset the Index’s exposure to the euro with exposure to U.S.
dollars (i.e.,
short the euro and long the U.S. dollar), known as being “currency hedged”. A
forward currency contract is an agreement to buy or sell a specific currency at
a future date at a price set at the time of the contract. During each period
when the euro’s 20-day moving average is higher than its 130-day moving average,
the Index will track only the equity exposure, known as being “currency
unhedged”.
The
Index may stay “currency hedged” or “currency unhedged” for short or extended
periods of time.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index and investments that have economic characteristics that
are substantially identical to the economic characteristics of such component
securities (e.g., depositary receipts). The Adviser expects that,
over time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
In
tracking the Index when it is currency hedged, the Fund enters into forward
currency contracts designed to offset the Fund’s exposure to the euro. The Fund
hedges the euro to the U.S. dollar by selling euro currency forwards at the
then-current one-month forward rate. The amount of forward contracts in the Fund
is based on the aggregate exposure of the Fund and Index to the euro at the time
the Index becomes currency hedged. While this approach is designed to minimize
the adverse impact of currency fluctuations on Fund returns, this does not
necessarily eliminate exposure to all adverse currency fluctuations. The return
of the forward currency contracts may not perfectly offset the actual
fluctuations of the euro relative to the U.S. dollar.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the Index.
The
Fund will be considered to be non-diversified, which means that it may invest
more of its assets in the securities of a single issuer or a smaller number of
issuers than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Currency
Exchange Rate Risk. The Fund’s assets may include investments denominated in non-U.S.
currencies, such as the euro, or in securities or other assets that provide
exposure to such currencies. Changes in currency exchange rates and the relative
value of non-U.S. currencies will affect the value of the Fund’s investment and
the value of your Fund shares. Currency exchange rates can be very volatile and
can change quickly and unpredictably. As a result, the value of an investment in
the Fund may change quickly and without warning and you may lose
money.
▪Equity
Market Risk. The equity securities held in the Fund’s portfolio may experience
sudden, unpredictable drops in value or long periods of decline in value. This
may occur because of factors that affect securities markets generally or factors
affecting specific industries, sectors or companies in which the Fund invests.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value as market confidence in and
perceptions of their issuers change. The Fund’s NAV and market price may
fluctuate significantly in response to these and other factors. As a result, an
investor could lose money over short or long periods of time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Because
securities held by the Fund trade on foreign exchanges that are closed when the
Fund’s primary listing exchange is open, the Fund is likely to experience
premiums and discounts greater than those of domestic
ETFs.
◦Trading. Although shares of the Fund are listed
for trading on a national securities exchange, such as Cboe BZX Exchange,
Inc. (the “Exchange”), and may be traded on U.S. exchanges other than the
Exchange, there can be no assurance that shares of the Fund will trade with any
volume, or at all, on any stock exchange. In stressed market conditions, the
liquidity of shares of the Fund may begin to mirror the liquidity of the Fund’s
underlying portfolio holdings, which can be significantly less liquid than
shares of the Fund, and this could lead to differences between the market price
of the shares of the Fund and the underlying value of those
shares.
▪European
Investment Risk.
The Fund is more exposed to the economic and political risks of Europe and of
the European countries in which it invests than funds whose investments are more
geographically diversified. Adverse economic and political events in Europe may
cause the Fund’s investments to decline in value. The economies and markets of
European countries are often closely connected and interdependent, and events in
one country in Europe can have an adverse impact on other European countries.
The Fund makes investments in securities of issuers that are domiciled in, or
have significant operations in, member countries of the European Union (the
“EU”) that are subject to economic and monetary controls that can adversely
affect the Fund’s investments. The European financial markets have experienced
volatility and adverse trends in recent years and these events have adversely
affected the exchange rate of the euro and may continue to significantly affect
other European countries. Decreasing imports or exports, changes in governmental
or EU regulations on trade, changes in the exchange rate of the euro, the
default or threat of default by an EU member country on its sovereign debt,
and/or an economic recession in an EU member country may have a significant
adverse effect on the economies of EU member countries and their trading
partners, including some or all of the European countries in which the Fund
invests.
The
risks of investing in the United Kingdom (UK) have been heightened as a result
of Brexit, the formal steps taken by the United Kingdom to exit the EU, which
has resulted in increased volatility and triggered political, economic, and
legal uncertainty. Although the UK has formally left the EU, uncertainty remains
as to the long-term consequences of Brexit and issuers in the UK may experience
lower growth as a result.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational
risks.
These and other factors can make investments in the Fund more volatile and
potentially less liquid than other types of investments. Foreign securities held
by the Fund may trade on markets that are closed when U.S. markets are open,
which may lead to a difference in the value of the Fund and the underlying
foreign securities.
▪Forward
Currency Contracts Risk. Forward
currency contracts and other currency management strategies may substantially
change the Fund’s exposure to currency exchange rates and could result in losses
to the Fund if currencies do not perform as expected or if the Fund is unable to
quickly enter or exit such contracts. The use of forward currency contracts
with third parties (i.e.,
“counterparties”) subjects the Fund to counterparty risk, including the risk
that a counterparty to these contracts becomes bankrupt, defaults on its
obligations, or otherwise fails to honor its obligations. If a counterparty
defaults on its payment obligations, the Fund may lose money and the value of an
investment in Fund shares may decrease. The use of forward currency contracts
may create leverage (i.e.,
investment exposure greater than the dollar amount invested), thereby causing
the Fund to be more volatile. Forward contracts require collateralization, and
the commitment of a large portion of the Fund’s assets as collateral could
impede portfolio management. Forward currency contracts are also subject to
valuation risk, which is the risk that the contracts may be difficult to value
and/or valued incorrectly.
▪Geographic
Concentration Risk. To
the extent the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or region. The Index’s,
and therefore the Fund’s, heavy equity exposure to two countries (France and
Germany) subjects the Fund to a higher degree of country risk than that of more
geographically diversified international funds.
▪Hedging
Risk.
Forward currency contracts used by the Fund to offset its exposure to the euro
may not perform as intended. There can be no assurance that the Fund’s hedging
transactions will be effective.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Mid-Capitalization
Investing Risk. The
Fund may invest in the securities of mid-capitalization companies. As a result,
the Fund’s performance may be adversely affected if securities of
mid-capitalization companies underperform securities of other capitalization
ranges or the market as a whole. Securities of smaller companies trade in
smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪New
Fund Risk. The
Fund is new with no operating history. As a result, there can be no assurance
that the Fund will grow to or maintain an economically viable size, in which
case it may experience greater tracking error to its Index than it otherwise
would at higher asset levels, or it could ultimately liquidate. The Fund’s
distributor does not maintain a secondary market in Fund
shares.
▪Non-Diversification
Risk. Although the Fund intends to invest in a variety of securities and
instruments, the Fund is considered to be non-diversified, which means that it
may invest more of its assets in the securities of a single issuer or a smaller
number of issuers than if it were a diversified fund. As a result, the Fund may
be more exposed to the risks associated with and developments affecting an
individual issuer or a smaller number of issuers than a fund that invests more
widely. This may increase the Fund’s volatility and cause the performance of a
relatively smaller number of issuers to have a greater impact on the Fund’s
performance.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the
Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Index is based on securities’ closing
prices on local foreign markets (i.e., the value of the Index is not based on fair value prices), the
Fund’s ability to track the Index may be adversely affected.
Fund
Performance
Performance information for the Fund is not
included because the Fund did not commence operations prior to the date of this
Prospectus. In the future, performance information for the Fund
will be presented in this section. Updated performance information will be
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
Investment
Objective
The
Pacer
WealthShield ETF (the “Fund”) is an exchange traded fund (“ETF”)
that seeks to track the total return performance, before fees and expenses, of
the Pacer WealthShield Index (the “Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
315% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed and maintained by
Index Design Group (the “Index Provider”), an affiliate of Pacer Advisors, Inc.,
the Fund’s investment adviser (the “Adviser”). The Index utilizes a systematic
risk management strategy that directs the Index’s exposure to U.S. equity
securities, U.S. Treasury securities, or a mix of each.
The
Index
The
Index uses an objective, rules-based methodology to implement a trend-following
strategy that directs some or all of the Index’s exposure to (i) U.S. equity
securities or (ii) U.S. Treasury securities depending on the strength of
the high-yield corporate (“junk”) bond market relative to U.S. Treasury bonds
and the momentum of certain U.S. equity sectors or industries and of long-term
U.S. Treasury bonds, as described below.
Exponential
Moving Average: An
exponential moving average (EMA) is a type of moving average that reacts faster
to recent price changes than a simple moving average.
Exposure
to Equities or Fixed Income
On
the third-to-last business day of each month (the “Selection Date”), the Index
will observe the ratio between the S&P U.S. High Yield Corporate Bond Index
and the S&P U.S. Treasury Bond 7-10 Year Index (the “Risk Ratio”). The Risk
Ratio relative to its 5-month exponential moving average determines whether the
Index will be in Equity Mode or Fixed Income Exposure, each as described below,
for the following month effective on the first day of such month. If the Risk
Ratio is at or above its 5-month exponential moving average, the Index will be
in Equity Exposure for the following
month.
If the Risk Ratio is below its 5-month exponential moving average, the Index
will be in Fixed Income Exposure for the following month.
Equity
Exposure
If
the Risk Ratio dictates that the Index will be in Equity Exposure for the
following month, the Index will select the five U.S. equity market components
(“Equity Components”) from the list below with the best performance. The
performance of each Equity Component is updated quarterly as of the Selection
Date in each March, June, September, and December, and is based on the total
return for the 6-month period ending on such Selection Date.
|
|
|
|
|
|
|
| |
S&P
500®
Energy Sector Total Return Index |
|
S&P
500®
Materials Sector Total Return Index |
S&P
500®
Information Technology Sector Total Return Index |
|
S&P
500®
Industrials Sector Total Return Index |
S&P
500®
Financials Sector Total Return Index |
|
S&P
500®
Health Care Sector Total Return Index |
S&P
500®
Utilities Sector Total Return Index |
|
S&P
500®
Real Estate Sector Total Return Index |
S&P
500®
Consumer Staples Sector Total Return Index |
| S&P
Biotechnology Select Industry Total Return Index |
S&P
500®
Consumer Discretionary Sector Total Return Index |
| Dow
Jones Internet Composite Index |
Each
of the five Equity Components selected will be equally weighted (i.e.,
20% to each Equity Component). However, if the value of any of the Equity
Components selected is below such Equity Component’s 7-month exponential moving
average, the 20% allocation to each such Equity Component will instead be
allocated to 3-month U.S. Treasury bills. For each Equity Component
included in the Index, the individual equity securities of such Equity Component
will be included in the Index holdings in the proportion they had as of the
Selection Date. When all five Equity Components selected are included in the
Index, the Index will be comprised of approximately 400 individual equity
securities.
Fixed
Income Exposure
If
the Risk Ratio dictates that the Index will be in Fixed Income Exposure for the
following month, the Index will be 100% allocated to the S&P U.S. Treasury
Bond 20+ Year Total Return Index (the “20+ Year Index”). However, if the value
of the 20+ Year Index is below its 7-month exponential moving average, the Index
will instead be 100% allocated to 3-month U.S. Treasury bills.
The
constituents identified as of the Selection Date will become effective on the
first business day of the month following the Selection Date.
The
Fund’s Investment Strategy
The Fund
attempts to invest all, or substantially all, of its assets in the component
securities that make up (i) the component securities of the Index or (ii) ETFs
that seek to track the performance of some or all of the component securities of
the Index in the same approximate weight as such component
securities. The Fund’s investments in the component securities
of the Index will consist of equity and/or fixed income securities or other ETFs
investing in such equity and/or fixed income securities. The Adviser expects
that, over time, the correlation between the Fund’s performance and that of the
Index, before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the Index.
The
Fund may invest in other ETFs whose holdings correspond to the holdings of an
Equity Component when such Equity Component is included in the Index. Similarly,
the Fund may invest in other ETFs whose holdings correspond to the holdings of
the 20+ Year Index or are comprised of 3-month U.S. Treasury bills when such
components are included in the Index.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Concentration
Risk. If the Index concentrates in an industry or group of industries,
the Fund’s investments may be concentrated accordingly. In such event, the value
of the Fund’s shares may rise and fall more than the value of shares of a fund
that invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as Cboe BZX Exchange, Inc. (the “Exchange”), and may be
traded on U.S. exchanges other than the Exchange, there can be no assurance that
shares of the Fund will trade with any volume, or at all, on any stock exchange.
In stressed market conditions, the liquidity of shares of the Fund may begin to
mirror the liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪Fixed
Income Risk. Generally, the value of fixed income securities will change
inversely with changes in interest rates. As interest rates rise, the market
value of fixed income securities tends to decrease. Conversely, as interest
rates fall, the market value of fixed income securities tends to increase. This
risk will be greater for long-term securities than for short-term securities. In
recent periods, governmental financial regulators, including the U.S. Federal
Reserve, have taken steps to increase interest rates. Changes in government
intervention may have adverse effects on investments, volatility, and the
liquidity of debt markets.
▪Government
Obligations Risk.
The Fund may invest in securities issued by the U.S. government. There can be no
guarantee that the United States will be able to meet its payment obligations
with respect to such securities. Additionally, market prices and yields of
securities supported by the full faith and credit of the U.S. government may
decline or be negative for short or long periods of
time.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Monthly
Exposure Risk. Because
the Index will only change its exposure monthly, (i) the Index’s exposure may be
affected by significant market movements at or near month end that are not
predictive of the market’s performance for the subsequent month and (ii) changes
to the Index’s exposure may lag a significant change in the market’s direction
(up or down) by as long as a month if such changes first take effect at or near
the beginning of a month. Such lags between market performance and changes to
the Index’s exposure may result in significant underperformance relative to the
broader equity or fixed income market.
▪Other
Investment Companies Risk. The Fund will incur higher and duplicative expenses when it invests
in other investment companies such as ETFs. There is also the risk that the Fund
may suffer losses due to the investment practices of the underlying funds. When
the Fund invests in other investment companies, the Fund will be subject to
substantially the same risks as those associated with the direct ownership of
securities held by such investment companies. Investments in ETFs are also
subject to the ETF Risks described above.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪REIT
Investment Risk. Investments
in REITs involve unique risks. REITs may have limited financial resources, may
trade less frequently and in limited volume, and may be more volatile than other
securities. In addition, to the extent the Fund holds interests in REITs, it is
expected that investors in the Fund will bear two layers of asset-based
management fees and expenses (directly at the Fund level and indirectly at the
REIT level). The risks of investing in REITs include certain risks associated
with the direct ownership of real estate and the real estate industry in
general. These include risks related to general, regional and local economic
conditions; fluctuations in interest rates and property tax rates; shifts in
zoning laws, environmental regulations and other governmental action such as the
exercise of eminent domain; cash flow dependency; increased operating expenses;
lack of availability of mortgage funds; losses due to natural disasters;
overbuilding; losses due to casualty or condemnation; changes in property values
and rental rates; and other factors.
In addition to these risks, REITs are dependent upon management
skills and generally may not be diversified. REITs are also subject to heavy
cash flow dependency, defaults by borrowers and self-liquidation. In addition,
REITs could possibly fail to qualify for the beneficial tax treatment available
to REITs under the Internal Revenue Code of 1986, or to maintain their
exemptions from registration under the Investment Company Act of 1940, as
amended (the “1940 Act”). The Fund expects that dividends received from a REIT
and distributed to Fund shareholders generally will be taxable to the
shareholder as ordinary income, but may be taxable as return of capital. In the
event of a default by a borrower or lessee, the REIT may experience delays in
enforcing its rights as a mortgagee or lessor and may incur substantial costs
associated with protecting investments.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Financials
Sector Risk. This
sector can be significantly affected by changes in interest rates, government
regulation, the rate of defaults on corporate, consumer, and government debt,
the availability and cost of capital, and fallout from the housing and sub-prime
mortgage crisis. Insurance companies, in particular, may be significantly
affected by changes in interest rates, catastrophic events, price and market
competition, the imposition of premium rate caps, or other changes in government
regulation or tax law and/or rate regulation, which may have an adverse impact
on their profitability. In recent years, cyber attacks and technology
malfunctions and failures have become increasingly frequent in this sector and
have caused significant losses.
◦Industrials
Sector Risk. The industrials sector may be affected by changes in the supply of
and demand for products and services, product obsolescence, claims for
environmental damage or product liability and general economic conditions, among
other factors.
◦Information
Technology Sector Risk. Market
or economic factors impacting information technology companies and companies
that rely heavily on technological advances could have a significant effect on
the value of the Fund’s investments. The value of stocks of information
technology companies and companies that rely heavily on technology is
particularly vulnerable to rapid changes in technology product cycles, rapid
product obsolescence, government regulation and competition, both domestically
and internationally, including competition from foreign competitors with lower
production costs. Stocks of information technology companies and companies that
rely heavily on technology, especially those of smaller, less-seasoned
companies, tend to be more volatile than the overall market. Information
technology companies are heavily dependent on patent and intellectual property
rights, the loss or impairment of which may adversely affect
profitability.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Index is based on securities’ closing
prices on local foreign markets (i.e.,
the value of the Index is not based on fair value prices), the Fund’s ability to
track the Index may be adversely
affected.
To
the extent the Fund uses a representative sampling approach, it will hold a
smaller number of securities than are in the Index. As a result, an adverse
development respecting an issuer of securities held by the Fund could result in
a greater decline in the Fund’s net asset value than would be the case if the
Fund held all of the securities in the Index. Conversely, a positive development
relating to an issuer of securities in the Index that is not held by the Fund
could cause the Fund to underperform the Index. To the extent the assets in the
Fund are smaller, these risks may be greater.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year, and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 9.44%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 14.69% (quarter ended December 31, 2020)
and the Fund’s lowest return for a
calendar quarter was -9.46% (quarter ended December 31,
2018).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
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|
| |
| 1
Year |
5
Year |
Since
Inception
(12/11/17) |
Pacer
WealthShield ETF |
|
| |
Return
Before Taxes |
-3.55% |
3.74% |
2.66% |
Return
After Taxes on Distributions |
-4.32% |
3.28% |
2.22% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
-2.01% |
2.77% |
1.93% |
Pacer
WealthShield Index
(reflects no deduction for
fees, expenses, or taxes) |
-2.97% |
3.90% |
2.97% |
S&P
500®
Index
(reflects no deduction for
fees, expenses, or taxes) |
26.29% |
15.69% |
12.07% |
S&P
U.S. Treasury Bond 20+ Year Total Return Index
(reflects no deduction for
fees, expenses, or taxes) |
3.32% |
-1.74% |
-1.71% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
CFRA-Stovall Global Seasonal Rotation
ETF |
Investment
Objective
The
Pacer
CFRA-Stovall Global Seasonal Rotation ETF (the “Fund”) is an
exchange traded fund (“ETF”) that seeks to track the total return performance,
before fees and expenses, of the CFRA-Stovall Global Seasonal Rotation Index
(USD) (the “Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses1 |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
1
Estimated for
the current fiscal year.
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
Because the Fund had not commenced operations as of the date of this Prospectus,
portfolio turnover information is not yet
available.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed by CFRA (the “Index
Provider”), a leading independent investment research firm.
The
Index
The
Index uses an objective, rules-based methodology to track the performance of a
semi-annual rotation of certain sectors within the S&P®
Global 1200 Index (S&P Global 1200”). The S&P Global 1200 is a
free-float weighted index that captures approximately 70% of the world market
capitalization, including stocks in 30 countries and covering all 11 Global
Industry Classification Standard (“GICS®”)
sectors, six of which are eligible for inclusion in the Index as described
below. The size of each region included in the S&P Global 1200 generally
corresponds to the region’s relative size in the global equity market based on
float- adjusted market values.
On
the last business day of each April, the Index is equally weighted in the
S&P Global 1200 Consumer Staples and Healthcare sectors. The Index holdings
then float until the last business day of the following October, when the Index
is reconstituted and rebalanced to an equal weighting in the S&P Global 1200
Consumer Discretionary, Industrials, Information Technology, and Materials
sectors. The Index holdings then float until the last business day of the
following
April (the next calendar year), when the Index is reconstituted and rebalanced
back to an equal weighting in the S&P Global 1200 Consumer Staples and
Healthcare sectors.
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
S&P®
Global 1200 Sector Rotation Schedule |
January
1 – April 30 |
| May
1 – October 31 |
| November
1 – December 31 |
Consumer
Discretionary |
Rebalance |
Consumer
Staples |
Rebalance |
Consumer
Discretionary |
Industrials |
Industrials |
Information
Technology |
Healthcare |
Information
Technology |
Materials |
|
|
Materials |
At
the time of each reconstitution of the Index, the Index is equally weighted in
the applicable S&P Global 1200 sectors. Within each sector allocation, the
weight of each individual stock is identical to its proportion of the applicable
sector weight in the S&P Global 1200. For example, on the last business day
of each April, the Index is reconstituted to include the individual stock
components of the S&P Global 1200 Consumer Staples and Healthcare sectors,
and the sum of the weight of the individual stock components of the S&P
Global 1200 Consumer Staples sector will equal the sum of the weight of the
individual stock components of the S&P Global 1200 Healthcare
sector.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index and in investments that have economic characteristics
that are substantially identical to the economic characteristics of such
component securities (e.g., depositary receipts), or in one or more ETFs that track the
performance of all or a portion of such component securities in the same
approximate proportion as in the Fund’s underlying Index. The
Fund’s investment adviser expects that, over time, the correlation between the
Fund’s performance and that of the Index, before fees and expenses, will be 95%
or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index.
The
Fund is considered to be non-diversified, which means that it may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.The
Index relies directly or indirectly on various sources of information to assess
the criteria of issuers included in the Index, including information that may be
based on assumptions and estimates. Neither the Fund, the Index Provider, or the
Adviser can offer assurances that the Index’s calculation methodology or sources
of information will provide an accurate assessment of included components or a
correct valuation of securities, nor can they guarantee the availability or
timeliness of the production of the Index.
▪Currency
Exchange Rate Risk. The
Fund’s assets may include exposure to investments denominated in non-U.S.
currencies or in securities or other assets that provide exposure to such
currencies. Changes in currency exchange rates and the relative value of
non-U.S. currencies will affect the value of the Fund’s investment and the value
of your Fund shares. Currency exchange rates can be very volatile and can change
quickly and unpredictably. As a result, the value of an investment in the Fund
may change quickly and without warning and you may lose
money.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets
generally
or factors affecting specific industries, sectors or companies in which the Fund
invests. Common stocks are susceptible to general stock market fluctuations and
to volatile increases and decreases in value as market confidence in and
perceptions of their issuers change. The Fund’s NAV and market price may
fluctuate significantly in response to these and other factors. As a result, an
investor could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may significantly reduce investment results and an investment in
shares of the Fund may not be advisable for investors who anticipate regularly
making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as NYSE Arca, Inc. (the “Exchange”), and may be traded on U.S.
exchanges other than the Exchange, there can be no assurance that shares of the
Fund will trade with any volume, or at all, on any stock exchange. In stressed
market conditions, the liquidity of shares of the Fund may begin to mirror the
liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪Large-Capitalization
Investing Risk. The Fund may invest in the securities of large-capitalization
companies. As a result, the Fund’s performance may be adversely affected if
securities of large-capitalization companies underperform securities of
smaller-capitalization companies or the market as a whole. The securities of
large-capitalization companies may be relatively mature compared to smaller
companies and therefore subject to slower growth during times of economic
expansion.
▪New
Fund Risk. The
Fund is new with no operating history. As a result, there can be no assurance
that the Fund will grow to or maintain an economically viable size, in which
case it may experience greater tracking error to its Index than it otherwise
would at higher asset levels, or it could ultimately liquidate. The Fund’s
distributor does not maintain a secondary market in Fund
shares.
▪Non-Diversification
Risk. Although
the Fund intends to invest in a variety of securities and instruments, the Fund
is considered to be non-diversified, which means that it may invest more of its
assets in the securities of a single issuer or a smaller number of issuers than
if it were a diversified fund. As a result, the Fund may be more exposed to the
risks associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may
increase the Fund’s volatility and cause the performance of a relatively smaller
number of issuers to have a greater impact on the Fund’s
performance.
▪Other
Investment Companies Risk. The Fund will incur higher and duplicative expenses when it invests
in other investment companies such as ETFs. There is also the risk that the Fund
may suffer losses due to the investment practices of the underlying funds. When
the Fund invests in other investment companies, the Fund will be subject to
substantially the same risks as those associated with the direct ownership of
securities held by such investment companies. Investments in ETFs are also
subject to the ETF Risks described above.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Consumer
Discretionary Sector Risk.
The
Fund may invest in companies in the consumer discretionary sector, and therefore
the performance of the Fund could be negatively impacted by events affecting
this sector.
The
success of consumer product manufacturers and retailers is tied closely to the
performance of domestic and international economies, interest rates, exchange
rates, competition, consumer confidence, changes in demographics and consumer
preferences. Companies in the consumer discretionary sector depend heavily on
disposable household income and consumer spending, and may be strongly affected
by social trends and marketing campaigns. These companies may be subject to
severe competition, which may have an adverse impact on their
profitability.
◦Consumer
Staples Sector Risk.
The permissibility of using various food additives and production methods, fads,
marketing campaigns, and other factors affecting consumer demand is tied closely
to the performance of companies in this sector. In particular, tobacco companies
may be adversely affected by new laws, regulations, and litigation. The consumer
staples sector may also be adversely affected by changes or trends in commodity
prices, which may be influenced or characterized by unpredictable
factors.
◦Health
Care Sector Risk. Companies in the health care sector are subject to extensive
government regulation and their profitability can be significantly affected by
restrictions on government reimbursement for medical expenses, rising costs of
medical products and services, pricing pressure (including price discounting),
limited product lines and an increased emphasis on the delivery of healthcare
through outpatient services.
◦Industrials
Sector Risk. The
industrials sector may be affected by changes in the supply of and demand for
products and services, product obsolescence, claims for environmental damage or
product liability and general economic conditions, among other
factors.
◦Information
Technology Sector Risk. Market
or economic factors impacting information technology companies and companies
that rely heavily on technological advances could have a significant effect on
the value of the Fund’s investments. The value of stocks of information
technology companies and companies that rely heavily on technology is
particularly vulnerable to rapid changes in technology product cycles, rapid
product
obsolescence,
government regulation and competition, both domestically and internationally,
including competition from foreign competitors with lower production costs.
Stocks of information technology companies and companies that rely heavily on
technology, especially those of smaller, less-seasoned companies, tend to be
more volatile than the overall market. Information technology companies are
heavily dependent on patent and intellectual property rights, the loss or
impairment of which may adversely affect
profitability.
◦Materials
Sector Risk. Companies in the materials sector
could be adversely affected by commodity price volatility, exchange rates,
import controls and increased competition. Production of industrial materials
often exceeds demand as a result of overbuilding or economic downturns, leading
to poor investment returns. Companies in the materials sector are at risk for
environmental damage and product liability claims. Companies in the materials
sector may be adversely affected by depletion of resources, technical progress,
labor relations, and government regulations.
▪Sector
Rotation Risk. Because
the Index generally only changes its exposure to certain sectors semi-annually,
the Index, and consequently the Fund, may be significantly exposed for short or
long periods of time to sectors that underperform the broader equity market and
may have no exposure to the strongest performing sectors of the
market.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index. To the extent the Fund calculates its NAV based on
fair value prices and the value of the Index is based on securities’ closing
prices on local foreign markets (i.e., the value of the Index is not based on fair value prices), the
Fund’s ability to track the Index may be adversely affected.
Fund
Performance
Performance information for the Fund is not
included because the Fund did not commence operations prior to the date of this
Prospectus. In the future, performance information for the Fund
will be presented in this section. Updated performance information will be
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
CFRA-Stovall Equal Weight Seasonal Rotation
ETF |
Investment
Objective
The
Pacer
CFRA-Stovall Equal Weight Seasonal Rotation ETF (the “Fund”) is
an exchange traded fund (“ETF”) that seeks to track the total return
performance, before fees and expenses, of the CFRA-Stovall Equal Weight Seasonal
Rotation Index (the “Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1
Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
185% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed by CFRA (the “Index
Provider”), a leading independent investment research firm.
The
Index
The
Index uses an objective, rules-based methodology to track the performance of a
semi-annual rotation of certain sectors within the S&P 500®
Equal Weight Index (“EWI”). The S&P 500®
EWI is an equal-weighted version of the S&P 500®,
which measures the performance of the large-cap segment of the U.S. equity
market. The S&P 500®
EWI includes stocks covering all 11 Global Industry Classification Standard
(“GICS®”)
sectors, six of which are eligible for inclusion in the Index as described
below.
On
the last business day of each April, the Index is equally weighted in the
S&P 500 EWI Consumer Staples and Healthcare sectors. The Index holdings then
float until the last business day of the following October, when the Index is
reconstituted and rebalanced to an equal weighting in the S&P 500 EWI
Consumer Discretionary, Industrials, Information Technology, and Materials
sectors. The Index holdings then float until the last business day of the
following April (the next calendar year), when the Index is reconstituted and
rebalanced back to an equal weighting in the S&P 500 EWI Consumer Staples
and Healthcare sectors.
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
S&P
500®
EWI Sector Rotation Schedule |
January
1 – April 30 |
| May
1 – October 31 |
| November
1 – December 31 |
Consumer
Discretionary |
Rebalance |
Consumer
Staples |
Rebalance |
Consumer
Discretionary |
Industrials |
Industrials |
Information
Technology |
Healthcare |
Information
Technology |
Materials |
|
|
Materials |
At
the time of each reconstitution of the Index, the Index is equally weighted in
the applicable S&P 500®
EWI sectors. Within each sector allocation, the weight of each individual stock
is identical to its proportion of the applicable sector weight in the S&P
500®
EWI. For example, on the last business day of each April, the Index is
reconstituted to include the individual stock components of the S&P 500 EWI
Consumer Staples and Healthcare sectors, and the sum of the weight of the
individual stock components of the S&P 500 EWI Consumer Staples sector will
equal the sum of the weight of the individual stock components of the S&P
500 EWI Healthcare sector.
The
Fund’s Investment Strategy
The Fund
attempts to invest all, or substantially all, of its assets in the component
securities that make up the Fund’s underlying Index or in one or more ETFs that
track the performance of all or a portion of such component securities in the
same approximate proportion as in the Fund’s underlying Index.
The Fund’s investment adviser expects that, over time, the correlation between
the Fund’s performance and that of the Index, before fees and expenses, will be
95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, shares of the Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
of the Fund may
significantly reduce investment results and an investment in shares
of the Fund may not be advisable for investors who anticipate regularly making
small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market
prices.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as NYSE Arca, Inc. (the “Exchange”), and may be traded on U.S.
exchanges other than the Exchange, there can be no assurance that shares of the
Fund will trade with any volume, or at all, on any stock exchange. In stressed
market conditions, the liquidity of shares of the Fund may begin to mirror the
liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than shares of the Fund, and this could lead to
differences between the market price of the shares of the Fund and the
underlying value of those shares.
▪High
Portfolio Turnover Risk.
At times, the Fund may have a portfolio turnover rate substantially greater than
100%. A high portfolio turnover rate would result in correspondingly greater
transaction expenses, including brokerage commissions, dealer mark ups and other
transaction costs, on the sale of securities and on reinvestment in other
securities and may result in reduced performance and the distribution to
shareholders of additional capital gains for tax purposes. These factors may
negatively affect the Fund’s performance.
▪Large-Capitalization
Investing Risk. The
Fund may invest in the securities of large-capitalization companies. As a
result, the Fund’s performance may be adversely affected if securities of
large-capitalization companies underperform securities of smaller-capitalization
companies or the market as a whole. The securities of large-capitalization
companies may be relatively mature compared to smaller companies and therefore
subject to slower growth during times of economic
expansion.
▪Other
Investment Companies Risk. The Fund will incur higher and duplicative expenses when it invests
in other investment companies such as ETFs. There is also the risk that the Fund
may suffer losses due to the investment practices of the underlying funds. When
the Fund invests in other investment companies, the Fund will be subject to
substantially the same risks as those associated with the direct ownership of
securities held by such investment companies. Investments in ETFs are also
subject to the ETF Risks described above.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Consumer
Staples Sector Risk.
The permissibility of using various food additives and production methods, fads,
marketing campaigns, and other factors affecting consumer demand is tied closely
to the performance of companies in this sector. In particular, tobacco companies
may be adversely affected by new laws, regulations, and litigation. The consumer
staples sector may also be adversely affected by changes or trends in commodity
prices, which may be influenced or characterized by unpredictable
factors.
◦Health
Care Sector Risk.
Companies in the health care sector are subject to extensive government
regulation and their profitability can be significantly affected by restrictions
on government reimbursement for medical expenses,
rising
costs of medical products and services, pricing pressure (including price
discounting), limited product lines and an increased emphasis on the delivery of
healthcare through outpatient
services.
▪Sector
Rotation Risk. Because
the Index generally only changes its exposure to certain sectors semi-annually,
the Index, and consequently the Fund, may be significantly exposed for short or
long periods of time to sectors that underperform the broader equity market and
may have no exposure to the strongest performing sectors of the
market.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year, five year and since inception periods compared
with those of the Index and a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 1.19%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 17.74% (quarter ended June 30, 2020) and
the Fund’s lowest return for a
calendar quarter was -28.45% (quarter ended March 31,
2020).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
5
Years |
Since
Inception
(7/23/18) |
Pacer
CFRA-Stovall Equal Weight Seasonal ETF |
|
| |
Return
Before Taxes |
6.59% |
10.69% |
8.47% |
Return
After Taxes on Distributions |
6.27% |
10.37% |
8.15% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
4.11% |
8.46% |
6.66% |
CFRA-Stovall
Equal Weight Seasonal Rotation Index
(reflects no deduction for
fees, expenses, or taxes) |
7.42% |
11.68% |
9.38% |
S&P
500®
Index
(reflects no deduction for
fees, expenses, or taxes) |
26.29% |
15.69% |
12.16% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure representing “Return After
Taxes on
Distributions and Sale of Fund Shares”
may be higher than the other return figures for the same period. A higher
after-tax return results when a capital loss occurs upon redemption and provides
an assumed tax deduction that benefits the investor.
After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
BioThreat Strategy ETF |
Investment
Objective
The
Pacer
BioThreat Strategy ETF (the “Fund”) is an exchange traded fund
(“ETF”) that seeks to track the performance, before fees and expenses, of the
LifeSci BioThreat Strategy Index (the “Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses (expenses
that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.70% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.70% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1
Year |
3
Years |
5
Years |
10
Years |
$72 |
$224 |
$390 |
$871 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
13% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed by LifeSci Index
Partners, LLC, the Fund’s Index Provider (the “Index Provider”), which is
not affiliated with the Fund, its distributor, or Pacer Advisors, Inc., the
Fund’s investment adviser (the “Adviser”).
The
Index
The
Index is generally composed of U.S.-listed stocks of companies whose products or
services help protect against, endure, or recover from biological threats to
human health. Companies helping to protect against such threats include
those that conduct research to identify or anticipate such threats and those
developing or producing the tools necessary to detect them. Companies helping to
endure biological threats include those offering goods or services to help
individuals, organizations, businesses, and governments adapt to requirements
for social distancing or remote connectivity. Such companies may reflect a
variety of industries, ranging from the provision of consumer staples that may
be stockpiled in an emergency to critical healthcare supplies to basic energy
resources. Companies helping to recover from a biological threat include those
that support the treatment of diseases or responses to chemical or biological
attacks. The Index selects companies based on a proprietary, multi-step research
process. First, the Index Provider conducts fundamental research to identify the
most important current and emerging biological threats to human health. Such
threats may include pandemic diseases, biological warfare, food and water
safety, environmental safety, and natural
disasters.
Next,
the Index Provider utilizes publicly available information such as financial
reports and screens, corporate websites, news reports, and interviews with key
opinion leaders to identify publicly traded companies which protect against and
prepare for recovering from these threats. These companies have products,
technologies, and services that seek to:
•research
or combat pandemic diseases such as the novel coronavirus (COVID-19), Zika,
H1N1, Ebola, avian flu, and MERS;
•combat
agents of biological or chemical warfare such as anthrax, sarin gas, variola
virus, and brucellosis;
•detect
the presence of biological or chemical threats;
•enable
social distancing and increased productivity for working and shopping at
home;
•secure
national borders and ports and strengthen homeland security;
•aid
in stockpiling of products in times of natural disasters and disease outbreaks,
such as canned foods, power sources, consumer first aid kits, anti-microbial
agents, gas masks, and sterilization supplies and services; and
•test
and improve food and water safety and purity.
Finally,
the Index Provider only includes those companies with a minimum market
capitalization of $1 billion and a minimum average daily value traded for the
last six months of at least $2 million. Index components are weighted based on
their market capitalization, subject to a maximum weight of 4.9% at the time of
rebalance. The Index is reconstituted (i.e.,
components are added or removed and weights are reset based on the Index
methodology) on the third Friday of each January and rebalanced
(i.e.,
weights are reset based on the Index methodology, but no components are added or
removed) semi-annually as of the close of business on the third Friday of
each January and July. The weights are fixed as of closing prices on the second
Friday in each January and July. As of June 30, 2024, the Index was made up
of 50 companies.
The
Fund’s Investment Strategy
The
Fund attempts to invest all, or substantially all, of its assets in the
component securities that make up the Index. The Adviser expects that, over
time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index in the same approximate proportion as in the Index. However, the Fund may
use a “representative sampling” strategy, meaning it may invest in a sample of
the securities in the Index whose risk, return and other characteristics closely
resemble the risk, return and other characteristics of the Index as a whole,
when the Adviser believes it is in the best interests of the Fund (e.g.,
when replicating the Index involves practical difficulties or substantial costs,
an Index constituent becomes temporarily illiquid, unavailable, or less liquid,
or as a result of legal restrictions or limitations that apply to the Fund but
not to the Index).
The
Fund generally may invest up to 20% of its total assets (exclusive of any
collateral held from securities lending) in securities or other investments not
included in the Index, but which the Adviser believes will help the Fund track
the Index. For example, the Fund may invest in securities that are not
components of the Index to reflect various corporate actions and other changes
to the Index (such as reconstitutions, additions, and deletions).
The
Fund is non-diversified and therefore may invest a larger percentage of its
assets in the securities of a single company than diversified
funds.
To
the extent the Index concentrates (i.e., holds more than 25% of its total assets) in the securities of a
particular industry or group of related industries, the Fund will concentrate
its investments to approximately the same extent as the Index.
As of June 30, 2024, the Index was not concentrated in any industry or group of
industries.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
•Concentration
Risk. If the Index concentrates in an industry or group of industries,
the Fund’s investments may be concentrated accordingly. In such event, the value
of the Fund’s shares may rise and fall more than the value of shares of a fund
that invests in securities of companies in a broader range of industries. In
addition, at times, an industry or group of industries in which the Fund is
concentrated may be out of favor and underperform other industries or groups of
industries.
•Equity
Market Risk. The equity securities held in the Fund’s portfolio may experience
sudden, unpredictable drops in value or long periods of decline in value. This
may occur because of factors that affect securities markets generally or factors
affecting specific issuers, industries, or sectors in which the Fund invests.
The trading prices of equity securities and other instruments fluctuate in
response to a variety of factors. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of time.
•ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants, Market Makers, and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act
as Authorized Participants (“APs”). In addition, there may be a limited number
of market makers and/or liquidity providers in the marketplace. APs are
generally large institutional investors that have been authorized by the Fund’s
distributor to purchase and redeem large blocks of Shares (known as “Creation
Units”) pursuant to legal requirements by which the Fund may offer and redeem
Shares. To the extent either of the following events occur, Shares of the Fund
may trade at a material discount to NAV and possibly face delisting:
(i) APs exit the business or otherwise become unable to process Creation
Units and/or redemption orders and no other APs step forward to perform these
services, or (ii) market makers and/or liquidity providers exit the
business or significantly reduce their business activities and no other entities
step forward to perform their functions.
◦Costs
of Buying or Selling Shares. Due to the costs of buying or selling Shares, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of Shares
may significantly reduce investment results and an investment in Shares may not
be advisable for investors who anticipate regularly making small
investments.
◦Shares
May Trade at Prices Other Than NAV. As with all ETFs, Shares may be bought and sold in the secondary
market at market prices. Although it is expected that the market price of Shares
will approximate the Fund’s NAV, there may be times when the market price of
Shares is more than the NAV intra-day (premium) or less than the NAV intra-day
(discount) due to supply and demand of Shares or during periods of market
volatility. This risk is heightened in times of market volatility, periods of
steep market declines, and periods when there is limited trading activity for
Shares in the secondary market, in which case such premiums or discounts may be
significant.
◦Trading.
Although Shares are listed for trading on the Cboe BZX Exchange, Inc. (the
“Exchange”) and may be traded on U.S. exchanges other than the Exchange, there
can be no assurance that Shares will trade with any volume, or at all, on any
stock exchange. In stressed market conditions, the liquidity of Shares may
begin to mirror the liquidity of the Fund’s underlying portfolio holdings, which
can be significantly less liquid than
Shares.
•Index
Calculation Methodology Risk. The Index relies directly or indirectly on various sources of
information to assess the criteria of issuers included in the Index, including
information that may be based on assumptions and estimates. Neither the Fund,
the Index Provider, The Adviser, nor the Fund’s distributor can offer assurances
that the Index’s calculation methodology or sources of information will provide
an accurate assessment of included issuers or a correct valuation of securities,
nor can they guarantee the availability or timeliness of the production of the
Index.
•Index
Criteria Risk.
Because the methodology of the Index selects securities of issuers for
non-financial reasons, the Fund may underperform the broader equity market or
other funds that do not utilize similar criteria when selecting investments. The
performance of the Index, and consequently the Fund, will not necessarily
reflect the performance of companies that have products, technologies, and
services that prepare and protect against pandemic diseases, biological warfare,
food and water safety, environmental safety and natural
disasters.
•Large-Capitalization
Investing Risk. The Fund may invest in the securities of large-capitalization
companies. As a result, the Fund’s performance may be adversely affected if
securities of large-capitalization companies underperform securities of
smaller-capitalization companies or the market as a whole. The securities of
large-capitalization companies may be relatively mature compared to smaller
companies and therefore subject to slower growth during times of economic
expansion.
•Mid-Capitalization
Investing Risk. The Fund may invest in the securities of mid-capitalization
companies. As a result, the Fund’s performance may be adversely affected if
securities of mid-capitalization companies underperform securities of other
capitalization ranges or the market as a whole. Securities of smaller companies
trade in smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
•Non-Diversification
Risk. Although
the Fund intends to invest in a variety of securities and instruments, the Fund
is considered to be non-diversified, which means that it may invest more of its
assets in the securities of a single issuer or a smaller number of issuers than
if it were a diversified fund.
•Passive
Investment Risk.
The Fund is not actively managed, and the Adviser would not sell shares of an
equity security due to current or projected underperformance of a security,
industry, or sector, unless that security is removed from the Index or the
selling of shares of that security is otherwise required upon a reconstitution
of the Index in accordance with the Index
methodology.
•Pharmaceutical
Companies Risk. Pharmaceutical companies can be significantly affected by government
approval of products and services, government regulation and reimbursement
rates, pricing pressure (including price discounting), limited product lines,
patent expirations, and intense competition. The costs associated with
developing new drugs can be significant, and the results are unpredictable.
Newly developed drugs may be susceptible to product obsolescence due to intense
competition from new products and less costly generic products. A pharmaceutical
company’s valuation can often be based largely on the potential or actual
performance of a limited number of products and can accordingly be greatly
affected if one of its products proves, among other things, unsafe, ineffective
or unprofitable.
•Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Health
Care Sector Risk. Companies in the health care sector
are subject to extensive government regulation and their profitability can be
significantly affected by restrictions on government reimbursement for medical
expenses, rising costs of medical products and services, pricing pressure
(including price discounting), limited product lines and an increased emphasis
on the delivery of healthcare through outpatient
services.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 13.01%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 12.35% (quarter ended December 31, 2022)
and the Fund’s lowest return for a
calendar quarter was -13.25% (quarter ended June 30,
2022).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
| |
| 1
Year |
Since
Inception
(6/24/20) |
Pacer
BioThreat Strategy ETF |
| |
Return
Before Taxes |
15.67% |
9.16% |
Return
After Taxes on Distributions |
15.38% |
8.92% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
9.45% |
7.13% |
LifeSci
BioThreat Strategy Index
(reflects no deduction for
fees, expenses, or taxes) |
16.53% |
9.93% |
S&P
500®
Index
(reflects no deduction for
fees, expenses, or taxes) |
26.29% |
15.35% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. serves as investment adviser to the Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange
for a portfolio of securities (the “Deposit Securities”) and/or a designated
amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Lunt Large Cap Alternator ETF |
Investment
Objective
The
Pacer
Lunt Large Cap Alternator ETF (the “Fund”) is an exchange traded
fund (“ETF”) that seeks to track the total return performance, before fees and
expenses, of the Lunt Capital U.S. Large Cap Equity Rotation Index (the
“Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1
Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
597% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed by Lunt Capital
Management, Inc. (“Lunt Capital” or the “Index Provider”).
The
Index
The
Index uses an objective, rules-based methodology to provide exposure to
large-capitalization U.S. companies. The Index uses Lunt Capital’s proprietary
relative strength methodology to rotate between the holdings of one of two
sub-indices, the S&P 500 Low Volatility Index and the S&P 500 High Beta
Index (each, a “Sub-Index,” and together, the “Sub-Indices”),
that seek to identify the 100 components of the S&P 500 Index that most
strongly exhibit a particular trait (e.g.,
low volatility or high beta). Each Sub-Index is composed of the 100 securities
comprising the S&P 500 Index that most strongly exhibit the characteristic
screened for by the Sub-Index. The S&P 500 is a free-float weighted
index that measures the performance of the large-cap segment of the U.S. equity
market. The S&P 500 includes approximately 500 leading companies and
captures approximately 80% of the U.S. market capitalization. Accordingly, each
Sub-Index is composed of large-capitalization equity securities. S&P Opco
LLC (a subsidiary of S&P Dow Jones Indices, LLC) compiles, maintains, and
calculates the S&P 500 Index and the Sub-Indices.
The
S&P 500 Low Volatility Index is composed of the 100 securities comprising
the S&P 500
Index
that have exhibited the lowest realized volatility over the prior 12 months.
Each stock comprising the S&P 500 Low Volatility Index is
weighted
by the inverse of its volatility with the least volatile stocks receiving the
highest weights. Volatility is a statistical measurement of the magnitude of
price fluctuations in a stock’s price over time.
The
S&P 500 High Beta Index is composed of the 100 securities comprising
the S&P 500 Index that have exhibited the highest sensitivity to market
movements, or “beta,” over the prior 12 months. The weight of each stock in the
S&P 500 High Beta Index is proportionate to its beta, rather than to its
market capitalization. Beta is a measure of relative risk and is the rate of
change of a security’s price.
The
Index utilizes Lunt Capital’s proprietary relative strength analysis in its
attempt to determine which Sub-Index is likely to exhibit better price
performance than the other Sub-Index. Pursuant to this methodology, the Index
Provider calculates the “Risk Adjusted Score” for each Sub-Index. Each
Sub-Index’s “Risk-Adjusted Score” is calculated using the Sub-Index’s standard
deviation of returns over the prior 12 months. On the final trading day of each
month, the Index Provider computes the relative strength of each Sub-Index by
comparing each Sub-Index’s Risk-Adjusted Score. The Index Provider considers the
Sub-Index with the higher Risk-Adjusted Score to have the higher relative
strength. The Index is composed of the securities comprising the Sub-Index
demonstrating the greater relative strength. The Index is reconstituted and
rebalanced monthly, except when the Index methodology would not result in a
change in the Sub-Index comprising the Index at such time.
The
Fund’s Investment Strategy
Under
normal circumstances, the Fund will invest at least 80% of its net assets, plus
the amount of any borrowings for investment purposes, in securities of large cap
companies. The Fund considers a company to be a “large cap
company” at the time of purchase if it was included in the S&P 500 at any
time within the prior 12 months. The Fund’s investment adviser expects that,
over time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index.
The
Fund is considered to be non-diversified, which means that it may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Alternator
Strategy Risk. Because
the Index will be comprised of only one Sub-Index each month, the Index may be
comprised of low volatility securities during a period when such securities
underperform high beta securities, or vice versa.
◦High
Beta Risk.
High beta investing entails investing in securities that are more volatile based
on historical market index data. Volatile stocks may be subject to sharp swings
in value, and may change unpredictably, affecting the value of such equity
securities and, consequently, the value of Shares. High beta stocks are likely
to underperform the broader market during periods of rapidly declining stock
prices.
◦Low
Volatility Risk.
Low volatility investing entails investing in securities that are seen as having
a lower risk profile than the overall markets. However, a portfolio comprised of
low volatility stocks may not produce investment exposure that has lower
variability to changes in such stocks’ price levels. Low volatility stocks are
likely to underperform the broader market during periods of rapidly rising stock
prices.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources
of information will provide an accurate assessment of included components or a
correct valuation of securities, nor can they guarantee the availability or
timeliness of the production of the Index.
▪Equity
Market Risk.
The equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific issuers, industries, or sectors in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The trading prices of equity securities and other
instruments fluctuate in response to a variety of factors. The Fund’s NAV and
market price may fluctuate significantly in response to these and other factors.
As a result, an investor could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants, Market Makers, and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act
as Authorized Participants (“APs”). In addition, there may be a limited number
of market makers and/or liquidity providers in the marketplace. APs are
generally large institutional investors that have been authorized by the Fund’s
distributor to purchase and redeem large blocks of Shares (known as “Creation
Units”) pursuant to legal requirements by which the Fund may offer and redeem
Shares. To the extent either of the following events occur, Shares of the Fund
may trade at a material discount to NAV and possibly face delisting:
(i) APs exit the business or otherwise become unable to process Creation
Units and/or redemption orders and no other APs step forward to perform these
services, or (ii) market makers and/or liquidity providers exit the
business or significantly reduce their business activities and no other entities
step forward to perform their functions.
◦Costs
of Buying or Selling Shares.
Due to the costs of buying or selling Shares, including brokerage commissions
imposed by brokers and bid/ask spreads, frequent trading of Shares may
significantly reduce investment results and an investment in Shares may not be
advisable for investors who anticipate regularly making small
investments.
◦Shares
May Trade at Prices Other Than NAV. As with all ETFs, Shares may be bought and sold in the secondary
market at market prices. Although it is expected that the market price of Shares
will approximate the Fund’s NAV, there may be times when the market price of
Shares is more than the NAV intra-day (premium) or less than the NAV intra-day
(discount) due to supply and demand of Shares or during periods of market
volatility. This risk is heightened in times of market volatility, periods of
steep market declines, and periods when there is limited trading activity for
Shares in the secondary market, in which case such premiums or discounts may be
significant.
◦Trading. Although Shares are listed for
trading on the NYSE Arca, Inc. (the “Exchange”) and may be traded on U.S.
exchanges other than the Exchange, there can be no assurance that Shares will
trade with any volume, or at all, on any stock exchange. In stressed market
conditions, the liquidity of Shares may begin to mirror the liquidity of the
Fund’s underlying portfolio holdings, which can be significantly less liquid
than Shares.
▪High
Portfolio Turnover Risk. At times, the Fund may have a portfolio turnover rate substantially
greater than 100%. A high portfolio turnover rate would result in
correspondingly greater transaction expenses, including brokerage commissions,
dealer mark ups and other transaction costs, on the sale of securities and on
reinvestment in other securities and may result in reduced performance and the
distribution to shareholders of additional capital gains for tax
purposes.
▪Large-Capitalization
Investing Risk. The Fund may invest in the securities of large-capitalization
companies. As a result, the Fund’s performance may be adversely affected if
securities of large-capitalization companies underperform securities of
smaller-capitalization companies or the market as a whole. The securities of
large-capitalization companies may be relatively mature compared to smaller
companies and therefore subject to slower growth during times of economic
expansion.
▪Monthly
Exposure Risk. Because
the Index will only change its exposure monthly, (i) the Index’s exposure may be
affected by significant market movements at or near month end that are not
predictive of the market’s performance for the subsequent month and (ii) changes
to the Index’s exposure may lag a significant change in the market’s direction
(up or down) by as long as a month if such changes first take effect at or near
the beginning of a month. Such lags
between
market performance and changes to the Index’s exposure may result in significant
underperformance relative to the broader equity or fixed income
market.
▪Non-Diversification
Risk. Although the Fund intends to invest in a variety of securities and
instruments, the Fund is considered to be non-diversified, which means that it
may invest more of its assets in the securities of a single issuer or a smaller
number of issuers than if it were a diversified fund.
▪Passive
Investment Risk.
The Fund is not actively managed, and the Fund’s investment adviser would not
sell a security due to current or projected underperformance of a security,
industry, or sector, unless that security is removed from the Index or the
selling of shares of that security is otherwise required upon a reconstitution
of the Index in accordance with the Index methodology. The Fund invests in
securities included in the Index regardless of their investment merits. The Fund
does not take defensive positions under any market conditions, including
conditions that are adverse to the performance of the
Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Consumer
Staples Sector Risk.
The permissibility of using various food additives and production methods, fads,
marketing campaigns, and other factors affecting consumer demand is tied closely
to the performance of companies in this sector. In particular, tobacco companies
may be adversely affected by new laws, regulations, and litigation. The consumer
staples sector may also be adversely affected by changes or trends in commodity
prices, which may be influenced or characterized by unpredictable
factors.
◦Utilities
Sector Risk.
Utility companies are affected by supply and demand, operating costs, government
regulation, environmental factors, liabilities for environmental damage and
general civil liabilities, and rate caps or rate changes. Although rate changes
of a regulated utility usually fluctuate in approximate correlation with
financing costs, due to political and regulatory factors rate changes ordinarily
occur only following a delay after the changes in financing costs. This factor
will tend to favorably affect a regulated utility company’s earnings and
dividends in times of decreasing costs, but conversely, will tend to adversely
affect earnings and dividends when costs are rising. The value of regulated
utility equity securities may tend to have an inverse relationship to the
movement of interest rates. Certain utility companies have experienced full or
partial deregulation in recent years. These utility companies are frequently
more similar to industrial companies in that they are subject to greater
competition and have been permitted by regulators to diversify outside of their
original geographic regions and their traditional lines of business. These
opportunities may permit certain utility companies to earn more than their
traditional regulated rates of return. Some companies, however, may be forced to
defend their core business and may be less profitable. In addition, natural
disasters, terrorist attacks, government intervention or other factors may
render a utility company’s equipment unusable or obsolete and negatively impact
profitability.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 3.54%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 22.25% (quarter ended March 31, 2021) and
the Fund’s lowest return for a
calendar quarter was -12.24% (quarter ended September 30,
2022.
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
| |
| 1
Year |
Since
Inception
(6/24/20) |
Pacer
Lunt Large Cap Alternator ETF |
| |
Return
Before Taxes |
-15.88% |
12.01% |
Return
After Taxes on Distributions |
-16.12% |
11.66% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
-9.23% |
9.45% |
Lunt
Capital U.S. Large Cap Equity Rotation Index
(reflects no deduction for
fees, expenses, or taxes) |
-15.29% |
12.93% |
S&P
500®
Index
(reflects no deduction for
fees, expenses, or taxes) |
26.29% |
15.35% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange
for a portfolio of securities (the “Deposit Securities”) and/or a designated
amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Lunt MidCap Multi-Factor Alternator
ETF |
Investment
Objective
The
Pacer
Lunt MidCap Multi-Factor Alternator ETF (the “Fund”) is an
exchange traded fund (“ETF”) that seeks to track the total return performance,
before fees and expenses, of the Lunt Capital U.S. MidCap Multi-Factor Rotation
Index (the “Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1
Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
367% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed by Lunt Capital
Management, Inc. (“Lunt Capital” or the “Index Provider”).
The
Index
The
Index uses an objective, rules-based methodology to provide exposure to
mid-capitalization U.S. companies. The Index uses Lunt Capital’s proprietary
relative strength methodology to rotate between the holdings of the highest and
lowest quintile components of four factor-based indices of the S&P MidCap
400 Index (each, a “Sub-Index,” and together, the “Sub-Indices”), that seek to
identify the components of the S&P MidCap 400 Index that most strongly
exhibit a particular factor. The four factor groups are Momentum, Quality,
Value, and Volatility.
The
Index will include holdings for two of the following eight
Sub-Indices:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Momentum |
Quality |
Value |
Volatility |
Highest
Quintile |
S&P
MidCap 400 Momentum Index |
S&P
MidCap 400 Quality Index |
S&P
MidCap 400 Enhanced Value Index |
S&P
MidCap 400 Volatility - Highest Quintile Index |
Lowest
Quintile |
S&P
MidCap 400 Momentum - Lowest Quintile Index |
S&P
MidCap 400 Quality - Lowest Quintile Index |
S&P
MidCap 400 Enhanced Value - Lowest Quintile Index |
S&P
MidCap 400 Low Volatility Index |
Each
Sub-Index is composed of the 80 securities (a quintile) comprising the S&P
MidCap 400 Index that most strongly exhibit the characteristic screened for by
the Sub-Index. The S&P MidCap 400 Index is a market-weighted index and
measures the performance of mid-capitalization stocks in the United States.
S&P Opco LLC (a subsidiary of S&P Dow Jones Indices, LLC) compiles,
maintains, and calculates the S&P MidCap 400 Index and the
Sub-Indices.
The
Index utilizes Lunt Capital’s proprietary relative strength analysis in its
attempt to determine which two Sub-Indices are likely to exhibit better price
performance than the other Sub-Indices. Pursuant to this methodology, the Index
Provider calculates the “Risk Adjusted Score” for each Sub-Index. On the final
trading day of each month, the Index Provider computes the relative strength of
each Sub-Index by comparing each Sub-Index’s Risk-Adjusted Score. The Index
Provider considers a higher Risk-Adjusted Score to indicate greater relative
strength. The Index is composed of the securities comprising the two Sub-Indices
demonstrating the greatest relative strength unless such Sub-Indices include
both the highest and lowest quintile from the same factor group, in which case
only the Sub-Indices with the highest and third-highest Risk-Adjusted Score
would be selected. The Index is reconstituted and rebalanced monthly, except
when the Index methodology would not result in a change in the Sub-Indices
comprising the Index at such time.
The
Fund’s Investment Strategy
Under
normal circumstances, the Fund will invest at least 80% of its net assets, plus
the amount of any borrowings for investment purposes, in securities of mid cap
companies. The Fund considers a a company to be a “mid cap
company” at the time of purchase if it was included in the S&P MidCap 400 at
any time within the prior 12 months. The Fund’s investment adviser expects that,
over time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index.
The
Fund is considered to be non-diversified, which means that it may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Alternator
Strategy Risk. Because
the Index will be comprised of only two Sub-Indices each month, the Index may be
comprised of securities during a period when such securities underperform the
securities of one or more other
Sub-Indices.
◦Low
Volatility Risk.
Low volatility investing entails investing in securities that are seen as having
a lower risk profile than the overall markets. However, a portfolio comprised of
low volatility stocks may not produce investment exposure that has lower
variability to changes in such stocks’ price levels. Low volatility stocks are
likely to underperform the broader market during periods of rapidly rising stock
prices.
◦Momentum
Investing Risk. Momentum
investing is subject to the risk that the securities may be more volatile than
the market as a whole, or that the returns on securities that previously have
exhibited price momentum or proximity to price peaks are less than returns on
other styles of investing. Momentum can turn quickly, and stocks
that previously have exhibited high momentum may not experience
continued positive momentum. In addition, investor perceptions of the value of a
company may turn quickly, and stocks that have recently set multiple price peaks
may not continue to do so, may be considered overvalued, and may decline faster
than other investments.
◦Quality
Investing Risk. Securities that have previously been identified with quality
characteristics may not continue to be quality companies, and the returns of
such securities may be less than returns on other styles of investing. In
addition, there may be periods when the quality style of investing is out of
favor and therefore, the performance of the Fund may suffer.
◦Value
Investing Risk. A “value” style of investing
could produce poor results relative to other funds, even in a rising market, if
the methodology used by the Index to determine a company’s “value” or prospects
for exceeding earnings expectations or market conditions is wrong. In addition,
“value stocks” can continue to be undervalued by the market for long periods of
time.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
The Adviser, nor the Fund’s distributor can offer assurances that the Index’s
calculation methodology or sources of information will provide an accurate
assessment of included issuers or a correct valuation of securities, nor can
they guarantee the availability or timeliness of the production of the
Index.
▪Equity
Market Risk.
The equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific issuers, industries, or sectors in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The trading prices of equity securities and other
instruments fluctuate in response to a variety of factors. The Fund’s NAV and
market price may fluctuate significantly in response to these and other factors.
As a result, an investor could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants, Market Makers, and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act
as Authorized Participants (“APs”). In addition, there may be a limited number
of market makers and/or liquidity providers in the marketplace. APs are
generally large institutional investors that have been authorized by the Fund’s
distributor to purchase and redeem large blocks of Shares (known as “Creation
Units”) pursuant to legal requirements by which the Fund may offer and redeem
Shares. To the extent either of the following events occur, Shares of the Fund
may trade at a material discount to NAV and possibly face delisting:
(i) APs exit the business or otherwise become unable to process Creation
Units and/or redemption orders and no other APs step forward to perform these
services, or (ii) market makers and/or liquidity providers exit the
business or significantly reduce their business activities and no other entities
step forward to perform their functions.
◦Costs
of Buying or Selling Shares.
Due to the costs of buying or selling Shares, including brokerage commissions
imposed by brokers and bid/ask spreads, frequent trading of Shares may
significantly reduce investment results and an investment in Shares may not be
advisable for investors who anticipate regularly making small
investments.
◦Shares
May Trade at Prices Other Than NAV. As with all ETFs, Shares may be bought and sold in the secondary
market at market prices. Although it is expected that the market price of Shares
will approximate the Fund’s NAV, there may be times when the market price of
Shares is more than the NAV intra-day (premium) or less than the NAV intra-day
(discount) due to supply and demand of Shares or during periods of market
volatility. This risk is heightened in times of market volatility, periods of
steep market declines, and periods when there is limited trading activity for
Shares in the secondary market, in which case such premiums or discounts may be
significant.
◦Trading.
Although Shares are listed for trading on the NYSE Arca, Inc. (the “Exchange”)
and may be traded on U.S. exchanges other than the Exchange, there can be no
assurance that Shares will trade with any volume, or at all, on any stock
exchange. In stressed market conditions, the liquidity of Shares may begin
to mirror the liquidity of the Fund’s underlying portfolio holdings, which can
be significantly less liquid than
Shares.
▪High
Portfolio Turnover Risk. At times, the Fund may have a portfolio turnover rate substantially
greater than 100%. A high portfolio turnover rate would result in
correspondingly greater transaction expenses, including brokerage commissions,
dealer mark ups and other transaction costs, on the sale of securities and on
reinvestment in other securities and may result in reduced performance and the
distribution to shareholders of additional capital gains for tax
purposes.
▪Mid-Capitalization
Investing Risk. The Fund may invest in the securities of mid-capitalization
companies. As a result, the Fund’s performance may be adversely affected if
securities of mid-capitalization companies underperform securities of other
capitalization ranges or the market as a whole. Securities of smaller companies
trade in smaller volumes and are often more vulnerable to market volatility than
securities of larger companies.
▪Non-Diversification
Risk. Although the Fund intends to invest in a variety of securities and
instruments, the Fund is considered to be non-diversified, which means that it
may invest more of its assets in the securities of a single issuer or a smaller
number of issuers than if it were a diversified fund.
▪Passive
Investment Risk.
The Fund is not actively managed, and the Fund’s investment adviser would not
sell a security due to current or projected underperformance of a security,
industry, or sector, unless that security is removed from the Index or the
selling of shares of that security is otherwise required upon a reconstitution
of the Index in accordance with the Index methodology. The Fund invests in
securities included in the Index regardless of their investment merits. The Fund
does not take defensive positions under any market conditions, including
conditions that are adverse to the performance of the
Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Industrials
Sector Risk. The
industrials sector may be affected by changes in the supply of and demand for
products and services, product obsolescence, claims for environmental damage or
product liability and general economic conditions, among other
factors.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 18.79%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 12.59% (quarter ended December 31, 2022)
and the Fund’s lowest return for a
calendar quarter was -15.39% (quarter ended June 30,
2022).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
| |
| 1
Year |
Since
Inception
(6/24/20) |
Pacer
Lunt Midcap Multi-Factor Alternator ETF |
| |
Return
Before Taxes |
19.28% |
14.28% |
Return
After Taxes on Distributions |
19.07% |
14.08% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
11.52% |
11.26% |
Lunt
Capital U.S. MidCap Multi-Factor Rotation Index
(reflects no deduction for
fees, expenses, or taxes) |
20.35% |
15.33% |
S&P
MidCap 400®
Index
(reflects no deduction for
fees, expenses, or taxes) |
16.44% |
16.19% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Lunt Large Cap Multi-Factor Alternator
ETF |
Investment
Objective
The
Pacer
Lunt Large Cap Multi-Factor Alternator ETF (the “Fund”) is an
exchange traded fund (“ETF”) that seeks to track the total return performance,
before fees and expenses, of the Lunt Capital U.S. Large Cap Multi-Factor
Rotation Index (the “Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1
Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the Fund’s portfolio turnover rate was
417% of the average
value of its portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index is based on a proprietary methodology developed by Lunt Capital
Management, Inc. (“Lunt Capital” or the “Index Provider”).
The
Index
The
Index uses an objective, rules-based methodology to provide exposure to
large-capitalization U.S. companies. The Index uses Lunt Capital’s proprietary
relative strength methodology to rotate between the holdings of the highest and
lowest quintile components of four factor-based indices of the S&P 500 Index
(each, a “Sub-Index,” and together, the “Sub-Indices”), that seek to identify
the components of the S&P 500 Index that most strongly exhibit a particular
factor. The four factor groups are Momentum, Quality, Value, and
Volatility.
The
Index will include holdings for two of the following eight
Sub-Indices:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Momentum |
Quality |
Value |
Volatility |
Highest
Quintile |
S&P
500 Momentum Index |
S&P
500 Quality Index |
S&P
500 Enhanced Value Index |
S&P
500 Volatility - Highest Quintile Index |
Lowest
Quintile |
S&P
500 Momentum - Lowest Quintile Index |
S&P
500 Quality - Lowest Quintile Index |
S&P
500 Enhanced Value - Lowest Quintile Index |
S&P
500 Low Volatility Index |
Each
Sub-Index is composed of the 100 securities (a quintile) comprising the S&P
500 Index that most strongly exhibit the characteristic screened for by the
Sub-Index. The S&P 500 is a free-float weighted index that measures the
performance of the large-cap segment of the U.S. equity market. The S&P
500 includes approximately 500 leading companies and captures approximately
80% of the U.S. market capitalization. S&P Opco LLC (a subsidiary of S&P
Dow Jones Indices, LLC) compiles, maintains, and calculates the S&P 500
Index and the Sub-Indices.
The
Index utilizes Lunt Capital’s proprietary relative strength analysis in its
attempt to determine which two Sub-Indices are likely to exhibit better price
performance than the other Sub-Indices. Pursuant to this methodology, the Index
Provider calculates the “Risk Adjusted Score” for each Sub-Index. On the final
trading day of each month, the Index Provider computes the relative strength of
each Sub-Index by comparing each Sub-Index’s Risk-Adjusted Score. The Index
Provider considers a higher Risk-Adjusted Score to indicate greater relative
strength. The Index is composed of the securities comprising the two Sub-Indices
demonstrating the greatest relative strength unless such Sub-Indices include
both the highest and lowest quintile from the same factor group, in which case
only the Sub-Indices with the highest and third-highest Risk-Adjusted Score
would be selected. The Index is reconstituted and rebalanced monthly, except
when the Index methodology would not result in a change in the Sub-Indices
comprising the Index at such time.
The
Fund’s Investment Strategy
Under
normal circumstances, the Fund will invest at least 80% of its net assets, plus
the amount of any borrowings for investment purposes, in securities of large cap
companies. The Fund considers a a company to be a “large cap
company” at the time of purchase if it was included in the S&P 500 at any
time within the prior 12 months. The Fund’s investment adviser expects that,
over time, the correlation between the Fund’s performance and that of the Index,
before fees and expenses, will be 95% or better.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index.
The
Fund is considered to be non-diversified, which means that it may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Alternator
Strategy Risk. Because
the Index will be comprised of only two Sub-Indices each month, the Index may be
comprised of securities during a period when such securities underperform the
securities of one or more other
Sub-Indices.
◦Low
Volatility Risk. Low volatility investing entails investing in securities that are
seen as having a lower risk profile than the overall markets. However, a
portfolio comprised of low volatility stocks may not produce investment exposure
that has lower variability to changes in such stocks’ price levels. Low
volatility stocks are likely to underperform the broader market during periods
of rapidly rising stock prices.
◦Momentum
Investing Risk. Momentum
investing is subject to the risk that the securities may be more volatile than
the market as a whole, or that the returns on securities that previously have
exhibited price momentum or
proximity to price peaks are less than returns on other styles of
investing. Momentum can turn quickly, and stocks that previously have exhibited
high momentum may not experience continued positive momentum. In addition,
investor perceptions of the value of a company may turn quickly, and stocks that
have recently set multiple price peaks may not continue to do so, may be
considered overvalued, and may decline faster than other
investments.
◦Quality
Investing Risk. Securities that have previously been identified with quality
characteristics may not continue to be quality companies, and the returns of
such securities may be less than returns on other styles of investing. In
addition, there may be periods when the quality style of investing is out of
favor and therefore, the performance of the Fund may suffer.
◦Value
Investing Risk. A “value” style of investing
could produce poor results relative to other funds, even in a rising market, if
the methodology used by the Index to determine a company’s “value” or prospects
for exceeding earnings expectations or market conditions is wrong. In addition,
“value stocks” can continue to be undervalued by the market for long periods of
time.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Equity
Market Risk.
The equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific issuers, industries, or sectors in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The trading prices of equity securities and other
instruments fluctuate in response to a variety of factors. The Fund’s NAV and
market price may fluctuate significantly in response to these and other factors.
As a result, an investor could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants, Market Makers, and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act
as Authorized Participants (“APs”). In addition, there may be a limited number
of market makers and/or liquidity providers in the marketplace. APs are
generally large institutional investors that have been authorized by the Fund’s
distributor to purchase and redeem large blocks of Shares (known as “Creation
Units”) pursuant to legal requirements by which the Fund may offer and redeem
Shares. To the extent either of the following events occur, Shares of the Fund
may trade at a material discount to NAV and possibly face delisting:
(i) APs exit the business or otherwise become unable to process Creation
Units and/or redemption orders and no other APs step forward to perform these
services, or (ii) market makers and/or liquidity providers exit the
business or significantly reduce their business activities and no other entities
step forward to perform their functions.
◦Costs
of Buying or Selling Shares.
Due to the costs of buying or selling Shares, including brokerage commissions
imposed by brokers and bid/ask spreads, frequent trading of Shares may
significantly reduce investment results and an investment in Shares may not be
advisable for investors who anticipate regularly making small
investments.
◦Shares
May Trade at Prices Other Than NAV. As with all ETFs, Shares may be bought and sold in the secondary
market at market prices. Although it is expected that the market price of Shares
will approximate the Fund’s NAV, there may be times when the market price of
Shares is more than the NAV intra-day (premium) or less than the NAV intra-day
(discount) due to supply and demand of Shares or during periods of market
volatility. This risk is heightened in times of market volatility, periods of
steep market declines, and periods when there is limited trading activity for
Shares in the secondary market, in which case such premiums or discounts may be
significant.
◦Trading.
Although Shares are listed for trading on the NYSE Arca, Inc. (the “Exchange”)
and may be traded on U.S. exchanges other than the Exchange, there can be no
assurance that Shares will trade with any volume, or at
all,
on any stock exchange. In stressed market conditions, the liquidity of
Shares may begin to mirror the liquidity of the Fund’s underlying portfolio
holdings, which can be significantly less liquid than
Shares.
▪High
Portfolio Turnover Risk. At times, the Fund may have a portfolio turnover rate substantially
greater than 100%. A high portfolio turnover rate would result in
correspondingly greater transaction expenses, including brokerage commissions,
dealer mark ups and other transaction costs, on the sale of securities and on
reinvestment in other securities and may result in reduced performance and the
distribution to shareholders of additional capital gains for tax
purposes.
▪Large-Capitalization
Investing Risk. The Fund may invest in the securities of large-capitalization
companies. As a result, the Fund’s performance may be adversely affected if
securities of large-capitalization companies underperform securities of
smaller-capitalization companies or the market as a whole. The securities of
large-capitalization companies may be relatively mature compared to smaller
companies and therefore subject to slower growth during times of economic
expansion.
▪Non-Diversification
Risk. Although the Fund intends to invest in a variety of securities and
instruments, the Fund is considered to be non-diversified, which means that it
may invest more of its assets in the securities of a single issuer or a smaller
number of issuers than if it were a diversified fund.
▪Passive
Investment Risk.
The Fund is not actively managed, and the Fund’s investment adviser would not
sell a security due to current or projected underperformance of a security,
industry, or sector, unless that security is removed from the Index or the
selling of shares of that security is otherwise required upon a reconstitution
of the Index in accordance with the Index methodology. The Fund invests in
securities included in the Index regardless of their investment merits. The Fund
does not take defensive positions under any market conditions, including
conditions that are adverse to the performance of the
Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Information
Technology Sector Risk. The
Fund may invest in companies in the information technology sector, and therefore
the performance of the Fund could be negatively impacted by events affecting
this sector. Market or economic factors impacting information technology
companies and companies that rely heavily on technological advances could have a
significant effect on the value of the Fund’s investments. The value of stocks
of information technology companies and companies that rely heavily on
technology is particularly vulnerable to rapid changes in technology product
cycles, rapid product obsolescence, government regulation and competition, both
domestically and internationally, including competition from foreign competitors
with lower production costs. Stocks of information technology companies and
companies that rely heavily on technology, especially those of smaller,
less-seasoned companies, tend to be more volatile than the overall market.
Information technology companies are heavily dependent on patent and
intellectual property rights, the loss or impairment of which may adversely
affect profitability.
▪Tracking
Risk. The
Fund’s return may not track the return of the Index for a number of reasons. For
example, the Fund incurs a number of operating expenses not applicable to the
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund’s securities holdings to reflect changes in the composition
of the Index.
In
addition, when the Fund uses a representative sampling approach, the Fund may
not be as well correlated with the return of the Index as when the Fund
purchases all of the securities in the Index in the proportions in which they
are represented in the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 19.15%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 20.47% (quarter ended March 31, 2021) and
the Fund’s lowest return for a
calendar quarter was -11.72% (quarter ended June 30,
2022).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
| |
| 1
Year |
Since
Inception
(6/24/20) |
Pacer
Lunt Large Cap Multi-Factor Alternator ETF |
| |
Return
Before Taxes |
17.33% |
17.10% |
Return
After Taxes on Distributions |
17.10% |
16.79% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
10.39% |
13.55% |
Lunt
Capital U.S. Large Cap Multi-Factor Rotation Index
(reflects no deduction for
fees, expenses, or taxes) |
18.25% |
18.04% |
S&P
500®
Index
(reflects no deduction for
fees, expenses, or taxes) |
26.29% |
15.35% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund. Mr.
Kavanaugh has served as a portfolio manager since the Fund’s inception and Mr.
Wang has served as a portfolio manager since June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange
for a portfolio of securities (the “Deposit Securities”) and/or a designated
amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
|
| |
Pacer
Pacific Asset Floating Rate High Income
ETF |
Investment
Objective
The Pacer Pacific Asset Floating Rate High Income
ETF (the “Fund”) is an exchange traded fund (“ETF”) that seeks
to provide a high level of current income.
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1
Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the portfolio turnover rate for the
Fund was 43% of the average value of its
portfolio.
Principal Investment
Strategies of the Fund
Aristotle
Pacific Capital, LLC (the “Sub-Adviser”) seeks to achieve the Fund’s investment
objective by selecting a focused portfolio comprised primarily of
income-producing adjustable rate securities.
Under
normal circumstances, the Fund will invest at least 80% of its net assets (plus
any borrowings for investment purposes) in senior secured floating rate loans
and other adjustable rate securities. Other adjustable rate
securities will typically include collateralized loan obligations (“CLOs”),
asset-backed securities (“ABS”), and commercial mortgage backed securities
(“CMBS”) (collectively, “Adjustable Rate Securities”). The Fund is expected to
invest primarily in loans and Adjustable Rate Securities that are rated below
investment grade (i.e.,
high yield securities, sometimes called “junk bonds” or non-investment grade
securities) or, if unrated, of comparable quality as determined by the
Sub-Adviser.
The
Fund may invest in U.S.-dollar denominated senior floating rate loans and
Adjustable Rate Securities of domestic and foreign issuers. Senior floating rate
loans are debt instruments that may have a right to payment that is senior to
most other debts of borrowers. Borrowers may include corporations, partnerships
and other entities that operate in a variety of industries and geographic
regions, which may from time to time prepay their loan obligations in response,
for example, to changes in interest rates. Senior loans in which the Fund may
invest include secured and unsecured loans. Generally, secured floating rate
loans are secured by specific assets of the borrower. An adjustable rate
security includes any fixed income security that requires periodic changes in
its interest rate based upon changes in a recognized index interest rate or
another method of determining prevailing interest rates. The Fund invests in
various types of ABS, such as auto loan and student loan ABS. The Fund is
actively managed.
The
Fund may invest up to 20% of its assets in certain other types of debt
instruments or securities, including corporate bonds (including floating rate
investment grade bonds) and secured or unsecured second lien floating rate
loans. Second lien loans generally are second in line behind senior loans in
terms of prepayment priority with respect to pledged collateral and therefore
have a lower credit quality as compared to senior loans but may produce a higher
yield to compensate for the additional risk.
The
secondary market on which high yield securities are traded may be less liquid
than the market for investment-grade securities. Less liquidity in the secondary
trading market could adversely affect the ability of the Fund to sell a high
yield security or the price at which the Fund could sell a high yield security,
and could adversely affect the daily NAV of Fund shares. When secondary markets
for high yield securities are less liquid than the market for investment-grade
securities, it may be more difficult to value the securities because such
valuation may require more research, and elements of judgment may play a greater
role in the valuation because there is less reliable, objective data available.
The Fund may invest up to an aggregate amount of 15% of its net assets in
illiquid investments, as such term is defined by Rule 22e-4 under the Investment
Company Act of 1940, as amended (the “1940 Act”).
When the Sub-Adviser believes that current market, economic,
political or other conditions are unsuitable and would impair the pursuit of the
Fund’s investment objectives, the Fund may invest some or all of its assets in
cash or cash equivalents, including but not limited to obligations of the U.S.
government, money market fund shares, commercial paper, certificates of deposit
and/or bankers acceptances, as well as other interest bearing or discount
obligations or debt instruments that carry an investment grade rating by a
national rating agency. When the Fund takes a temporary defensive position, the
Fund may not achieve its investment objectives. The Fund may invest from time to
time more heavily in one or more sectors of the economy than in other
sectors.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Fund.”
•Floating
Rate Loan Risk.
Floating rate loans (or bank loans) are usually rated below investment grade.
The market for floating rate loans may be subject to irregular trading activity,
wide bid/ask spreads, and extended trade settlement periods. Investments in
floating rate loans are typically in the form of an assignment or participation.
Investors in a loan participation assume the credit risk associated with the
borrower and may assume the credit risk associated with an interposed financial
intermediary. Accordingly, if a lead lender becomes insolvent or a loan is
foreclosed, the Fund could experience delays in receiving payments or suffer a
loss. In an assignment, the Fund effectively becomes a lender under the loan
agreement with the same rights and obligations as the assigning bank or other
financial intermediary. Accordingly, if the loan is foreclosed, the Fund could
become part owner of any collateral, and would bear the costs and liabilities
associated with owning and disposing of the collateral. In addition, the
floating rate feature of loans means that floating rate loans will not generally
experience capital appreciation in a declining interest rate environment.
Declines in interest rates may also increase prepayments of debt obligations and
require the Fund to invest assets at lower yields. Floating rate loans are also
subject to prepayment risk. Such loans may not be considered securities and,
therefore, may not be afforded the protections of the federal securities
laws.
◦Senior
Loans Risk. The
risks associated with senior loans are similar to the risks of junk bonds,
although senior loans typically are senior and secured, whereas junk bonds often
are subordinated and unsecured. Investments in senior loans typically are below
investment grade and are considered speculative because of the credit risk of
their issuers. Such companies are more likely to default on their payments of
interest and principal owed, and such defaults could reduce the Fund’s NAV and
income distributions. An economic downturn generally leads to a higher
nonpayment rate, and a senior loan may lose significant value before a default
occurs. There is no assurance that the liquidation of the collateral would
satisfy the claims of the borrower’s obligations in the event of the non-payment
of scheduled interest or principal, or that the collateral could be readily
liquidated. Economic and other events (whether real or perceived) can reduce the
demand for certain senior loans or senior loans generally, which may reduce
market prices. Senior loans and other debt securities also are subject to the
risk of price declines and to increases in prevailing interest rates, although
floating-rate debt instruments such as senior loans in which the Fund may be
expected to invest are substantially less exposed to this risk than fixed-rate
debt instruments. No active trading market may exist for certain senior loans,
which may impair the ability of the Fund to realize full value in the event of
the need to liquidate such assets. Adverse
market
conditions may impair the liquidity of some actively traded senior loans. Longer
interest rate reset periods generally increase fluctuations in value as a result
of changes in market interest rates.
◦Covenant-Lite
Loan Risk.
Covenant-lite loans contain fewer maintenance covenants, or no maintenance
covenants at all, than traditional loans and may not include terms that allow
the lender to monitor the financial performance of the borrower and declare a
default if certain criteria are breached. This may hinder the Fund’s ability to
reprice credit risk associated with the borrower and reduce the Fund’s ability
to restructure a problematic loan and mitigate potential loss. As a result, the
Fund’s exposure to losses on such investments is increased, especially during a
downturn in the credit cycle. A significant portion of floating rate loans may
be “covenant-lite” loans.
◦Loan
Participation Risk.
The Fund may not have a readily available market for loan participation
interests and, in some cases, the Fund may have to dispose of such securities at
a substantial discount from face value. Loan participations also involve the
credit risk associated with the underlying corporate
borrower.
•CLO
Risk. CLOs
are typically collateralized by a pool of loans, which may include, among
others, domestic and foreign senior secured loans, senior unsecured loans, and
subordinate corporate loans, including loans that may be rated below investment
grade or equivalent unrated loans. The cash flows from CLOs are split into two
or more portions, called tranches, varying in risk and yield. CLO tranches can
experience substantial losses due to actual defaults, increased sensitivity to
defaults due to collateral default and disappearance of protecting tranches as
well as market anticipation of defaults.
•Asset-Backed
Securities Risk. Asset-backed
securities represent interests in “pools” of assets, including consumer loans or
receivables. Movements in interest rates (both increases and decreases) may
quickly and significantly reduce the value of certain types of asset-backed
securities. Although certain asset-backed securities are guaranteed as to timely
payment of interest and principal by a government entity, the market price for
such securities is not guaranteed and will fluctuate. The purchase of
asset-backed securities issued by non-government entities may entail greater
risk than such securities that are issued or guaranteed by a government entity.
Asset-backed securities issued by non-government entities may offer higher
yields than those issued by government entities, but may also be subject to
greater volatility than government issues and can also be subject to greater
credit risk and the risk of default on the underlying assets. Investments in
asset-backed securities are subject to both extension risk, where borrowers pay
off their debt obligations more slowly in times of rising interest rates, and
prepayment risk, where borrowers pay off their debt obligations sooner than
expected in times of declining interest rates.
•CMBS
Risk. The
Fund may invest in CMBS. CMBS are not backed by the full faith and credit of the
U.S. government and are subject to risk of default on the underlying mortgages.
The value of the collateral securing CMBS may decline, be insufficient to meet
the obligations of the borrower, or be difficult to liquidate. As a result, CMBS
may not be fully collateralized and may decline significantly in value. In
addition, commercial mortgage loans are secured by commercial property and are
subject to risks of delinquency and foreclosure, and risks of loss. In the event
of any default under a mortgage, the Fund will bear a risk of loss of principal
to the extent of any deficiency between the value of the collateral and the
principal and accrued interest of the commercial mortgage loan. Stressed
conditions in the markets for CMBS and mortgage-related assets as well as the
broader financial markets have in the past resulted in a temporary but
significant contraction in liquidity for CMBS. To the extent that the market for
CMBS suffers such a contraction, securities that were previously considered
liquid could become temporarily illiquid, and the Adviser may experience delays
or difficulty in selling assets at the prices at which the Fund carries such
assets, which may result in a loss to the Fund.
•High
Yield Securities Risk.
High yield debt obligations (commonly known as “junk bonds”) are speculative
investments and entail greater risk of loss of principal than securities and
loans that are investment grade rated because of their greater exposure to
credit risk. The high yield market at times is subject to substantial volatility
and high yield debt obligations may be less liquid than higher quality
securities. As a result, the value of the Fund may be subject to greater
volatility than other funds, and the Fund may be exposed to greater tracking
risk (described below) than other funds.
•Fixed
Income Risk.
Generally, the value of fixed income securities will change inversely with
changes in interest rates. As interest rates rise, the market value of fixed
income securities tends to decrease. Conversely, as interest rates fall, the
market value of fixed income securities tends to increase. This risk will be
greater for long-term securities than for short-term securities. In recent
periods, governmental financial regulators, including the U.S. Federal Reserve,
have taken steps to increase interest rates. Changes in government intervention
may have adverse effects on investments, volatility, and the liquidity of debt
markets.
◦Call
Risk. During periods of falling interest rates, an issuer of a callable
bond held by the Fund may “call” or repay the security prior to its stated
maturity, and the Fund may have to reinvest the proceeds at lower interest
rates, resulting in a decline in the Fund’s income.
◦Credit
Risk.
Credit risk refers to the possibility that the issuer of a security will not be
able to make payments of interest and principal when due. Changes in an issuer’s
credit rating or the market’s perception of an issuer’s creditworthiness may
also affect the value of an investment in that issuer. Credit risk is heightened
to the extent the Fund invests in non-investment grade
securities.
◦Event
Risk. Event risk is the risk that corporate issuers may undergo
restructurings, such as mergers, leveraged buyouts, takeovers, or similar events
financed by increased debt. As a result of the added debt, the credit quality
and market value of a company’s bonds and/or other debt securities may decline
significantly.
◦Extension
Risk. When interest rates rise, certain obligations will be paid off by
the obligor more slowly than anticipated, causing the value of these securities
to fall.
◦Interest
Rate Risk. Generally, the value of fixed income securities will change
inversely with changes in interest rates. As interest rates rise, the market
value of fixed income securities tends to decrease. Conversely, as interest
rates fall, the market value of fixed income securities tends to increase. This
risk will be greater for long-term securities than for short-term securities.
Changes in government intervention may have adverse effects on investments,
volatility, and illiquidity in debt markets.
◦Prepayment
Risk.
When interest rates fall, certain obligations will be paid off by the obligor
more quickly than originally anticipated, and the proceeds may have to be
invested in securities with lower yields. The Fund investing in such securities
will be forced to reinvest this money at lower yields, which can reduce the
Fund’s returns.
◦Income
Risk.
The income from the Fund’s investments may decline because of falling market
interest rates. This can result when the Fund invests the proceeds from new
share sales, or from matured or called bonds, at market interest rates that are
below the Fund’s portfolio current earnings
rate.
•Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign securities.
Markets and economies throughout the world are becoming increasingly
interconnected, and conditions or events in one market, country or region may
adversely impact investments or issuers in another market, country or
region.
•Market
Risk.
An investment in the Fund involves risks similar to those of investing in any
fund of equity securities, such as market fluctuations caused by such factors as
economic and political developments, changes in interest rates and perceived
trends in securities prices. The values of equity securities could decline
generally or could underperform other investments. Different types of equity
securities tend to go through cycles of out-performance and under-performance in
comparison to the general securities markets. In addition, securities may
decline in value due to factors affecting the securities markets generally or a
specific issuer or market. The Fund is subject to the risk that its investment
strategy, the implementation of which is subject to a number of constraints, may
not produce the intended results. Market risk refers to the possibility that the
market values of securities or other investments that the Fund holds will fall,
sometimes rapidly or unpredictably, or fail to rise. Security values may fall or
fail to rise because of a variety of actual or perceived factors affecting an
issuer (e.g.,
an unfavorable earnings report), the industry or sector in which it operates, or
the market as a whole, which may reduce the value of an investment in the Fund.
Accordingly, an
investment
in the Fund could lose money over short or long periods. The market values of
the securities the Fund holds can be affected by changes or perceived changes in
U.S. or foreign economies and financial markets, and the liquidity of these
securities, among other factors. Although equity securities generally tend to
have greater price volatility than debt securities, under certain market
conditions, debt securities may have comparable or greater price volatility. In
addition, stock prices may be sensitive to rising interest rates, as the cost of
capital rises and borrowing costs increase.
•ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act
as APs. In addition, there may be a limited number of market makers and/or
liquidity providers in the marketplace. To the extent either of the following
events occur, shares of the Fund may trade at a material discount to NAV and
possibly face delisting: (i) APs exit the business or otherwise become
unable to process creation and/or redemption orders and no other APs step
forward to perform these services, or (ii) market makers and/or liquidity
providers exit the business or significantly reduce their business activities
and no other entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares of the Fund. Due to the costs of buying or selling shares of the Fund, including
brokerage commissions imposed by brokers and bid/ask spreads, frequent trading
of shares of the Fund may significantly reduce investment results and an
investment in shares of the Fund may not be advisable for investors who
anticipate regularly making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which case such premiums or discounts may be significant. Shares of
the Fund will be bought and sold in the secondary market at market prices.
Certain securities held by the Fund may trade on foreign exchanges that are
closed when the Fund’s primary listing exchange is open, and the Fund may
experience premiums and discounts greater than those of ETFs that hold
securities that are traded only in the United
States.
◦Trading. Although shares of the Fund are listed
for trading on a national securities exchange, such as NYSE Arca, Inc. (the
“Exchange”), and may be traded on U.S. exchanges other than the Exchange, there
can be no assurance that shares of the Fund will trade with any volume, or at
all, on any stock exchange. In stressed market conditions, the liquidity of
shares of the Fund may begin to mirror the liquidity of the Fund’s underlying
portfolio holdings, which can be significantly less liquid than shares of the
Fund, and this could lead to differences between the market price of the shares
of the Fund and the underlying value of those
shares.
•Liquidity
Risk.
Liquidity risk exists when particular investments are difficult to purchase or
sell. This can reduce the Fund’s returns because the Fund may be unable to
transact at advantageous times or prices. Trading opportunities are more limited
for Adjustable Rate Securities that have complex terms or that are not widely
held. These features may make it more difficult to sell or buy a security at a
favorable price or time. Infrequent trading of securities may also lead to an
increase in their price volatility.
•Privately
Issued Securities Risk.
The Fund may invest in privately-issued securities, including those that may be
resold only in accordance with Rule 144A or Regulation S under the 1933 Act
(“Restricted Securities”). Restricted Securities are not publicly traded and are
subject to a variety of restrictions, which limit a purchaser’s ability to
acquire or resell such securities. Delay or difficulty in selling such
securities may result in a loss to the Fund.
•Management
Risk. The
Fund is subject to management risk because it is an actively managed portfolio.
In managing the Fund’s investment portfolio, the portfolio managers will apply
investment techniques and risk analyses that may not produce the desired result.
There can be no guarantee that the Fund will meet its investment
objective.
•Sector
Risk.
Sector risk is the possibility that securities within the same group of
industries will decline in price due to sector-specific market or economic
developments. If the Fund invests more heavily in a particular sector, the value
of its shares may be especially sensitive to factors and economic risks that
specifically affect that sector. As a result, the Fund’s share price may
fluctuate more widely than the value of shares of a fund that invests in a
broader range of industries.
◦Consumer
Discretionary Sector Risk.
The Fund may invest in companies in the consumer discretionary sector, and
therefore the performance of the Fund could be negatively impacted by events
affecting this sector. The success of consumer product manufacturers and
retailers is tied closely to the performance of domestic and international
economies, interest rates, exchange rates, competition, consumer confidence,
changes in demographics and consumer preferences. Companies in the consumer
discretionary sector depend heavily on disposable household income and consumer
spending, and may be strongly affected by social trends and marketing campaigns.
These companies may be subject to severe competition, which may have an adverse
impact on their profitability.
◦Industrials
Sector Risk. The
Fund may invest in companies in the industrials sector, and therefore the
performance of the Fund could be negatively impacted by events affecting this
sector. The industrials sector may be affected by changes in the supply of and
demand for products and services, product obsolescence, claims for environmental
damage or product liability and general economic conditions, among other
factors.
Fund
Performance
The
Fund is the successor to the Pacific Global Senior Loan ETF, a series of Pacific
Global ETF Trust, as a result of the reorganization of the Predecessor Fund into
the Fund at the close of business on October 22, 2021. In addition,
the Pacific Global Senior Loan ETF was the successor to the investment
performance of AdvisorShares Pacific Asset Enhanced Floating Rate ETF, a series
of AdvisorShares Trust, as a result of the reorganization of the series of
AdvisorShares Trust into a series of Pacific Global ETF that occurred on
December 27, 2019 (together, the “Predecessor FLRT Fund”).
Accordingly,
any performance information for periods prior to October 22, 2021 is
that of the series of Pacific Global ETF Trust; any performance for periods
prior to December 27, 2019 is that of the series of AdvisorShares Trust. While
the Predecessor FLRT Fund had the same investment objective as the Fund, the
Fund’s investment strategies and policies changed after the reorganization. From
the Predecessor FLRT Fund’s inception to October 22, 2021, the Predecessor FLRT
Fund invested at least 80% of its net assets (plus any borrowings for investment
purposes) in senior secured floating rate loans. After the reorganization, the
Fund invests at least 80% of its net assets (plus any borrowings for investment
purposes) in senior secured floating rate loans and other adjustable rate
securities. As part of the Fund’s 80% policy, other adjustable rate securities
will typically include CLOs, ABS, and CMBS (collectively, “Adjustable Rate
Securities”). Other than each Fund’s respective 80% policy and the associated
risks with investing in Adjustable Rate Securities, the Funds had similar
investment objectives, strategies, and policies.
The following
performance information indicates some of the risks of investing in the
Fund. The bar chart shows the Predecessor FLRT Fund’s
performance (based on NAV) for calendar years ended December 31. The table
illustrates how the Predecessor FLRT Fund’s average annual returns for the
one-year, five-year, and since inception periods compare to (i) the S&P 500
Index, which is a broad-based, unmanaged measurement of changes in stock market
conditions based on the average of 500 widely held common stocks and (ii) the
S&P/LSTA U.S. Leveraged Loan 100 Index, which is an index designed to track
the market-weighted performance of the largest institutional leveraged loans
based on market weightings, spreads and interest payments. The
Fund’s past performance, before and after taxes, does not necessarily indicate
how it will perform in the future. Updated performance
information is also available on the Fund’s website at www.PacerETFs.com.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 4.84%. During the period of time shown
in the bar chart, the Fund’s highest quarterly return
was 5.83% for the quarter ended June 30, 2020 and
the lowest quarterly return was
-9.07% for the quarter ended March 31,
2020.
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
|
|
|
| |
| 1
Year |
5
Year |
Since
Inception
(2/18/15) |
Pacer
Pacific Asset Floating Rate High Income ETF |
|
| |
Return
Before Taxes |
14.61% |
5.30% |
3.80% |
Return
After Taxes on Distributions |
10.69% |
3.14% |
1.93% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
8.51% |
3.12% |
2.06% |
S&P
500®
Index
(reflects no deduction for
fees, expenses, or taxes)
|
26.29% |
15.69% |
11.76% |
S&P/LSTA
U.S. Leveraged Loan 100 Index
(reflects no deduction for
fees, expenses, or taxes) |
13.11% |
5.78% |
4.25% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Investment
Sub-Adviser
Aristotle
Pacific Capital, LLC (the “Sub-Adviser” or “Aristotle Pacific”) serves as
investment sub-adviser to the Fund.
Portfolio
Managers
Bob
Boyd, Portfolio Manager and Senior Managing Director of the Sub-Adviser, and
Ying Qiu, CFA, Portfolio Manager and Managing Director of the Sub-Adviser, are
the primary persons responsible for the day-to-day management of the Fund. Mr.
Boyd has served as the Sub-Adviser’s portfolio manager for the Fund since the
Predecessor Fund’s inception in February 2015. Ms. Qiu has served as the
Sub-Adviser’s portfolio manager for the Fund since October 2021.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser, the Sub-Adviser, and their related companies may pay the
intermediary for activities related to the marketing and promotion of the Fund.
These payments may create a conflict of interest by influencing the
broker-dealer or other intermediary and your salesperson to recommend the Fund
over another investment. Ask your salesperson or visit your financial
intermediary’s website for more information.
|
| |
Pacer
Data and Digital Revolution ETF |
Investment
Objective
The Pacer Data and Digital Revolution
ETF (the “Fund”) employs a “passive management” (or indexing)
investment approach designed to track the total return performance, before fees
and expenses, of the Pacer Data Transmission and Communication Revolution Index
(the “Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You may pay other fees, such as brokerage commissions and other fees
to financial intermediaries, which are not reflected in the table and Example
below.
|
|
|
|
| |
Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.60% |
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
|
|
|
|
|
|
|
|
|
|
| |
1 Year |
3
Years |
5
Years |
10
Years |
$61 |
$192 |
$335 |
$750 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the portfolio turnover rate for the
Fund was 27% of the average value of its
portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index was established in 2022 and is based on a proprietary methodology
owned and maintained by Index Design Group (the “Index Provider” or “IDG”), an
affiliate of Pacer Advisors, Inc., the Fund’s investment adviser (the
“Adviser”).
Pacer
Data Transmission and Communication Revolution Index
The
Index is a rules-based index that consists of globally-listed stocks and
depositary receipts of companies that, at the time of being added to the Index,
derive at least 50% of their revenues from one of the following activities
related to the use, manipulation, transmission, or storage of data (i.e.,
information that is stored in a digital or electronic format) and the ancillary
services that enable these processes (i.e.,
services that enable companies to use, manipulate, transmit, or store data):
electrical equipment and component manufacturing; automatic environmental
control or heating and cooling equipment; computer storage device manufacturing;
computer systems design services; computer equipment or telephone equipment
manufacturing; custom computer programming or record reproducing services; data
processing and hosting services; software publishing; semiconductor
manufacturing; wireless communications equipment manufacturing; communication
and energy wire or wiring device manufacturing or producers of raw materials;
cybersecurity systems and data protection services; power and distribution
transformer manufacturing; satellite and digital telecommunications; electrical
equipment component manufacturing; industrial value manufacturing; commercial
machinery manufacturing;
instruments
used for measuring, displaying, and controlling industrial process variables
(e.g.,
instruments used for testing electricity and glass thermometers for non-medical
uses); computer facilities management services; or electrical equipment or
wiring supplies wholesalers (collectively, “Data and Digital Revolution”), as
determined by the Index Provider.
To
be added to the Index, an Index component must have a market capitalization
greater than or equal to US$1 billion, have a three-month
average-daily-value-traded of at least US$2 million, and must be a
publicly-traded equity security that is the primary listing security on a major
stock exchange (collectively, the Index’s “Investibility Requirements”). The
Index may include companies of any market capitalization that meets the
Investibility Requirements, but has significant exposure to large- and
mid-capitalization companies.
Data
and Digital Revolution companies include companies in the Information Technology
Sector and the Industrials Sector, as categorized by a third-party
classification system. Index constituents meeting the Investibility Requirements
are screened by the Index Provider from the universe of globally-listed stocks
based primarily on descriptions of a company’s business activities in regulatory
filings (e.g.,
financial statements, annual reports, investor presentations), analyst reports,
a company’s website, and industry-specific trade publications.
The
Index is reconstituted and rebalanced (i.e.,
companies are added or deleted and weights are reset based on Index rules) on an
annual basis as of the close of business on the last trading day in April. Index
Constituents are weighted based on their free-float market capitalization
(i.e.,
market capitalization based on the number of shares available to the public),
subject to the following constraints as of the time of each reconstitution of
the Index. Each Index Constituent’s weight is capped at 10% and the sum of Index
Constituents with weights greater than 4.5% cannot exceed 45% of the total Index
weight. If the foregoing limits would be exceeded at the time of a
reconstitution of the Index, the excess weight is proportionally redistributed
to all Index Constituents with weights below such limits.
As
of June 30, 2024, the Index was composed of 86 constituents, 7 of which were
listed on a non-U.S. exchange.
The
Fund’s Investment Strategy
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index.
To
the extent the Index concentrates (i.e., holds more than 25% of its total assets) in the securities of a
particular industry or group of related industries, the Fund will concentrate
its investments to approximately the same extent as the Index.
The Index, and consequently the Fund, is expected to have significant exposure
to companies in the Industrials and Information Technology Sectors. The Fund is
non-diversified and therefore may invest a larger percentage of its assets in
the securities of a single issuer or small number of issuers than diversified
funds.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Associated
Risks of Data and Digital Revolution Companies. Data and digital revolution companies include companies that develop
and provide goods and services related to the transmission of data and
communications. Transmission and communications services companies are subject
to extensive government regulation. The costs of complying with governmental
regulations, delays or failure to receive required regulatory approvals, or the
enactment of new adverse regulatory requirements may adversely affect the
business of such companies. Such companies are also subject to intense
competition and thus affected by mergers or consolidations by and among
customers, competition with alternative technologies such as wireless
communications (including with 5G and other technologies), product
compatibility, consumer preferences, rapid product obsolescence, and research
and development of new products. Technological innovations may make the products
and services of such companies obsolete. As a result, the value of the Fund’s
shares may rise and fall more than the value of shares of a fund that invests in
securities of companies in a broader range of industries.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Currency
Exchange Rate Risk. The Fund’s assets may include investments denominated in non-U.S.
currencies, such as the euro, or in securities or other assets that provide
exposure to such currencies. Changes in currency exchange rates and the relative
value of non-U.S. currencies will affect the value of the Fund’s investment and
the value of your Fund shares. Currency exchange rates can be very volatile and
can change quickly and unpredictably. As a result, the value of an investment in
the Fund may change quickly and without warning and you may lose
money.
▪Equity
Market Risk. The equity securities held in the Fund’s portfolio may experience
sudden, unpredictable drops in value or long periods of decline in value. This
may occur because of factors that affect securities markets generally or factors
affecting specific industries, sectors or companies in which the Fund invests.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value as market confidence in and
perceptions of their issuers change. The Fund’s NAV and market price may
fluctuate significantly in response to these and other factors. As a result, an
investor could lose money over short or long periods of time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act
as APs. In addition, there may be a limited number of market makers and/or
liquidity providers in the marketplace. To the extent either of the following
events occur, shares of the Fund may trade at a material discount to NAV and
possibly face delisting: (i) APs exit the business or otherwise become
unable to process creation and/or redemption orders and no other APs step
forward to perform these services, or (ii) market makers and/or liquidity
providers exit the business or significantly reduce their business activities
and no other entities step forward to perform their functions.
◦Cash
Redemption Risk. The
Fund’s investment strategy may require it to redeem Shares for cash or to
otherwise include cash as part of its redemption proceeds. The Fund may be
required to sell or unwind portfolio investments to obtain the cash needed to
distribute redemption proceeds. This may cause the Fund to recognize a capital
gain that it might not have recognized if it had made a redemption in-kind. As a
result, the Fund may pay out higher annual capital gain distributions than if
the in-kind redemption process was used. ETF shares can only be redeemed in
creation units by APs. Individual shareholders may only purchase and sell ETF
shares on a secondary market.
◦Costs
of Buying or Selling Shares of the Fund. Due to the costs of buying or selling shares of the Fund, including
brokerage commissions imposed by brokers and bid/ask spreads, frequent trading
of shares of the Fund may significantly reduce investment results and an
investment in shares of the Fund may not be advisable for investors who
anticipate regularly making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV. As with all ETFs, shares of the Fund may be bought and sold in the
secondary market at market prices. The price of shares of the Fund, like the
price of all traded securities, will be subject to factors such as supply and
demand, as well as the current value of the Fund’s portfolio holdings. Although
it is expected that the market price of the shares of the Fund will approximate
the Fund’s NAV, there may be times when the market price of the shares is more
than the NAV intra-day (premium) or less than the NAV intra-day (discount). This
risk is heightened in times of market volatility, periods of steep market
declines, and periods when there is limited trading activity for shares in the
secondary market, in which case such premiums or discounts may be significant.
Because securities held by the Fund trade on foreign exchanges that are closed
when the Fund’s primary listing exchange is open, the Fund is likely to
experience premiums and discounts greater than those of domestic
ETFs.
◦Trading.
Although shares of the Fund are listed for trading on a national securities
exchange, such as NYSE Arca, Inc. (the “Exchange”), and may be traded on U.S.
exchanges other than the Exchange, there can be no assurance that shares of the
Fund will trade with any volume, or at all, on any stock exchange. In stressed
market conditions, the liquidity of shares of the Fund may begin to mirror the
liquidity of the Fund’s underlying portfolio holdings,
which can be significantly less liquid
than shares of the Fund, and this could lead to differences between the market
price of the shares of the Fund and the underlying value of those
shares.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪Geographic
Concentration Risk. To
the extent the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or
region.
◦Risks
Related to Investing in Europe. The economies and markets of European
countries are often closely connected and interdependent, and events in one
country in Europe can have an adverse impact on other European countries. The
Fund makes investments in securities of issuers that are domiciled in, or have
significant operations in, member countries of the European Union (“EU”) that
are subject to economic and monetary controls that can adversely affect the
Fund’s investments. The European financial markets have experienced volatility
and adverse trends in recent years and these events have adversely affected the
exchange rate of the euro and may continue to significantly affect other
European countries. Decreasing imports or exports, changes in governmental or EU
regulations on trade, changes in the exchange rate of the euro, the default or
threat of default by an EU member country on its sovereign debt, and/or an
economic recession in an EU member country may have a significant adverse effect
on the economies of EU member countries and their trading partners, including
some or all of the European countries in which the Fund
invests.
▪International
Operations Risk. Investments in companies with significant business operations
outside of the United States may involve certain risks that may not be present
with investments in U.S. companies. For example, international operations may be
subject to risk of loss due to foreign currency fluctuations; changes in foreign
political and economic environments, regionally, nationally, and locally;
challenges of complying with a wide variety of foreign laws, including corporate
governance, operations, taxes, and litigation; differing lending practices;
differences in cultures; changes in applicable laws and regulations in the
United States that affect international operations; changes in applicable laws
and regulations in foreign jurisdictions; difficulties in managing international
operations; and obstacles to the repatriation of earnings and cash. These and
other factors can make an investment in the Fund more volatile than other types
of investments.
▪Limited
Operating History.
The Fund is a recently organized management investment company with limited
operating history. As a result, prospective investors have a limited track
record on which to base their investment decision. An investment in the Fund may
therefore involve greater uncertainty than an investment in a fund with a more
established record of performance.
▪Market
Capitalization Risk.
◦Large-Capitalization
Investing. The securities of large-capitalization companies may be relatively
mature compared to smaller companies and therefore subject to slower growth
during times of economic expansion.
◦Mid-Capitalization
Investing.
The securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
large-capitalization companies. The securities of mid-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than large-capitalization stocks or the stock market
as a whole.
▪Non-Diversification
Risk. Although
the Fund intends to invest in a variety of securities and instruments, the Fund
is considered to be non-diversified, which means that it may invest more of its
assets in the securities of a single issuer or a smaller number of issuers than
if it were a diversified fund. As a result, the Fund may be more exposed to the
risks associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may
increase the Fund’s volatility and cause the performance of a relatively smaller
number of issuers to have a greater impact on the Fund’s
performance.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Industrials
Sector Risk. The Fund may invest in companies in the industrials sector, and
therefore the performance of the Fund could be negatively impacted by events
affecting this sector. The industrials sector may be affected by changes in the
supply of and demand for products and services, product obsolescence, claims for
environmental damage or product liability and general economic conditions, among
other factors.
◦Information
Technology Sector Risk. The
Fund may invest in companies in the information technology sector, and therefore
the performance of the Fund could be negatively impacted by events affecting
this sector. Market or economic factors impacting information technology
companies and companies that rely heavily on technological advances could have a
significant effect on the value of the Fund’s investments. The value of stocks
of information technology companies and companies that rely heavily on
technology is particularly vulnerable to rapid changes in technology product
cycles, rapid product obsolescence, government regulation and competition, both
domestically and internationally, including competition from foreign competitors
with lower production costs. Stocks of information technology companies and
companies that rely heavily on technology, especially those of smaller,
less-seasoned companies, tend to be more volatile than the overall market.
Information technology companies are heavily dependent on patent and
intellectual property rights, the loss or impairment of which may adversely
affect profitability.
▪Tracking
Error Risk.
As with all index funds, the performance of the Fund and its Index may differ
from each other for a variety of reasons. For example, the Fund incurs operating
expenses and portfolio transaction costs not incurred by the Index. In addition,
the Fund may not be fully invested in the securities of the Index at all times
or may hold securities not included in the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 24.03%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 21.69% (quarter ended March 31, 2023) and
the Fund’s lowest return for a
calendar quarter was -0.98% (quarter ended September 30,
2023).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
|
|
|
|
|
|
|
| |
| 1
Year |
Since
Inception
(6/8/22) |
Pacer
Data and Digital Revolution ETF |
| |
Return
Before Taxes |
67.07% |
27.30% |
Return
After Taxes on Distributions |
66.92% |
27.12% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
39.70% |
21.06% |
Pacer
Data Transmission and Communication Revolution TR Index
(reflects no deduction for
fees, expenses, or taxes) |
68.21% |
28.15% |
S&P
500®
Index
(reflects no deduction for
fees, expenses, or taxes) |
26.29% |
11.74% |
S&P
1200 Index
(reflects no deduction for
fees, expenses, or taxes) |
23.38% |
10.11% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor. After-tax returns shown are
not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund.
Messrs. Kavanaugh and Wang have served as portfolio managers since the Fund’s
inception in June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to
recommend
the Fund over another investment. Ask your salesperson or visit your financial
intermediary’s website for more information.
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Pacer
Industrials and Logistics ETF |
Investment
Objective
The Pacer Industrials and Logistics ETF
(the “Fund”) employs a “passive management” (or indexing) investment approach
designed to track the total return performance, before fees and expenses, of the
Pacer Global Supply Chain Infrastructure Index (the “Index”).
Fees and Expenses of the
Fund
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You may pay other fees, such as brokerage commissions and other fees
to financial intermediaries, which are not reflected in the table and Example
below.
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Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
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Management
Fees |
0.60% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Acquired
Fund Fees and Expenses1 |
0.01% |
Total
Annual Fund Operating Expenses |
0.61% |
1
Acquired Fund Fees
and Expenses (“AFFE”) are the indirect costs of investing in other investment
companies. Total Annual Fund Operating Expenses do not correlate to the expense
ratios in the Fund’s Financial Highlights because the Financial Highlights
include only the direct operating expenses incurred by the Fund and exclude
AFFE.
Example
The following example is intended to help retail investors compare
the cost of investing in the Fund with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they were to invest $10,000 in the Fund for the time periods
indicated and then redeem all of the Shares at the end of those periods. This
example assumes that the Fund provides a return of 5% a year and that operating
expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would
be:
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1 Year |
3
Years |
5
Years |
10
Years |
$62 |
$195 |
$340 |
$762 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
Shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
For the fiscal year ended April 30, 2024, the portfolio turnover rate for the
Fund was 26% of the average value of its
portfolio.
Principal Investment
Strategies of the Fund
The
Fund employs a “passive management” (or indexing) investment approach designed
to track the total return performance, before fees and expenses, of the Index.
The Index was established in 2022 and is based on a proprietary methodology
owned and maintained by Index Design Group (the “Index Provider” or “IDG”), an
affiliate of Pacer Advisors, Inc., the Fund’s investment adviser (the
“Adviser”). The Index is based on a proprietary methodology developed and
maintained by Index Design Group (the “Index Provider”), an affiliate of Pacer
Advisors, Inc., the Fund’s investment adviser (the “Adviser”).
Pacer
Global Supply Chain Infrastructure Index
The
Index consists of globally-listed stocks and depositary receipts of industrials
and logistics companies, as described below. Companies eligible to be added to
the Index are those that derive at least 50% of their revenue from the following
activities: (i) transportation, including air, ocean, and rail freight, long and
short haul trucking, and other courier services that contribute to the movement
of products within global supply chains; (ii) software, including transportation
management services, logistics software, and other software services that enable
companies to draw insights and maximize supply chain efficiency; (iii) hardware,
including robotics, forklifts, and other equipment that is instrumental in
the
logistics process such as conveyor belt technology in warehouses; or (iv)
consulting companies responsible for increasing the efficiency of companies with
operations in supply chain and logistics management (collectively, “Industrials
and Logistics”), as determined by the Index Provider. “Industrials” companies
are those companies that are engaged in the research, development, manufacture,
distribution, supply, or sale of industrial products, services, or equipment
(e.g.,
capital goods, construction services, machinery, and transportation).
“Logistics” companies are those companies involved in the supply chain movements
required to move raw materials, intermediate goods, and finished products around
the world (e.g.,
the provision of logistics support, logistics software, rail and air freight,
trucking, and marine shipping).
To
be added to the Index, an Index component must have a market capitalization
greater than or equal to US$1 billion, have a three-month
average-daily-value-traded of at least US$2 million, and must be a
publicly-traded equity security that is the primary listing security on a major
stock exchange (collectively, the Index’s “Investibility Requirements”). The
Index may include companies of any market capitalization that meets the
Investibility Requirements, but has significant exposure to large- and
mid-capitalization companies.
Industrials
and Logistics companies include companies in the Information Technology Sector
and the Industrials Sector, as categorized by a third-party classification
system. Index constituents meeting the Investibility Requirements are screened
by the Index Provider from the universe of globally-listed stocks based
primarily on descriptions of a company’s business activities in regulatory
filings (e.g.,
financial statements, annual reports, investor presentations), analyst reports,
a company’s website, and industry-specific trade publications.
The
Index is reconstituted and rebalanced (i.e.,
companies are added or deleted and weights are reset based on Index rules) on an
annual basis as of the close of business on the last trading day in April. Index
Constituents are weighted based on their free-float market capitalization
(i.e.,
market capitalization based on the number of shares available to the public),
subject to the following constraints as of the time of each reconstitution of
the Index. Each Index Constituent’s weight is capped at 10% and the sum of Index
Constituents with weights greater than 4.5% cannot exceed 45% of the total Index
weight. If the foregoing limits would be exceeded at the time of a
reconstitution of the Index, the excess weight is proportionally redistributed
to all Index Constituents with weights below such limits.
As
of June 30, 2024, the Index was composed of 97 constituents, 64 of which were
listed on a non-U.S. exchange.
The
Fund’s Investment Strategy
Under
normal circumstances, at least 80% of the Fund’s net assets (plus any borrowings
for investment purposes) will be invested in companies that derive at least 50%
of their revenues from Industrials and Logistics, as defined above.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning it will invest in all of the component securities of the
Index.
To
the extent the Index concentrates (i.e., holds more than 25% of its total assets) in the securities of a
particular industry or group of related industries, the Fund will concentrate
its investments to approximately the same extent as the Index.
The Index, and consequently the Fund, is expected to have significant exposure
to companies in the Industrials and Information Technology Sectors. As of June
30, 2024, the Index had significant exposure to companies in European companies.
The Fund is non-diversified and therefore may invest a larger percentage of its
assets in the securities of a single issuer or small number of issuers than
diversified funds.
Principal Risks of Investing
in the Fund
You can lose
money on your investment in the Fund. The Fund is subject to the
risks summarized below. Some or all of these risks may adversely affect the
Fund’s net asset value per share (“NAV”), trading price, yield, total return
and/or ability to meet its objectives. For more information about the risks of
investing in the Fund, see the section in the Fund’s prospectus entitled
“Additional Information about the Principal Risks of Investing in the Funds.”
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which it appears.
▪Associated
Risk of Industrials and Logistics Companies. Industrials
and Logistics companies support the global supply chain. These companies may be
adversely affected by a downturn in economic conditions that can result in
decreased demand for shipping, ports, trade routes, and freight. Such companies
may also be significantly affected by changes in fuel prices, which may be very
volatile, the imposition of tariffs or trade wars, changes in labor relations or
availability, labor strikes, insurance costs, commodities prices in general,
international politics and conflicts, changes in transportation patterns,
changes to shipping and air freight routes, weather patterns and events,
including hurricane
activity, road conditions, pandemic diseases, the congestion,
blockage or shutdown of key routes, ports, and canals, commodity prices, taxes,
tariffs, trade wars, imposition of emissions standards and other
environment-related rules and regulations, domestic or international politics
and conflicts, including war or threat of war, computer and/or software
malfunction, logistics interference, piracy, cyber attacks and terrorism.
Industrials and Logistics companies may also be highly dependent on aircraft,
ships, trucks, heavy machinery, technology, or related equipment from a small
number of suppliers, and consequently, issues affecting the availability,
reliability, safety, or longevity of such equipment may have a significant
effect on the operations and profitability of such companies. In addition,
regulatory changes and competition from foreign companies subject to more
favorable government regulation may affect the success of these
companies.
▪Calculation
Methodology Risk.
The Index relies directly or indirectly on various sources of information to
assess the criteria of issuers included in the Index, including information that
may be based on assumptions and estimates. Neither the Fund, the Index Provider,
or the Adviser can offer assurances that the Index’s calculation methodology or
sources of information will provide an accurate assessment of included
components or a correct valuation of securities, nor can they guarantee the
availability or timeliness of the production of the
Index.
▪Currency
Exchange Rate Risk. The
Fund’s assets may include investments denominated in non-U.S. currencies, such
as the euro, or in securities or other assets that provide exposure to such
currencies. Changes in currency exchange rates and the relative value of
non-U.S. currencies will affect the value of the Fund’s investment and the value
of your Fund shares. Currency exchange rates can be very volatile and can change
quickly and unpredictably. As a result, the value of an investment in the Fund
may change quickly and without warning and you may lose
money.
▪Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific industries, sectors or companies in which the Fund invests. Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change. The Fund’s NAV and market price may fluctuate
significantly in response to these and other factors. As a result, an investor
could lose money over short or long periods of
time.
▪ETF
Risks.
The Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦Authorized
Participants (“APs”), Market Makers, and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act
as APs. In addition, there may be a limited number of market makers and/or
liquidity providers in the marketplace. To the extent either of the following
events occur, shares of the Fund may trade at a material discount to NAV and
possibly face delisting: (i) APs exit the business or otherwise become
unable to process creation and/or redemption orders and no other APs step
forward to perform these services, or (ii) market makers and/or liquidity
providers exit the business or significantly reduce their business activities
and no other entities step forward to perform their functions.
◦Cash
Redemption Risk. The
Fund’s investment strategy may require it to redeem Shares for cash or to
otherwise include cash as part of its redemption proceeds. The Fund may be
required to sell or unwind portfolio investments to obtain the cash needed to
distribute redemption proceeds. This may cause the Fund to recognize a capital
gain that it might not have recognized if it had made a redemption in-kind. As a
result, the Fund may pay out higher annual capital gain distributions than if
the in-kind redemption process was used. ETF shares can only be redeemed in
creation units by APs. Individual shareholders may only purchase and sell ETF
shares on a secondary market.
◦Costs
of Buying or Selling Shares of the Fund. Due to the costs of buying or selling shares of the Fund, including
brokerage commissions imposed by brokers and bid/ask spreads, frequent trading
of shares of the Fund may significantly reduce investment results and an
investment in shares of the Fund may not be advisable for investors who
anticipate regularly making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. The price of shares of the Fund, like the price of all
traded securities, will be subject to factors such as supply and demand, as well
as the current value of the Fund’s portfolio holdings. Although it is expected
that the market price of the shares of the Fund will approximate the Fund’s NAV,
there may be times when the market price of the shares is more than the NAV
intra-day (premium) or less than the NAV intra-day (discount). This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for shares in the secondary
market, in which
case
such premiums or discounts may be significant. Because securities held by the
Fund trade on foreign exchanges that are closed when the Fund’s primary listing
exchange is open, the Fund is likely to experience premiums and discounts
greater than those of domestic
ETFs.
◦Trading. Although shares of the Fund are listed
for trading on a national securities exchange, such as NYSE Arca, Inc. (the
“Exchange”), and may be traded on U.S. exchanges other than the Exchange, there
can be no assurance that shares of the Fund will trade with any volume, or at
all, on any stock exchange. In stressed market conditions, the liquidity of
shares of the Fund may begin to mirror the liquidity of the Fund’s underlying
portfolio holdings, which can be significantly less liquid than shares of the
Fund, and this could lead to differences between the market price of the shares
of the Fund and the underlying value of those
shares.
▪Foreign
Securities Risk. Investments
in non-U.S. securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in non-U.S. securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. Investments in non-U.S. securities also may
be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Foreign securities held by the Fund may trade on
markets that are closed when U.S. markets are open, which may lead to a
difference in the value of the Fund and the underlying foreign
securities.
▪Geographic
Concentration Risk. To
the extent the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or
region.
◦Risks
Related to Investing in Europe.
The economies and markets of European countries are often closely connected and
interdependent, and events in one country in Europe can have an adverse impact
on other European countries. The Fund makes investments in securities of issuers
that are domiciled in, or have significant operations in, member countries of
the European Union (“EU”) that are subject to economic and monetary controls
that can adversely affect the Fund’s investments. The European financial markets
have experienced volatility and adverse trends in recent years and these events
have adversely affected the exchange rate of the euro and may continue to
significantly affect other European countries. Decreasing imports or exports,
changes in governmental or EU regulations on trade, changes in the exchange rate
of the euro, the default or threat of default by an EU member country on its
sovereign debt, and/or an economic recession in an EU member country may have a
significant adverse effect on the economies of EU member countries and their
trading partners, including some or all of the European countries in which the
Fund invests.
◦Risks
Related to Investing in Hong Kong.
Investments in the securities of issuers that trade on an exchange in Hong Kong
subject the Fund to risks specific to China and Hong Kong. Hong Kong may be
subject to considerable degrees of economic, political and social instability.
Hong Kong is a developing market and demonstrates significantly higher
volatility from time to time in comparison to developed markets. Over the past
25 years, the Chinese government has undertaken reform of economic and market
practices and is expanding the sphere of private ownership of property in China.
However, Chinese markets generally continue to experience inefficiency,
volatility and pricing anomalies resulting from governmental influence, a lack
of publicly available information and/or political and social instability.
Internal social unrest or confrontations with other neighboring countries,
including military conflicts in response to such events, may also disrupt
economic development in China and result in a greater risk of currency
fluctuations, currency convertibility, interest rate fluctuations and higher
rates of inflation. Export growth continues to be a major driver of China’s
rapid economic growth. Reduction in spending on Chinese products and services,
institution of tariffs or other trade barriers, or a downturn in any of the
economies of China’s key trading partners may have an adverse impact on the
Chinese economy. Further, any attempt by China to tighten its control over Hong
Kong’s political, economic, legal or social policies may result in an adverse
effect on Hong Kong’s markets.
◦Risks
Related to Investing in South Korea.
Investments in South Korean issuers may subject the Fund to legal, regulatory,
political, currency, security, and economic risks that are specific to South
Korea. In addition, economic and political developments of South Korea’s
neighbors may have an adverse effect on the South Korean
economy.
◦Risks
Related to Investing in Japan. The
Japanese economy may be subject to considerable degrees of economic, political
and social instability, which could have a negative impact on Japanese
securities. Japan’s economic
growth rate has remained relatively low
for an extended period of time and it may remain low in the future. In addition,
Japan is subject to the risk of natural disasters, such as earthquakes,
volcanoes, typhoons and tsunamis. Additionally, decreasing U.S. imports, new
trade regulations, changes in the U.S. dollar exchange rates, a recession in the
United States or continued increases in foreclosure rates may have an adverse
impact on the economy of Japan. Japan also has few natural resources, and any
fluctuation or shortage in the commodity markets could have a negative impact on
Japanese securities.
▪International
Operations Risk. Investments
in companies with significant business operations outside of the United States
may involve certain risks that may not be present with investments in U.S.
companies. For example, international operations may be subject to risk of loss
due to foreign currency fluctuations; changes in foreign political and economic
environments, regionally, nationally, and locally; challenges of complying with
a wide variety of foreign laws, including corporate governance, operations,
taxes, and litigation; differing lending practices; differences in cultures;
changes in applicable laws and regulations in the United States that affect
international operations; changes in applicable laws and regulations in foreign
jurisdictions; difficulties in managing international operations; and obstacles
to the repatriation of earnings and cash. These and other factors can make an
investment in the Fund more volatile than other types of
investments.
▪Limited
Operating History.
The Fund is a recently organized management investment company with limited
operating history. As a result, prospective investors have a limited track
record on which to base their investment decision. An investment in the Fund may
therefore involve greater uncertainty than an investment in a fund with a more
established record of performance.
▪Market
Capitalization Risk.
◦Large-Capitalization
Investing. The securities of large-capitalization companies may be relatively
mature compared to smaller companies and therefore subject to slower growth
during times of economic expansion.
◦Mid-Capitalization
Investing. The securities of mid-capitalization
companies may be more vulnerable to adverse issuer, market, political, or
economic developments than securities of large-capitalization companies. The
securities of mid-capitalization companies generally trade in lower volumes and
are subject to greater and more unpredictable price changes than
large-capitalization stocks or the stock market as a
whole.
▪Non-Diversification
Risk. Although
the Fund intends to invest in a variety of securities and instruments, the Fund
is considered to be non-diversified, which means that it may invest more of its
assets in the securities of a single issuer or a smaller number of issuers than
if it were a diversified fund. As a result, the Fund may be more exposed to the
risks associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may
increase the Fund’s volatility and cause the performance of a relatively smaller
number of issuers to have a greater impact on the Fund’s
performance.
▪Passive
Investment Risk. The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. The Fund invests in securities included in the
Index, regardless of their investment merits. The Fund does not take defensive
positions under any market conditions, including conditions that are adverse to
the performance of the Fund.
▪Sector
Risk. To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Industrials
Sector Risk. The Fund may invest in companies in the industrials sector, and
therefore the performance of the Fund could be negatively impacted by events
affecting this sector. The industrials sector may be affected by changes in the
supply of and demand for products and services, product obsolescence, claims for
environmental damage or product liability and general economic conditions, among
other factors.
◦Information
Technology Sector Risk. The
Fund may invest in companies in the information technology sector, and therefore
the performance of the Fund could be negatively impacted by events affecting
this sector. Market or economic factors impacting information technology
companies and companies that rely heavily on technological advances could have a
significant effect on the value of the Fund’s investments. The value of stocks
of information technology companies and companies that rely heavily on
technology is particularly vulnerable to rapid changes in technology product
cycles, rapid product obsolescence, government regulation and competition,
both
domestically and internationally, including competition from foreign competitors
with lower production costs. Stocks of information technology companies and
companies that rely heavily on technology, especially those of smaller,
less-seasoned companies, tend to be more volatile than the overall market.
Information technology companies are heavily dependent on patent and
intellectual property rights, the loss or impairment of which may adversely
affect profitability.
▪Tracking
Error Risk.
As with all index funds, the performance of the Fund and its Index may differ
from each other for a variety of reasons. For example, the Fund incurs operating
expenses and portfolio transaction costs not incurred by the Index. In addition,
the Fund may not be fully invested in the securities of the Index at all times
or may hold securities not included in the Index.
Fund
Performance
The following
information provides some indication of the risks of investing in the
Fund. The bar chart shows the Fund’s performance (based on NAV)
for calendar years ended December 31. The table shows how the Fund’s average
annual returns for the one year and since inception periods compared with those
of the Index and a broad measure of market performance. The Fund’s
past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.PacerETFs.com
or by calling the Fund toll-free at 1-800-617-0004.
Calendar Year Total
Return as of December 31
For
the year-to-date period ended
June 30,
2024, the Fund’s total return was 0.64%. During the period of time shown
in the bar chart, the Fund’s highest return for a
calendar quarter was 11.32% (quarter ended March 31, 2023) and
the Fund’s lowest return for a
calendar quarter was -4.87% (quarter ended September 30,
2023).
Average
Annual Total Returns
(for
the periods ended December 31, 2023)
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| 1
Year |
Since
Inception
(6/8/22) |
Pacer
Industrials and Logistics ETF |
| |
Return
Before Taxes |
21.09% |
8.09% |
Return
After Taxes on Distributions |
20.55% |
7.59% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
13.36% |
6.31% |
Pacer
Global Supply Chain Infrastructure Total Return Index
(reflects no deduction for
fees, expenses, or taxes) |
22.40% |
8.84% |
S&P
500®
Index
(reflects no deduction for
fees, expenses, or taxes) |
26.29% |
11.74% |
S&P
1200 Index
(reflects no deduction for
fees, expenses, or taxes) |
23.38% |
10.11% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates during the period covered by the table above and do not reflect the impact
of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. In certain cases, the figure representing “Return After
Taxes on Distributions and Sale of Fund Shares” may be higher than the other
return figures for the same period. A higher after-tax return results when a
capital loss occurs upon redemption and provides an assumed tax deduction that
benefits the
investor. After-tax
returns shown are not relevant to investors who hold their Shares through
tax-deferred arrangements such as an individual retirement account (“IRA”) or
other tax-advantaged accounts.
Management
Investment
Adviser
Pacer
Advisors, Inc. (the “Adviser”) serves as investment adviser to the
Fund.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. Bruce Kavanaugh, Vice President of the
Adviser, and Danke Wang, CFA, FRM, Portfolio Manager for the Adviser, are
jointly and primarily responsible for the day-to-day management of the Fund.
Messrs. Kavanaugh and Wang have served as portfolio managers since the Fund’s
inception in June 2022.
Buying
and Selling Fund Shares
The
Fund is an ETF. This means that individual Shares of the Fund may only be
purchased and sold in the secondary market through brokers at market prices,
rather than NAV. Because Shares trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund generally issues and redeems shares at NAV only in large blocks of shares
known as “Creation Units,” which only institutions or large investors may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities (the “Deposit Securities”) and/or a
designated amount of U.S. cash that the Fund specifies each day.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its net asset value, market price, premiums and discounts, and bid-ask
spreads is available on the Fund’s website at www.PacerETFs.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged retirement account. Distributions may be taxable upon
withdrawal from tax-deferred accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker or other financial intermediary (such as
a bank), the Adviser and its related companies may pay the intermediary for
activities related to the marketing and promotion of the Fund. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
ADDITIONAL
INFORMATION ABOUT THE FUNDS
Each
Fund’s ticker symbol appears on the cover of this Prospectus, and references to
specific Funds in the sections below will refer to such Funds by their ticker
symbol.
Additional
Information About Each Fund’s Investment Objective
Each
Fund’s investment objective has been adopted as a non-fundamental investment
policy and may be changed without a vote of shareholders upon written notice to
shareholders. With respect to FLRT, the Fund’s investment objective may be
changed without a vote of shareholders upon 60 days’ written notice to
shareholders.
Additional
Information About Each Fund’s Principal Investment Strategies
Each
Fund (except for FLRT) will concentrate its investments (i.e.,
hold 25% or more of its total assets) in a particular industry or group of
related industries to approximately the same extent that the Fund’s underlying
index is concentrated. For purposes of this limitation, securities of the U.S.
government (including its agencies and instrumentalities) are not considered to
be issued by members of any industry. The components of each Fund’s underlying
index, and the degree to which these components represent certain industries,
may change over time.
With
respect to AFTY, CSOP Asset Management, the Fund’s sub-adviser, may purchase
securities not represented in the FTSE China A50 Net Total Return Index (the
“FTSE China A50 Index”) in anticipation of their addition to the FTSE China A50
Index, or sell securities that are represented in the Index in anticipation of
their removal from the FTSE China A50 Index. CSOP Asset Management may also
occasionally choose to underweight or overweight a security in the FTSE China
A50 Index, purchase securities not included in the FTSE China A50 Index that
CSOP Asset Management believes are appropriate to substitute for certain
securities in the FTSE China A50 Index, or utilize various combinations of other
available investment techniques to seek to track, before fees and expenses, the
performance of the FTSE China A50 Index.
With
respect to PTBD; ROOM, PAD, RXRE, INDS, and SRVR (each, a “Real Estate ETF”, and
collectively, the “Real Estate ETFs”); and ALTL, PAMC, and PALC (each, a “Lunt
ETF,” and collectively, the “Lunt ETFs”), each Fund has adopted a policy to
comply with Rule 35d-1 under the 1940 Act. Each such policy has been adopted as
a non-fundamental policy and may be changed without shareholder approval upon 60
days’ written notice to shareholders.
With
respect to the Lunt ETFs, the Funds may invest up to 20% of its assets in cash
and cash equivalents, other investment companies, as well as securities and
other instruments not included in its applicable Index but which the Adviser
believes will help a Fund track the applicable Index.
Additional
Information About FLRT’s Investment Strategies
Aristotle
Pacific seeks to achieve the Fund’s investment objective by selecting a focused
portfolio comprised primarily of income producing adjustable-rate securities of
domestic and U.S. dollar denominated foreign issuers.
Senior
floating rate loans will generally be purchased from banks or other financial
institutions through assignments or participations. A direct interest in a
senior floating rate loan may be acquired directly from the agent of the lender
or another lender by assignment or an indirect interest may be acquired as a
participation in another lender’s portion of such loan. The Fund invests in
various types of ABS, such as auto and student loan ABS. The Fund is actively
managed.
The
Fund may invest up to 20% of its assets in certain other types of debt
instruments or securities including corporate bonds (including floating rate
investment grade bonds) and secured or unsecured second lien floating rate
loans. Second lien loans generally are second in line behind senior loans in
terms of prepayment priority with respect to pledged collateral and therefore
have a lower credit quality as compared to senior loans but may produce a higher
yield to compensate for the additional risk.
The
secondary market on which high yield securities are traded may be less liquid
than the market for investment-grade securities. Less liquidity in the secondary
trading market could adversely affect the ability of the Fund to sell a high
yield security or the price at which the Fund could sell a high yield security,
and could adversely affect the daily NAV of Fund shares. When secondary markets
for high yield securities are less liquid than the market for investment-grade
securities, it may be more difficult to value the securities because such
valuation may require more research, and elements of judgment may play a greater
role in the valuation because there is less reliable, objective data available.
The Fund may invest up to an aggregate amount of 15% of its net assets in
illiquid investments, as such term is defined by Rule 22e-4 under the 1940
Act.
Investment
Philosophy. Aristotle Pacific believes a disciplined portfolio decision-making
process that focuses on credit fundamentals for individual security selection
will lead to outstanding long-term performance versus the Fund’s peers and
benchmark. Aristotle Pacific believes that the focus should be on the
fundamentals of the businesses in which the Fund invests.
Selection
Process. Aristotle Pacific’s selection process consists of four
steps:
1.Determine
Universe of Investable Securities: The Fund aims to provide exposure to the most
liquid segment of the bank loan and adjustable rate securities marketplace. The
factors considered by Aristotle Pacific when determining liquidity specifically
for loans may include the frequency of trading or quotes, the number of dealers
in the market willing to purchase or sell the loan, trading volume, the nature
of the security, and the market for the security including prospects for future
demand for the loan.
2.Portfolio
Risk Assessment: Once Aristotle Pacific has determined the investable universe,
both the macro-economic environment and technical factors that could materially
impact the credit markets are assessed. Aristotle Pacific assesses the economic
and market climates and then determines an overall target of portfolio risk to
employ for the near term.
3.Portfolio
Construction: Once Aristotle Pacific has determined the target risk and
investable universe, Aristotle Pacific constructs what is believed to be the
most effective mix of investments in accordance with the overall portfolio
guidelines. As a result, investments with the most favorable risk/reward
analyses will tend to have a greater representation in the Fund’s portfolio. Due
to the nature of ETF structure and liquidity requirements, the portfolio will
place a higher value on liquidity relative to products without such a
requirement. The portfolio will be diversified by industry and issuer, with no
individual issuer representing more than 5% of the portfolio. Aristotle Pacific
will consider duration when constructing the portfolio. Duration is a measure of
the expected change in value of a fixed income security for a given change in
interest rates. For example, if interest rates changed by one percent, the value
of a security having an effective duration of two years generally would vary by
two percent. Duration takes the length of the time intervals between the present
time and time that the interest and principal payments are scheduled, or in the
case of a callable bond, expected to be received, and weighs them by the present
values of the cash to be received at each future point in time. The typical
duration positioning of the portfolio will be between 0.25 years to 0.75 years
or as determined by Aristotle Pacific.
4.Monitor:
Once an investment is made, monitoring takes place each business day. Portfolio
values are monitored through daily third-party pricing. Credit updates are
captured through the Aristotle Pacific’s research system. This system serves as
a centralized credit hub for Aristotle Pacific’s research team. The system
aggregates information such as portfolio holdings, outlooks, analyst comments,
and investment theses for the portfolio management, operations, and credit
teams.
Investments
are sold based upon relative value opportunities or changes in corporate
fundamentals, or when Aristotle Pacific believes another security is a more
attractive investment opportunity.
Additional
Information About Each Index
and
the Underlying Indices
Index
Calculation and Trademark Ownership
Each
Index is calculated by a third party calculation agent that is not affiliated
with the Funds, IDG, the Adviser, or the Funds’ distributor. Each such
calculation agent shall have no liability for any errors or omissions in
calculating any Index.
Each
Index for which IDG is the Index Provider is owned by IDG, an affiliate of the
Adviser, and was created and is sponsored by the Adviser or one of its
affiliates. IDG owns all intellectual property rights to the “TRENDPILOT” mark,
and any use of any such rights must be with the consent of IDG. NASDAQ OMX and
Pacer Advisors, Inc. jointly own the Pacer Nasdaq 100 Trendpilot Index.
The
FTSE China A50 Index is compiled and published by FTSE, which is located at
12th Floor, 10 Upper Bank Street, Canary Wharf, London E14 5NP. FTSE
or its affiliates are the proprietors and absolute owners of the FTSE China A50
Index and the designation “FTSE®.” FTSE has granted to the Adviser (by way of a
license, subject to the terms of an index license agreement between them), among
other things, the non-transferable and non-exclusive right to use the FTSE China
A50 Index in respect of the AFTY and to sponsor, issue, establish, market, list,
and distribute the AFTY.
The
Indices for the Real Estate ETFs may include the following security types:
common stocks, REITs, American Depositary Receipts (“ADRs”), limited partnership
interests, shares or units of beneficial interest, and shares of limited
liability
companies. If at any time a security no longer meets the eligibility criteria
for being included in an Index, the security is removed from such Index and not
replaced. Each Index for INDS and SRVR has contracted to calculate and maintain
each Index and is the exclusive property of Global Property Research B.V. and
Solactive AG.
The
Indices for the Lunt ETFs are calculated by S&P Opco, LLC (a subsidiary of
S&P Dow Jones Indices (“SPDJI”)), which is independent of the Adviser, the
Index Provider, and the Funds’ distributor.
Simple
Moving Average Calculation. The
200-day moving average for an index can be calculated by adding the closing
price of the index for each of the 200 most recent business days and dividing
the resulting sum by 200. With respect to PTBD, the 100-day moving average for
an index can be calculated by adding the closing price of the index for each of
the 100 most recent business days and dividing the resulting sum by
100.
NASDAQ-100
Index®.
The
NASDAQ-100 Index was developed by NASDAQ OMX and is calculated, maintained and
published by NASDAQ OMX.
The
NASDAQ-100 Index includes 100 of the largest non-financial securities listed on
The NASDAQ Stock Market based on market capitalization. The NASDAQ-100 Index
comprises securities of companies across major industry groups, including
computer, biotechnology, healthcare, telecommunications and transportation.
However, it does not contain securities of financial companies, including
investment companies. Index eligibility is limited to specific security types
only. The security types eligible for the NASDAQ-100 Index include common
stocks, ordinary shares, American Depositary Receipts, and tracking
stocks.
As
of June 30, 2024, the three largest components of the NASDAQ-100 Index were
Microsoft Corporation (8.64%), Apple Inc. (8.40%), and Nvidia Corporation
(7.91%) and the three largest sectors represented in the index were Information
Technology (61.47%), Consumer Discretionary (17.51%), and Health Care
(6.10%).
The
NASDAQ-100®
IndexSM
is the exclusive property of NASDAQ OMX and has been licensed for use by the
Adviser in connection with the NASDAQ-100 Trendpilot Index. NASDAQ®,
OMX®,
NASDAQ OMX®,
NASDAQ-100, NASDAQ-100 Index are registered trademarks and service marks of The
NASDAQ OMX Group, Inc. The NASDAQ OMX Group, Inc. and NASDAQ OMX shall have no
liability for any errors or omissions in calculating the NASDAQ-100 Trendpilot
Index. NASDAQ OMX AND ITS AFFILIATES AND SUBSIDIARIES MAKE NO WARRANTIES AND
BEAR NO LIABILITY WITH RESPECT TO PTNQ.
FTSE
All-World Developed Large Cap Index.
The
FTSE All-World Developed Large Cap Index is made up of common stocks of large
capitalization companies located in twenty-three countries—mostly companies in
the U.S. and Japan, which generally make up approximately 69.51% and 6.98%,
respectively, of the FTSE All-World Developed Large Cap Index’s market
capitalization as of June 30, 2024. Other countries represented in the
Index include Australia, Belgium, Canada, Denmark, Finland, France, Germany,
Hong Kong, Ireland, Israel, Italy, the Netherlands, New Zealand, Norway,
Portugal, Singapore, South Korea, Spain, Sweden, Switzerland, and United
Kingdom.
FTSE
Developed ex US Index.
The
FTSE Developed ex US Index is made up of approximately 1,550 common stocks of
large- and mid-capitalization companies located in twenty-four non-U.S.
countries—mostly companies in Japan and the United Kingdom (which made up
approximately 22.24% and 12.71%, respectively, of the FTSE Developed ex US
Index’s market capitalization as of June 30, 2024). Other countries
represented in the Index include Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, the Netherlands,
New Zealand, Norway, Poland, Portugal, Singapore, South Korea, Spain, Sweden,
and Switzerland.
FTSE
Emerging Markets Index. The
FTSE Emerging Markets Index is made up of common stocks of large and
mid-capitalization companies located in twenty-four countries—mostly companies
in China, India, and Taiwan (which made up approximately 26.58%, 23.44% and
20.59%, respectively, of the FTSE Emerging Markets Index’s market capitalization
as of June 30, 2024).
FTSE
Eurozone Index (formerly the FTSE Eurobloc Index).
The
FTSE Eurozone Index is made up of approximately 700 common stocks of companies
located in 11 European countries—mostly companies in France, Germany, and the
Netherlands (which made up approximately 32.66%, 25.64%, and 15.78%,
respectively, of the FTSE Eurozone Index’s market capitalization as of
June 30, 2024). Other countries represented in the Index include Austria,
Belgium, Finland, Greece, Ireland, Italy, Portugal, and Spain.
Lunt
Capital U.S. MidCap Multi-Factor Rotation Index. The
Index utilizes Lunt Capital’s proprietary relative strength methodology to
rotate its holdings of the highest quintile components and the lowest quintile
components of the four
factor-based
indices of the S&P MidCap 400 Index. Each Sub-Index is a subset of the
S&P MidCap 400 Index. The S&P MidCap 400 Momentum - Lowest Quintile
Index measures the performance of the securities in the S&P MidCap 400 that
exhibit the lowest persistence in their relative performance. The S&P MidCap
400 Momentum Index measures the performance of the securities in the S&P
MidCap 400 universe that exhibit persistence in their relative performance. The
S&P MidCap 400 Quality - Lowest Quintile Index measures the performance of
the 80 lowest-ranked stocks in the S&P MidCap 400 based on quality score.
Quality scores are calculated based on return on equity, accruals ratio, and
financial leverage ratio. The S&P MidCap 400 Quality Index tracks high
quality stocks in the S&P MidCap 400 by quality score, which is calculated
based on return on equity, accruals ratio, and financial leverage ratio. The
S&P MidCap 400 Enhanced Value - Lowest Quintile Index measures the
performance of the 80 lowest-ranked stocks in the S&P MidCap 400 based on
value score. Value scores are calculated using three fundamental measures: book
value-to-price, earnings-to-price, and sales-to-price. The S&P MidCap 400
Enhanced Value Index measures the performance of the top 80 stocks in the
S&P MidCap 400 with attractive valuations based on value scores calculated
using three fundamental measures: book value-to-price, earnings-to-price, and
sales-to-price. The S&P MidCap 400 Volatility - Highest Quintile Index
measures the performance of the 80 most-volatile stocks in the S&P MidCap
400, and constituents are selected based on their volatility and are then
weighted by their corresponding volatility. The S&P MidCap 400 Low
Volatility Index measures the performance of the 80 least-volatile stocks in the
S&P MidCap 400, and the index is designed to serve as a benchmark for low
volatility or low variance strategies in the U.S. mid-cap equities.
Lunt
Capital U.S. Large Cap Multi-Factor Rotation Index. The
Index utilizes Lunt Capital’s proprietary relative strength methodology to
rotate its holdings of the highest quintile components and the lowest quintile
components of the four factor-based indices of the S&P 500 Index. Each
Sub-Index is a subset of the S&P 500 Index. The S&P 500 Momentum -
Lowest Quintile Index measures the performance of the securities in the S&P
500 that exhibit the lowest persistence in their relative performance. The
S&P 500 Momentum Index measures the performance of the securities in the
S&P 500 universe that exhibit persistence in their relative performance. The
S&P 500 Quality - Lowest Quintile Index measures the performance of the 100
lowest-ranked stocks in the S&P 500 based on quality score. Quality scores
are calculated based on return on equity, accruals ratio, and financial leverage
ratio. The S&P 500 Quality Index tracks high quality stocks in the S&P
500 by quality score, which is calculated based on return on equity, accruals
ratio, and financial leverage ratio. The S&P 500 Enhanced Value - Lowest
Quintile Index measures the performance of the 100 lowest-ranked stocks in the
S&P 500 based on value score. Value scores are calculated using three
fundamental measures: book value-to-price, earnings-to-price, and
sales-to-price. The S&P 500 Enhanced Value Index measures the performance of
the top 100 stocks in the S&P 500 with attractive valuations based on value
scores calculated using three fundamental measures: book value-to-price,
earnings-to-price, and sales-to-price. The S&P 500 Volatility - Highest
Quintile Index measures the performance of the 100 most-volatile stocks in the
S&P 500, and constituents are selected based on their volatility and are
then weighted by their corresponding volatility. The S&P 500 Low Volatility
Index measures the performance of the 100 least-volatile stocks in the S&P
500, and the index is designed to serve as a benchmark for low volatility or low
variance strategies in the U.S. mid-cap equities. Constituents in the S&P
500 Low Volatility Index are weighted relative to the inverse of their
corresponding volatility, with the least volatile stocks receiving the highest
weights.
Russell
1000®
Index.
The
Russell 1000 Index measures the performance of the approximately 1,000 largest
companies in the Russell 3000®
Index, which is composed of the approximately 3,000 largest publicly-traded
companies in the U.S. The Russell 1000 Index is generally expected to represent
more than 90% of the total market capitalization of the Russell 3000 Index
and the overall market capitalization of publicly-traded U.S. equity securities.
As of June 30, 2024, the average weighted market capitalization of
companies in the Russell 1000 Index was $931.1 billion. To be included in the
Russell 1000 Index, a company must not be structured as a royalty trust, limited
liability company, registered investment company (including closed-end funds,
mutual funds, and ETFs), blank-check company, special-purpose acquisition
company, or limited partnership.
S&P
500®
Index and S&P 500 Sector Indices.
The
S&P 500 Index measures the performance of approximately 500 leading
companies in the United States representing approximately 80% of the total U.S.
market capitalization. The S&P 500 Sector Total Return Indices are
comprised of companies included in the S&P 500 Index that are classified as
members of a particular GICS®
sector as reflected in the name of each sector index.
S&P
Global 1200 Index. The
S&P Global 1200 measures the performance of large-cap stocks from major
markets around the world. The S&P Global 1200 is a global composite index
composed of constituents from seven country and regional equity benchmarks. The
index is float-adjusted market capitalization (FMC) weighted.The S&P Global
1200 Index provides efficient exposure to the global equity market. Capturing
approximately 70% of global market capitalization, it is
constructed
as a composite of 7 headline indices, many of which are accepted leaders in
their regions. These include the S&P 500 (US), S&P Europe 350, S&P
TOPIX 150 (Japan), S&P/TSX 60 (Canada), S&P/ASX All Australian 50,
S&P Asia 50 and S&P Latin America 40.
S&P
Developed Ex-U.S. LargeCap Index.
The S&P Developed Ex-U.S. LargeCap Index is a rules-based, float-adjusted,
market capitalization-weighted index comprised of large-capitalization stocks
providing coverage of the developed markets excluding the United States.
S&P
900®
Pure Growth Index. The
S&P 900 Pure Growth Index measures the performance of growth stocks using
three factors: sales growth, the ratio of earnings change to price, and
momentum. The constituents of the index are drawn from the S&P 900, which
combines the S&P 500 and S&P MidCap 400®.
As of June 30, 2024, the average market capitalization of companies in the
S&P 900 Pure Growth Index was $196.3 billion.
S&P
MidCap 400 Index.
The
S&P MidCap 400 Index measures the performance of approximately 400 mid-sized
companies in the United States. As of June 30, 2024, the average market
capitalization of companies in the S&P MidCap 400 Index was $8.9
billion.
S&P
SmallCap 600®
Index. The
S&P SmallCap 600 Index measures the performance of approximately 600
small-size companies in the United States. As of June 30, 2024, the average
market capitalization of companies in the S&P SmallCap 600 Index was $3.1
billion.
S&P
U.S. High Yield Corporate Bond Index.
The S&P U.S. High Yield Corporate Bond Index is designed to track the
performance of U.S. dollar-denominated, high-yield corporate bonds issued by
companies whose country of risk uses an official G-10 currency, excluding those
countries that are members of the United Nations Eastern European Group (EEG).
Qualifying securities must have a below-investment-grade rating (based on the
lowest of S&P Global Ratings, Moody’s, and Fitch) and maturities of one or
more months.
S&P
U.S. Treasury Bond 7–10 Year Index. The
S&P U.S. Treasury Bond 7–10 Year Index is designed to measure the
performance of U.S. Treasury bonds maturing in 7 to 10 years.
S&P U.S.
Treasury Bond 20+ Year Index. The
S&P U.S. Treasury Bond 20+ Year Index is designed to measure the performance
of U.S. Treasury bonds maturing in 20 or more years.
S&P
Biotechnology Select Industry Total Return Index. The
S&P Biotechnology Select Industry Index represents the biotechnology
sub-industry portion of the S&P Total Markets Index (“S&P TMI”). The
S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ
National Market, and NASDAQ Small Cap exchanges. The S&P Biotechnology
Select Industry Index is a modified equal weight index and consisted of 136
companies as of June 30, 2024.
Dow
Jones Internet Composite Index.
The Dow Jones Internet Composite Index is designed to measure the performance of
the 40 largest and most actively traded stocks of U.S. companies in the internet
industry. To be eligible for the index, a company must derive at least 50% of
cash flows from the internet.
3-Month
US Treasury Bills. The
US Treasury issues Treasury bills, including 3-Month US Treasury bills, at a
discount at public auctions, typically on a weekly basis. Two types of bids are
accepted. With a competitive bid, the bidder specifies the discount rate it will
accept. With a non-competitive bid, the bidder agrees to accept the discount
rate set at auction. At the close of an auction, the US Treasury accepts all
non-competitive bids that comply with the auction rules, and then accepts
competitive bids in ascending order in terms of their discount rates (from
lowest to highest) until the quantity of accepted bids reaches the offering
amount. All bidders, competitive and non- competitive, will receive the same
discount rate or yield at the highest accepted bid. This highest accepted bid is
the auction high rate. Each of the Trendpilot Indices references the most recent
auction high rate for 3-Month US Treasury bills as reported by the U.S.
Department of the Treasury and displayed on Bloomberg page “USB3MTA Index” in
calculating any of the Trendpilot Indices.
3-Month
U.S. Treasury Bills Index. The
3-month U.S. Treasury Bills Index is designed to act as a
U.S. dollar-denominated cash position through the use of nine 3-month
U.S. Treasury Bills (T-Bills) with maturities ranging from 30–91 days in
duration. The 3-month U.S. Treasury Bills Index is an equal weighted
index.
iBoxx
USD Liquid High Yield Index.
The iBoxx USD Liquid High Yield Index is designed to track the performance of
liquid U.S. dollar-denominated high yield bonds, selected to provide a balanced
representation of the U.S. dollar high yield corporate bond
universe.
iBoxx
USD Treasuries 7-10 Year Index.
The iBoxx USD Treasuries 7-10 Year Index is designed to measure the performance
of U.S. Treasury bonds maturing in 7 to 10 years.
Foreign
Exchange Transactions for PAEU. A
forward foreign currency exchange contract involves an obligation to purchase or
sell a specific amount of currency at a future date, at a price and on a date
set at the time of the contract. The cost to a Fund of engaging in forward
currency contracts varies with factors such as the currency involved, the length
of the contract period and the market conditions prevailing as the contract is
struck.
Secondary
markets generally do not exist for forward currency contracts, with the result
that closing transactions generally can be made for forward currency contracts
only by negotiating directly with the counterparty. Thus, there can be no
assurance that a Fund will in fact be able to close out a forward currency
contract at a favorable price prior to maturity.
PAEU
will segregate liquid assets that will be marked-to-market daily to meet its
forward contract commitments to the extent required by applicable regulations.
The Fund may enter into forward currency contracts or maintain a net exposure to
such contracts only if (i) the consummation of the contracts would not obligate
the Fund to deliver an amount of foreign currency in excess of the value of its
portfolio securities or other assets denominated in that currency, or (ii) the
Fund maintains cash or liquid securities in a segregated account in an amount
not less than the value of its total assets committed to the consummation of the
contract and not covered as provided in (i) above, as marked-to-market
daily.
Pacer
WealthShield Index Risk Ratio Effect. The
Pacer WealthShield Index utilizes a systematic risk management strategy that
directs the Index’s exposure to U.S. equity securities, U.S. Treasury
securities, or a mix of each. On each Selection Date, the Pacer WealthShield
Index determines whether exposure for the following month should be Equity
Exposure or Fixed Income Exposure based on the Risk Ratio. If the Risk Ratio is
trending upward (i.e.,
the Risk Ratio is at or above its 5-month exponential moving average), the Index
will be in Equity Exposure for the following month. If the Risk Ratio is
trending downward (i.e.,
the Risk Ratio is below its 5-month exponential moving average), the Index will
be in Fixed Income Exposure for the following month.
If
the Risk Ratio dictates that the Index will be in Equity Exposure for the
following month, the Index will select the five Equity Components with the best
performance over the past six months and will allocate 20% to each such Equity
Component. However, if an Equity Component selected for inclusion in the Index
is in a downward trend (i.e.,
the Equity Component’s value is below its 7-month exponential moving average),
the Index’s 20% allocation to such Equity Component will be allocated instead to
3-month U.S. Treasury bills. Consequently, in its Equity Exposure, the Index
could have as much as 100% allocated to U.S. equity securities or as much as
100% allocated to 3-month U.S. Treasury bills.
If
the Risk Ratio dictates that the Index will be in Fixed Income Exposure for the
following month, the Index will be 100% allocated to the 20+ Year Index.
However, if the value of the 20+ Year Index is in a downward trend (i.e.,
its value is below its 7-month exponential moving average), the Index will
instead be 100% allocated to 3-month U.S. Treasury bills. Consequently, in its
Fixed Income Exposure, the Index will be either 100% allocated to the 20+ Year
Index or 100% allocated to 3-month U.S. Treasury bills.
FTSE
China A All-Share Index.
All China A-Share classes of equity in issue are eligible for inclusion in the
FTSE China A All-Share Index. The eligibility for securities to be included
in the Index is based on (i) liquidity screens, (ii) free float and (iii) size.
•Liquidity
screens.
Liquidity screens are based on the security’s median daily trading volume per
month on the Shanghai Stock Exchange and Shenzhen Stock Exchange, the Shenzhen
SME Board and the Shenzhen ChiNext Board. The median trade is calculated by
ranking each daily trade total and selecting the middle ranking day. Daily
totals with zero trades are included in the ranking; therefore, a security that
fails to trade for more than half of the days in a month will have a zero median
trade. Any period of suspension will not be included in the test. The liquidity
test will be applied on a pro-rata basis where the testing period is less than
12 months.
A
security eligible for inclusion must have a minimum turnover percentage of the
shares in issue, based on the median daily trade per month. The security must
have such turnover percentage for a certain number of months prior to the full
market review in March and September. The minimum turnover percentage and the
number of months meeting such percentage are different for non-constituent
securities, existing constituents and new issues.
•Free
float.
Constituents are adjusted for free float and weighted according to how much
share capital is available for public investment. Free float adjustments seek to
overcome the supply and demand imbalance by reducing a company’s weight in an
index to take account of restricted holdings of the company’s shares that are
not freely
available
for purchase by outside investors (e.g., strategic investments by governments
and other companies, directors and holdings of other major investors). In FTSE’s
view, this achieves the most accurate and neutral market representation, and
takes into account the true opportunity set available to an investor. FTSE
adopts the actual free float (rounded to 12 decimal places). Companies with a
free float of 5% or below are not eligible for inclusion in the Index, unless
their investable market capitalizations are larger than a minimum threshold.
With this methodology, the free float of a constituent is estimated more
accurately using the information available on major shareholders in the market.
Besides, constituent’s investability weight will be further adjusted when there
is a limited foreign room available.
•Size.
The 50 largest companies by full market capitalization of the FTSE China A All
Cap Free Index are selected to form the Index.
The
FTSE China A All-Share Index is reviewed by FTSE on a quarterly basis in
March, June, September and December to ensure that the index continues to
reflect market reality. A schedule of periodic reviews, advance notification of
changes to the Index constituents, a full set of ground rules for the management
of the Index and the most updated list of Index constituents is provided on
FTSE’s website (currently http://www.ftse.com/sites/indices/china-a50). The
Index methodology is subject to change from time to time, and investors should
refer to this website for up-to-date information about the Index methodology.
FTSE publishes the latest index level (Ticker: A50CNHN) on Bloomberg and
Reuters, updated at market close each day.
Pacer
Data Transmission and Communication Revolution Index and Pacer Global Supply
Chain Infrastructure Index. At
the time of each quarterly rebalance and reconstitution, constituents of the
applicable Index must meet the following Investibility Requirements: (1) be a
publicly-traded equity security; (2) be listed on a major stock exchange; (3)
have a market capitalization of at least US$1 billion; (4) have a 3-month
average daily value traded greater than or equal to US$2 million; and (5) be the
primary listing security. In addition, a company cannot be included in the
applicable Index if the company is currently involved with bankruptcy
proceedings; has entered into a materially binding/definitive agreement which
would otherwise disqualify the security from Index inclusion; or is listed on
exchanges based in India, China (A-shares only), Saudi Arabia, or Russia. The
list of excluded countries may be modified by the Index Provider from time to
time with a primary goal of avoiding countries with excessive and/or onerous
capital controls, trading constraints, regulatory hurdles, or other operational
difficulties that would prevent an investor from fully replicating the index on
their own.
Additional
Information about the Principal Risks of Investing in the Funds
This
section provides additional information regarding the principal risks described
under “Principal Risks of Investing in the Fund” in each of the Fund Summaries.
The principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a ‘principal risk’ of investing in the Funds as noted in the
respective Fund Summaries, regardless of the order in which they appear. The
factors below apply to each Fund as indicated in the following table; additional
information about each such risk and how it impacts each Fund that is subject
thereto is set forth below the chart. Each of the factors below could have a
negative impact on the applicable Fund’s performance and trading
prices.
|
|
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|
|
|
|
|
|
|
|
|
|
| |
|
PTLC |
PTMC |
PTNQ |
PTEU |
PTIN |
PTBD |
TRND |
Calculation
Methodology Risk |
X |
X |
X |
X |
X |
X |
X |
Concentration
Risk |
|
|
X |
|
|
| |
Currency
Exchange Rate Risk |
|
|
|
X |
X |
| X |
Equity
Market Risk |
X |
X |
X |
X |
X |
| X |
ETF
Risks |
X |
X |
X |
X |
X |
X |
X |
European
Investments Risk |
|
|
|
X |
|
| |
Fixed
Income Risk |
X |
X |
X |
X |
X |
X |
X |
Foreign
Securities Risk |
|
|
|
X |
X |
| X |
Geographic
Concentration Risk |
|
|
|
X |
X |
| |
—
Risks Related to Investing in Japan |
|
|
|
|
X |
| |
—
Risks Related to Investing in Western Europe |
|
|
|
|
X |
| |
Government
Obligations Risk |
X |
X |
X |
X |
X |
X |
X |
High
Portfolio Turnover Risk |
X |
X |
X |
X |
X |
X |
|
High
Yield Risk |
|
|
|
|
| X |
X |
Large-Capitalization
Investing Risk |
X |
|
X |
X |
X |
| X |
Management
Risk |
|
|
|
|
| X |
|
Mid-Capitalization
Investing Risk |
|
X |
|
X |
X |
| X |
Non-Diversification
Risk |
|
|
X |
|
X |
| X |
Other
Investment Companies Risk |
|
|
|
|
X |
| X |
Passive
Investment Risk |
X |
X |
X |
X |
X |
X |
X |
Sector
Risk |
|
|
X |
|
|
| |
—
Communication Services Sector Risk |
|
|
X |
|
|
| |
—
Consumer Discretionary Sector Risk |
|
|
X |
|
|
| |
—
Information Technology Sector Risk |
|
|
X |
|
|
| |
Tracking
Risk |
X |
X |
X |
X |
X |
X |
X |
Trend
Lag Risk |
X |
X |
X |
X |
X |
X |
X |
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
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|
|
|
|
|
| |
| COWZ |
CALF |
BUL |
GCOW |
ECOW |
ICOW |
COWG |
HERD |
CAFG |
Calculation
Methodology Risk |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Concentration
Risk |
X |
X |
X |
X |
X |
X |
X |
| X |
Currency
Exchange Rate Risk |
|
|
| X |
X |
X |
| X |
|
Emerging
Markets Risk |
|
|
|
| X |
|
|
| |
Equity
Market Risk |
X |
X |
X |
X |
X |
X |
X |
X |
X |
ETF
Risks |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Foreign
Securities Risk |
|
|
| X |
X |
X |
| X |
|
Geographic
Concentration Risk |
|
|
| X |
X |
X |
|
| |
Growth
Stock Risk |
|
|
|
|
|
|
|
| X |
—
Risks Related to Investing in Brazil |
|
|
|
| X |
|
|
| |
—
Risks Related to Investing in China |
|
|
|
| X |
|
|
| |
—
Risks Related to Investing in Europe |
|
|
|
|
|
X |
|
| |
—
Risks Related to Investing in Japan |
|
|
|
|
|
X |
|
| |
—
Risks Related to Investing in Russia |
|
|
|
| X |
|
|
| |
—
Risks Related to Investing in Taiwan |
|
|
|
| X |
|
|
| |
High
Portfolio Turnover Risk |
X |
X |
X |
| X |
X |
|
| |
Large-Capitalization
Investing Risk |
X |
| X |
X |
X |
X |
X |
X |
|
Limited
Operating History |
|
|
|
|
|
| X |
| |
Mid-Capitalization
Investing Risk |
X |
X |
X |
| X |
X |
| X |
|
New
Fund Risk |
|
|
|
|
|
|
|
| X |
Non-Diversification
Risk |
|
| X |
| X |
| X |
X |
X |
Other
Investment Companies Risk |
|
|
|
| X |
|
| X |
|
Passive
Investment Risk |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Sector
Risk |
X |
X |
X |
| X |
X |
X |
X |
X |
—
Consumer Discretionary Sector Risk |
X |
X |
X |
|
|
X |
|
| |
—
Energy Sector Risk |
X |
| X |
|
|
|
|
| |
—
Health Care Sector Risk |
X |
X |
X |
|
|
|
|
| X |
—
Industrials Sector Risk |
|
X |
X |
|
|
X |
|
| X |
—
Information Technology Sector Risk |
|
X |
X |
|
|
| X |
| X |
—
Materials Sector Risk |
|
|
|
|
|
X |
|
| |
Small-Capitalization
Investing Risk |
|
X |
|
| X |
|
| X |
X |
Style
Risk |
X |
X |
X |
X |
|
X |
| X |
|
Tracking
Risk |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
|
|
|
| |
|
PEXL |
PIEL |
AFTY |
PAEU |
PWS |
SZNG |
SZNE |
VIRS |
Calculation
Methodology Risk |
X |
X |
X |
X |
X |
X |
X |
X |
Concentration
Risk |
X |
X |
|
|
X |
|
| X |
Currency
Exchange Rate Risk |
|
X |
|
X |
|
X |
| |
Emerging
Markets Risk |
|
|
X |
|
|
|
| |
Equity
Market Risk |
X |
X |
X |
X |
X |
X |
X |
X |
ETF
Risks |
X |
X |
X |
X |
X |
X |
X |
X |
European
Investments Risk |
|
X |
|
X |
|
|
| |
Fixed
Income Risk |
|
|
|
|
X |
|
| |
Foreign
Sales Risk |
X |
X |
|
|
|
|
| |
Foreign
Securities Risk |
|
X |
X |
X |
|
X |
| |
Forward
Currency Contracts Risk |
|
|
|
X |
|
|
| |
Geographic
Concentration Risk |
|
X |
|
X |
|
|
| |
Government
Obligations Risk |
|
|
|
|
X |
|
| |
Hedging
Risk |
|
|
|
X |
|
|
| |
High
Portfolio Turnover Risk |
|
|
|
|
X |
X |
X |
|
Index
Criteria Risk |
|
|
|
|
|
|
| X |
Index
Tracking Error Risk |
|
| X |
|
|
|
| |
International
Operations Risk |
|
|
|
|
|
|
| |
Large-Capitalization
Investing Risk |
X |
X |
X |
X |
X |
X |
X |
X |
Mid-Capitalization
Investing Risk |
X |
X |
|
X |
|
|
| X |
Monthly
Exposure Risk |
|
|
|
|
X |
|
| |
New
Fund Risk |
|
X |
|
X |
| X |
| |
Non-Diversification
Risk |
|
X |
|
X |
| X |
| X |
Non-U.S.
Currency Risk |
|
| X |
|
|
|
| |
Other
Investment Companies Risk |
|
|
|
|
X |
X |
X |
|
Passive
Investment Risk |
X |
X |
X |
X |
X |
X |
X |
X |
Pharmaceutical
Companies Risk |
|
|
|
|
|
|
| X |
REIT
Investment Risk |
|
|
|
| X |
|
| |
Risk
of Investing in China |
|
| X |
|
|
|
| |
Risk
of Investing in Issuers listed on the ChiNext Board |
|
| X |
|
|
|
| |
Sector
Risk |
X |
| X |
|
X |
X |
X |
X |
—
Consumer Discretionary Sector Risk |
|
|
|
|
| X |
| |
—
Consumer Staples Sector Risk |
|
| X |
|
| X |
X |
|
—
Energy Sector Risk |
|
|
|
|
|
|
| |
—
Financials Sector Risk |
|
| X |
|
X |
|
| |
—
Health Care Sector Risk |
|
|
|
|
| X |
X |
X |
—
Industrials Sector Risk |
|
|
|
|
X |
X |
| |
—
Information Technology Sector Risk |
X |
|
|
|
X |
X |
| |
—
Materials Sector Risk |
|
|
|
|
| X |
| |
—
Real Estate Sector Risk |
|
|
|
|
|
|
| |
—
Utilities Sector Risk |
|
|
|
|
|
|
| |
Sector
Rotation Risk |
|
|
|
|
| X |
X |
|
Small-Capitalization
Investing Risk |
|
|
|
|
|
|
| |
Tracking
Risk |
X |
X |
|
X |
X |
X |
X |
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
ROOM |
PAD |
RXRE |
INDS |
SRVR |
ALTL |
PAMC |
PALC |
Alternator
Strategy Risk |
X |
X |
X |
X |
X |
X |
X |
X |
—
High Beta Risk |
|
|
|
|
| X |
| |
—
Low Volatility Risk |
|
|
|
|
| X |
X |
X |
—
Momentum Investing Risk |
|
|
|
|
|
| X |
X |
—
Quality Investing Risk |
|
|
|
|
|
| X |
X |
—
Value Investing Risk |
|
|
|
|
|
| X |
X |
Calculation
Methodology Risk |
X |
X |
X |
X |
X |
X |
X |
X |
Concentration
Risk |
X |
X |
X |
X |
X |
|
| |
Currency
Exchange Rate Risk |
|
|
|
X |
X |
|
| |
Equity
Market Risk |
X |
X |
X |
X |
X |
X |
X |
X |
ETF
Risks |
X |
X |
X |
X |
X |
X |
X |
X |
Foreign
Securities Risk |
|
|
|
X |
X |
|
| |
Geographic
Concentration Risk |
|
|
|
X |
X |
|
| |
—
Risks Related to Investing in Canada |
|
|
|
X |
X |
|
| |
High
Portfolio Turnover Risk |
X |
X |
X |
|
| X |
X |
X |
International
Operations Risk |
X |
X |
X |
X |
X |
|
| |
Large-Capitalization
Investing Risk |
X |
X |
X |
X |
X |
X |
| X |
Limited
Operating History |
|
|
|
|
| X |
X |
X |
Mid-Capitalization
Investing Risk |
X |
X |
X |
X |
X |
| X |
|
New
Fund Risk |
X |
X |
X |
|
|
|
| |
Non-Diversification
Risk |
X |
X |
X |
X |
X |
X |
X |
X |
Passive
Investment Risk |
X |
X |
X |
X |
X |
X |
X |
X |
Real
Estate Companies Risk |
X |
X |
X |
X |
X |
|
| |
REIT
Investment Risk |
X |
X |
X |
X |
X |
|
| |
Sector
Risk |
|
|
|
|
| X |
X |
X |
—
Consumer Staples Sector Risk |
|
|
|
|
| X |
| |
—
Industrials Sector Risk |
|
|
|
|
|
| X |
|
—
Information Technology Sector Risk |
|
|
|
|
|
|
| X |
—
Utilities Sector Risk |
|
|
|
|
| X |
| |
Small-Capitalization
Investing Risk |
X |
X |
X |
X |
X |
|
| |
Tax
Risk |
X |
X |
X |
X |
X |
|
| |
Tracking
Risk |
X |
X |
X |
X |
X |
X |
X |
X |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| FLRT |
|
| TRFK |
SHPP |
Associated
Risks of Data & Digital Revolution Companies |
|
|
| X |
|
Associated
Risks of Industrials and Logistics Companies |
|
|
|
| X |
Asset-Backed
Securities Risk |
X |
|
|
| |
Calculation
Methodology |
|
|
| X |
X |
CLO
Risk |
X |
|
|
| |
CMBS
Risk |
X |
|
|
| |
Currency
Exchange Rate Risk |
|
|
| X |
X |
Dividends
Risk |
|
|
|
| |
Equity
Market Risk |
|
|
| X |
X |
ETF
Risks |
X |
|
| X |
X |
Fixed
Income Risk |
X |
|
|
| |
Floating
Rate Loan Risk |
X |
|
|
| |
Foreign
Securities Risk |
X |
|
| X |
X |
Futures
Contract Risk |
|
|
|
| |
Geographic
Concentration Risk |
|
|
| X |
X |
—
Risks Related to Investing in Europe |
|
|
| X |
X |
—
Risks Related to Investing in Hong Kong |
|
|
|
| X |
—
Risks Related to Investing in South Korea |
|
|
|
| X |
—
Risks Related to Investing in Japan |
|
|
|
| X |
Government
Obligations Risk |
|
|
|
| |
High
Yield Securities Risk |
X |
|
|
| |
Index
Provider Risk |
|
|
|
| |
International
Operations Risk |
|
|
| X |
X |
Large-Capitalization
Investing Risk |
|
|
| X |
X |
Limited
Operating History |
|
|
| X |
X |
Liquidity
Risk |
X |
|
|
| |
Management
Risk |
X |
|
|
| |
Market
Risk |
X |
|
|
| |
Mid-Capitalization
Investing Risk |
|
|
| X |
X |
Non-Diversification
Risk |
|
|
| X |
X |
Other
Investment Companies Risk |
|
|
|
| |
Passive
Investment Risk |
|
|
| X |
X |
Privately
Issued Securities Risk |
X |
|
|
| |
Sector
Risk |
X |
|
| X |
X |
—
Consumer Discretionary Sector Risk |
X |
|
|
| |
—
Industrials Sector Risk |
X |
|
| X |
X |
—
Information Technology Sector Risk |
|
|
| X |
X |
Tracking
Risk |
|
|
|
| |
Tracking
Error Risk |
|
|
| X |
X |
Trading
Halt Risk |
|
|
|
| |
Alternator
Strategy Risk
Because
the Lunt Indices will be comprised of certain Sub-Indices each month, the Index
may be comprised of securities during a period when such securities underperform
the securities of one or more other Sub-Indices.
◦High
Beta Risk.
High beta investing entails investing in securities that are more volatile based
on historical market index data. Volatile stocks may be subject to sharp swings
in value, and may change unpredictably, affecting the value of such equity
securities and, consequently, the value of Shares. High beta stocks are likely
to underperform the broader market during periods of rapidly declining stock
prices.
◦Low
Volatility Risk.
Low volatility investing entails investing in securities that are seen as having
a lower risk profile than the overall markets. However, a portfolio comprised of
low volatility stocks may not produce investment exposure that has lower
variability to changes in such stocks’ price levels. Low volatility stocks are
likely to underperform the broader market during periods of rapidly rising stock
prices.
◦Momentum
Investing Risk. Momentum
investing is subject to the risk that the securities may be more volatile than
the market as a whole, or that the returns on securities that previously have
exhibited price momentum or proximity to price peaks are less than returns on
other styles of investing. Momentum can turn quickly, and stocks that previously
have exhibited high momentum may not experience continued positive momentum. In
addition, investor perceptions of the value of a company may turn quickly, and
stocks that have recently set multiple price peaks may not continue to do so,
may be considered overvalued, and may decline faster than other
investments.
◦Quality
Investing Risk. Securities
that have previously been identified with quality characteristics may not
continue to be quality companies, and the returns of such securities may be less
than returns on other styles of investing. In addition, there may be periods
when the quality style of investing is out of favor and therefore, the
performance of the Fund may suffer.
◦Value
Investing Risk. A
“value” style of investing could produce poor results relative to other funds,
even in a rising market, if the methodology used by the Index to determine a
company’s “value” or prospects for exceeding earnings expectations or market
conditions is wrong. In addition, “value stocks” can continue to be undervalued
by the market for long periods of time.
Asset-Backed
Securities Risk
Asset-backed
securities represent interests in a pool of assets other than mortgages, such as
home equity loans, automobile receivables or credit card receivables. Most
asset-backed securities involve consumer or commercial debts with maturities of
less than 10 years. However, almost any type of fixed-income asset (including
other fixed-income securities) may be used to create an asset-backed security.
Asset-backed securities may take the form of commercial paper, notes or
pass-through certificates. A structured asset-backed security is a multiclass
instrument that is typically backed by a pool of auto loans, credit card
receivables, home equity loans or student loans.
Unscheduled
prepayments of asset-backed securities may result in a loss of income if the
proceeds are invested in lower-yielding securities. Conversely, in a rising
interest rate environment, a declining prepayment rate will extend the average
life of many asset-backed securities, which increases the risk of depreciation
due to future increases in market interest rates. In addition, issuers of
asset-backed securities may have limited ability to enforce the security
interest in the underlying assets, and credit enhancements (if any) may be
inadequate in the event of default. Asset-backed securities may experience
losses on the underlying assets as a result of certain rights provided to
consumer debtors under federal and state law. The value of asset-backed
securities may be affected by the factors described above and other factors,
such as interest rate risk, the availability of information concerning the pool
and its structure, the creditworthiness of the servicing agent for the pool, the
originator of the underlying assets or the entities providing credit
enhancements and the ability of the servicer to service the underlying
collateral. The value of asset-backed securities representing interests in a
pool of utilities receivables may be adversely affected by changes in government
regulations. Under certain market conditions, asset-backed securities may be
less liquid and may be difficult to value. If a structured asset-backed security
is subordinated to other classes backed by the same pool of collateral, the
likelihood that it will make payments of principal may be substantially
limited.
Associated
Risks of Data and Digital Revolution Companies
Data
and digital revolution companies include companies that develop and provide
goods and services related to the transmission of data and communications.
Transmission and communications services companies are subject to extensive
government regulation. The costs of complying with governmental regulations,
delays or failure to receive required regulatory approvals, or the enactment of
new adverse regulatory requirements may adversely affect the business of such
companies. Such companies can are also be subject to intense competition and
thus affected by mergers or consolidations by and among customers, competition
with alternative technologies such as wireless communications (including with 5G
and other technologies), product compatibility, consumer preferences, rapid
product obsolescence, and research and development of new products.
Technological innovations may make the products and services of such companies
obsolete. As a result, the value of the Fund’s shares may rise and fall more
than the value of shares of a fund that invests in securities of companies in a
broader range of industries. In addition, at times, the data and digital
revolution companies may be out of favor and underperform other industries or
groups of industries.
Associated
Risks of Industrials and Logistics Companies
Industrials
and Logistics companies support the global supply chain. These companies may be
adversely affected by a downturn in economic conditions that can result in
decreased demand for shipping, ports, trade routes, and freight. Such companies
may also be significantly affected by changes in fuel prices, which may be very
volatile, the imposition of tariffs or trade wars, changes in labor relations or
availability, labor strikes, insurance costs, commodities prices in general,
international politics and conflicts, changes in transportation patterns,
changes to shipping and air freight routes, weather patterns and events,
including hurricane activity, road conditions, pandemic diseases, the
congestion, blockage or shutdown of key routes, ports, and canals, commodity
prices, taxes, tariffs, trade wars, imposition of emissions standards and other
environment-related rules and regulations, domestic or international politics
and conflicts, including war or threat of war, computer and/or software
malfunction, logistics interference, piracy, cyber attacks and terrorism.
Industrials and Logistics companies may also be highly dependent on aircraft,
ships, trucks, heavy machinery, technology, or related equipment from a small
number of suppliers, and consequently, issues affecting the availability,
reliability, safety, or longevity of such equipment may have a significant
effect on the operations and profitability of such companies. In addition,
regulatory changes and competition from foreign companies subject to more
favorable government regulation may affect the success of these
companies.
Calculation
Methodology Risk
A
Fund that seeks to track the performance of an Index is subject to calculation
methodology risk. The Index relies directly or indirectly on various sources of
information to assess the criteria of issuers included in the Index, including
information that may be based on assumptions and estimates. Neither the Fund,
the Index Provider, or the Adviser or the Sub-Adviser (as applicable) can offer
assurances that the Index’s calculation methodology or sources of information
will provide an accurate assessment of included issuers or a correct valuation
of securities, nor can they guarantee the availability or timeliness of the
production of the Index.
CLO
Risk
A
CLO is a trust typically collateralized by a pool of loans, which may include,
among others, domestic and foreign senior secured loans, senior unsecured loans,
and subordinate corporate loans, including loans that may be rated below
investment grade or equivalent unrated loans. CLO tranches can experience
substantial losses due to actual defaults, increased sensitivity to defaults due
to collateral default and disappearance of protecting tranches, market
anticipation of defaults.
For
a CLO, the cash flows from the trust are split into two or more portions, called
tranches, varying in risk and yield. The riskiest portion is the “equity”
tranche which bears the bulk of defaults from the bonds or loans in the trust
and serves to protect the other, more senior tranches from default in all but
the most severe circumstances. Since it is partially protected from defaults, a
senior tranche from a CLO trust typically has higher ratings and lower yields
than their underlying securities, and can be rated investment grade. Despite the
protection from the equity tranche, CLO tranches can experience substantial
losses due to actual defaults, increased sensitivity to defaults due to
collateral default and disappearance of protecting tranches, market anticipation
of defaults, as well as aversion to CLO securities as a class.
CMBS
Risk
The
Fund will invest in CMBS. CMBS are not backed by the full faith and credit of
the U.S. government and are subject to risk of default on the underlying
mortgages. The value of the collateral securing CMBS may decline, be
insufficient to meet the obligations of the borrower, or be difficult to
liquidate. As a result, CMBS may not be fully collateralized and may decline
significantly in value. CMBS may also react differently to changes in interest
rates than other bonds and the prices of CMBS may reflect adverse economic and
market conditions. Small movements in interest rates may significantly reduce
the value of CMBS. The CMBS in which the Fund is expected to invest are subject
to the risks of the underlying mortgage loans. Commercial mortgage loans are
secured by commercial property and are subject to risks of delinquency and
foreclosure, and risks of loss. The ability of a borrower to repay a loan
secured by an income-producing property typically is dependent primarily upon
the successful operation of such property rather than upon the existence of
independent income or assets of the borrower. If the net operating income of the
property is reduced, the borrower’s ability to repay the loan may be impaired.
Net operating income of an income-producing property can be affected by, among
other things, tenant mix, success of tenant businesses, property management
decisions, property location and condition, competition from comparable types of
properties, changes in laws that increase operating expense or limit rents that
may be charged, any need to address environmental contamination at the property,
the occurrence of any uninsured casualty at the property, changes in national,
regional or local economic conditions and/or specific industry segments,
declines
in regional or local real estate values, declines in regional or local rental or
occupancy rates, increases in interest rates, real estate tax rates and other
operating expenses, changes in governmental rules, regulations and fiscal
policies, including environmental legislation, acts of God, terrorism, social
unrest and civil disturbances.
In
the event of any default under a mortgage, the Fund will bear a risk of loss of
principal to the extent of any deficiency between the value of the collateral
and the principal and accrued interest of the commercial mortgage loan.
Foreclosure of a commercial mortgage loan can be an expensive and lengthy
process which could have a substantial negative effect on the Fund’s anticipated
return on the foreclosed mortgage loan. Stressed conditions in the markets for
CMBS and mortgage-related assets as well as the broader financial markets have
in the past resulted in a temporary but significant contraction in liquidity for
CMBS. To the extent that the market for CMBS suffers such a contraction,
securities that were previously considered liquid could become temporarily
illiquid, and Aristotle Pacific may experience delays or difficulty in selling
assets at the prices at which the Fund carries such assets, which may result in
a loss to the Fund. There is no way to predict reliably when such market
conditions could re-occur or how long such conditions could persist. In the
event of a severe market contraction precipitated by general market turmoil,
economic conditions, changes in prevailing interest rates or otherwise, the Fund
may have to consider selling its holdings at a loss including at prices below
the current value on the Fund’s books, borrowing money to satisfy redemptions in
accordance with the Fund’s borrowing policy, suspending redemptions, or other
extraordinary measures. In addition, if the Fund needed to sell large blocks of
investments to raise cash, those sales could further reduce prices, particularly
for lower-rated and unrated securities.
Concentration
Risk
Concentration
of investments may increase the risk of loss, including losses due to adverse
occurrences affecting the Fund more than the market as a whole, to the extent
that the Fund’s investments are concentrated in the securities of a particular
issuer or issuers, country, group of countries, region, market, industry, group
of industries, sector or asset class. In addition, at times, an industry or
group of industries in which the Fund is concentrated may be out of favor and
underperform other industries or groups of industries.
Currency
Exchange Rate Risk
Changes
in currency exchange rates and the relative value of non-U.S. currencies will
affect the value of the Fund’s investments and the value of your Shares. Because
the Fund’s NAV is determined on the basis of U.S. dollars, the U.S. dollar value
of your investment in the Fund may go down if the value of the local currency of
the non-U.S. markets in which the Fund invests depreciates against the U.S.
dollar. This is true even if the local currency value of securities in the
Fund’s holdings goes up. Conversely, the dollar value of your investment in the
Fund may go up if the value of the local currency appreciates against the U.S.
dollar. The value of the U.S. dollar measured against other currencies is
influenced by a variety of factors. These factors include: national debt levels
and trade deficits, changes in balances of payments and trade, domestic and
foreign interest and inflation rates, global or regional political, economic or
financial events, monetary policies of governments, actual or potential
government intervention, and global energy prices. Political instability, the
possibility of government intervention and restrictive or opaque business and
investment policies may also reduce the value of a country’s currency.
Government monetary policies and the buying or selling of currency by a
country’s government may also influence exchange rates. Currency exchange rates
can be very volatile and can change quickly and unpredictably. As a result, the
value of an investment in the Fund may change quickly and without warning, and
you may lose money.
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.
Emerging
Markets Risk
Investments
in securities and instruments traded in developing or emerging markets, or that
provide exposure to such securities or markets, can involve additional risks
relating to political, economic, or regulatory conditions not associated with
investments in U.S. securities and instruments. For example, developing and
emerging markets may be subject to (i) greater market volatility, (ii)
lower trading volume and liquidity, (iii) greater social, political and economic
uncertainty,
(iv)
governmental controls on foreign investments and limitations on repatriation of
invested capital, (v) lower disclosure, corporate governance, auditing and
financial reporting standards, (vi) fewer protections of property rights,
(vii) restrictions on the transfer of securities or currency, and (viii)
settlement and trading practices that differ from those in U.S. markets. Each of
these factors may impact the ability of the Fund to buy, sell or otherwise
transfer securities, adversely affect the trading market and price for Shares
and cause the Fund to decline in value.
•Capital
Controls and Sanctions Risk.
Economic
conditions, such as volatile currency exchange rates and interest rates,
political events, military action and other conditions may, without prior
warning, lead to government intervention (including intervention by the U.S.
government with respect to foreign governments, economic sectors, foreign
companies and related securities and interests) and the imposition of capital
controls and/or sanctions, which may also include retaliatory actions of one
government against another government, such as seizure of assets. Capital
controls and/or sanctions include the prohibition of, or restrictions on, the
ability to transfer currency, securities or other assets. Levies may be placed
on profits repatriated by foreign entities (such as the Fund). Capital controls
and/or sanctions may also impact the ability of the Fund to buy, sell or
otherwise transfer securities or currency, negatively impact the value and/or
liquidity of such instruments, adversely affect the trading market and price for
Shares, and cause the Fund to decline in value.
◦Geopolitical
Risk.
Some
countries and regions in which the Fund invests have experienced security
concerns, war or threats of war and aggression, terrorism, economic uncertainty,
natural and environmental disasters and/or systemic market dislocations that
have led, and in the future may lead, to increased short-term market volatility
and may have adverse long-term effects on the U.S. and world economies and
markets generally. Such geopolitical and other events may also disrupt
securities markets and, during such market disruptions, the Fund’s exposure to
the other risks described herein will likely increase. Each of the foregoing may
negatively impact the Fund’s investments.
Equity
Market Risk
Equity
securities may experience sudden, unpredictable drops in value or long periods
of decline in value. This may occur because of factors that affect securities
markets generally or factors affecting specific industries, sectors or
companies. Common stocks are generally exposed to greater risk than other types
of securities, such as preferred stock and debt obligations, because common
stockholders generally have inferior rights to receive payment from issuers.
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value as market confidence in and
perceptions of their issuers change. These investor perceptions are based on
various and unpredictable factors including: expectations regarding government,
economic, monetary and fiscal policies; inflation and interest rates; economic
expansion or contraction; and global or regional political, public health,
cyber, economic and banking crises. If you held common stock, or common stock
equivalents, of any given issuer, you would generally be exposed to greater risk
than if you held preferred stocks and debt obligations of the issuer because
common stockholders, or holders of equivalent interests, generally have inferior
rights to receive payments from issuers in comparison with the rights of
preferred stockholders, bondholders, and other creditors of such issuers. Other
conditions affecting the general economy, including political, public health,
cyber, or economic instability at the local, regional, or global level and
pandemics, epidemics, or other similar circumstances in one or more countries or
regions may also affect the market value of a security.
Beginning
in the first quarter of 2020, financial markets in the United States and around
the world experienced extreme and, in many cases, unprecedented volatility and
severe losses due to the global pandemic caused by COVID-19, a novel
coronavirus. The pandemic has resulted in a wide range of social and economic
disruptions, including closed borders, voluntary or compelled quarantines of
large populations, stressed healthcare systems, reduced or prohibited domestic
or international travel, and supply chain disruptions affecting the United
States and many other countries. Some sectors of the economy and individual
issuers have experienced particularly large losses as a result of these
disruptions, and such disruptions may continue for an extended period of time or
reoccur in the future to a similar or greater extent. It is unknown how long
circumstances related to the pandemic will persist, whether they will reoccur in
the future, whether efforts to support the economy and financial markets will be
successful, and what additional implications may follow from the pandemic. The
impact of these events and other epidemics or pandemics in the future could
adversely affect Fund performance.
ETF
Risks
The
Fund is an ETF and, as a result of an ETF’s structure, is exposed to the
following risks:
◦APs,
Market Makers, and Liquidity Providers Concentration Risk. The
Fund may have a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, Shares of a Fund may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services, or (ii) market makers and/or liquidity providers
exit the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Cash
Redemption Risk (PTBD, ECOW, AFTY, TRFK, and SHPP only). To
the extent the Fund’s investment strategy requires it to redeem Shares for cash
or to otherwise include cash as part of its redemption proceeds, the Fund may be
required to sell or unwind portfolio investments to obtain the cash needed to
distribute redemption proceeds. This may cause the Fund to recognize a capital
gain that it might not have recognized if it had made a redemption in-kind. As a
result, the Fund may pay out higher annual capital gain distributions than if
the in-kind redemption process was used.
◦Costs
of Buying or Selling Shares. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers, as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of Shares. In
addition, secondary market investors will also incur the cost of the difference
between the price at which an investor is willing to buy Shares (the “bid”
price) and the price at which an investor is willing to sell Shares (the “ask”
price). This difference in bid and ask prices is often referred to as the
“spread” or “bid/ask spread.” The bid/ask spread varies over time for Shares
based on trading volume and market liquidity, and is generally lower if Shares
have more trading volume and market liquidity and higher if Shares have little
trading volume and market liquidity. Further, a relatively small investor base
in the Fund, asset swings in the Fund and/or increased market volatility may
cause increased bid/ask spreads. Due to the costs of buying or selling Shares,
including bid/ask spreads, frequent trading of Shares may significantly reduce
investment results and an investment in Shares may not be advisable for
investors who anticipate regularly making small investments.
◦Shares
of the Fund May Trade at Prices Other Than NAV. As
with all ETFs, Shares may be bought and sold in the secondary market at market
prices. Although it is expected that the market price of Shares will approximate
the Fund’s NAV, there may be times when the market price of Shares is more than
the NAV intra-day (premium) or less than the NAV intra-day (discount) due to
supply and demand of Shares or during periods of market volatility. This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for Shares in the secondary
market, in which case such premiums or discounts may be significant. Certain
securities held by the Fund may trade on foreign exchanges that are closed when
the Fund’s primary listing exchange is open, and the Fund may experience
premiums and discounts greater than those of ETFs that hold securities that are
traded only in the United States.
◦Trading. Although
Shares are listed for trading on its applicable Exchange and may be listed or
traded on U.S. and non-U.S. stock exchanges other than its applicable Exchange,
there can be no assurance that an active trading market for such Shares will
develop or be maintained. Trading in Shares may be halted due to market
conditions or for reasons that, in the view of its applicable Exchange, make
trading in Shares inadvisable. In addition, trading in Shares on its applicable
Exchange is subject to trading halts caused by extraordinary market volatility
pursuant to each Exchange’s “circuit breaker” rules, which temporarily halt
trading on such Exchange when a decline in the S&P 500 Index during a single
day reaches certain thresholds (e.g., 7%, 13%, and 20%). Additional rules
applicable to each Exchange may halt trading in Shares when extraordinary
volatility causes sudden, significant swings in the market price of Shares.
There can be no assurance that Shares will trade with any volume, or at all, on
any stock exchange. In stressed market conditions, the liquidity of Shares may
begin to mirror the liquidity of a Fund’s underlying portfolio holdings, which
can be significantly less liquid than Shares and this could lead to differences
between the market price of the shares of the Fund and the underlying value of
those Shares.
European
Investments Risk
The
Fund is more exposed to the economic and political risks of Europe and of the
European countries in which it invests than funds whose investments are more
geographically diversified. Adverse economic and political events in Europe may
cause the Fund’s investments to decline in value. The economies and markets of
European countries are often closely connected and interdependent, and events in
one country in Europe can have an adverse impact on other European countries.
The Fund makes investments in securities of issuers that are domiciled in, or
have significant operations in,
member
countries of the EU. The EU requires compliance by member countries with
restrictions on inflation rates, deficits, interest rates and debt levels, as
well as fiscal and monetary controls, each of which may significantly affect
every country in Europe, including those countries that are not members of the
EU. Changes in imports or exports, changes in governmental or EU regulations on
trade, changes in the exchange rate of the euro (the common currency of certain
EU countries), the default or threat of default by an EU member country on its
sovereign debt, including, without limitation, the pending threat of
default by Greece, and/or an economic recession in an EU member country may have
a significant adverse effect on the economies of EU member countries and their
trading partners.
The
European financial markets have experienced volatility and adverse trends in
recent years due to concerns about economic downturns or rising government debt
levels in several European countries, including Greece, Ireland, Italy, Portugal
and Spain. These events have adversely affected the exchange rate of the euro
and may continue to significantly affect other European countries. Responses to
the financial problems by European governments, central banks and others,
including austerity measures and reforms, may not produce the desired results,
may result in social unrest and may limit future growth and economic recovery or
have other unintended consequences. Further defaults or restructurings by
governments and other entities of their debt could have additional adverse
effects on economies, financial markets and asset valuations around the world.
In addition, one or more countries may abandon the euro and/or withdraw from the
EU. The impact of these actions, especially if they occur in a disorderly
fashion, is not clear but could be significant and far-reaching. The occurrence
of terrorist incidents throughout Europe also could impact financial markets.
The impact of these events is not clear but could be significant and
far-reaching and adversely affect the value of the Fund. The Fund’s investments
could be negatively impacted by any economic or political instability in any
European country.
The
United Kingdom’s departure from the EU (referred to as “Brexit”) continues to
cause significant uncertainty and may adversely impact the financial results and
operations of various European companies and economies. The effects of Brexit
will largely depend on any agreements the UK makes to retain access to EU
markets. Brexit may result in legal and tax uncertainty and divergent national
laws and regulations as the UK determines which EU laws to replace or replicate.
The UK may be less stable than it has been in recent years and investments in
the UK may be more volatile. Additionally, Brexit could lead to global economic
uncertainty and result in significant volatility in the global stock markets and
currency exchange rate fluctuations. Any of these effects of Brexit, and other
consequences that are difficult to predict at this time, could adversely affect
the value of a Fund’s investments.
Fixed
Income Risk
The
value of direct or indirect investments in fixed income securities will
fluctuate with changes in interest rates. Typically, a rise in interest rates
causes a decline in the value of fixed income securities. On the other hand, if
rates fall, the value of the fixed income securities generally increases. In
general, the market price of fixed income securities with longer maturities will
increase or decrease more in response to changes in interest rates than
shorter-term securities. In recent periods, governmental financial regulators,
including the U.S. Federal Reserve, have taken steps to increase interest rates.
Changes in government intervention may have adverse effects on investments,
volatility, and illiquidity in debt markets.
◦Call
Risk.
During periods of falling interest rates, an issuer of a callable bond held by
the Fund may “call” or repay the security before its stated maturity, and the
Fund may have to reinvest the proceeds in securities with lower yields, which
would result in a decline in the Fund’s income, or in securities with greater
risks or with other less favorable features.
◦Credit
Risk.
Credit risk refers to the possibility that the issuer of a security will not be
able to make principal and interest payments when due. Changes in an issuer’s
credit rating or the market’s perception of an issuer’s creditworthiness may
also affect the value of the Underlying Investment’s investment in that issuer.
The degree of credit risk depends on both the financial condition of the issuer
and the terms of the obligation.
◦Event
Risk.
Event risk is the risk that corporate issuers may undergo restructurings, such
as mergers, leveraged buyouts, takeovers, or similar events financed by
increased debt. As a result of the added debt, the credit quality and market
value of a company’s bonds and/or other debt securities may decline
significantly.
◦Extension
Risk.
When interest rates rise, certain obligations will be paid off by the obligor
more slowly than anticipated, causing the value of these securities to fall.
Rising interest rates tend to extend the duration of securities, making them
more sensitive to future changes in interest rates. The value of longer-term
securities generally changes more in response to changes in interest rates than
the value of shorter-term securities. As a result, in a period of rising
interest rates, securities may exhibit additional volatility and may lose
value.
◦Interest
Rate Risk.
Generally, the value of fixed income securities will change inversely with
changes in interest rates. As interest rates rise, the market value of fixed
income securities tends to decrease. Conversely, as interest rates fall, the
market value of fixed income securities tends to increase. This risk will be
greater for long-term securities than for short-term securities. An Underlying
Investment may take steps to attempt to reduce the exposure of its portfolio to
interest rate changes; however, there can be no guarantee that the Fund will
take such actions or that the Fund will be successful in reducing the impact of
interest rate changes on the portfolio. Changes in government intervention may
have adverse effects on investments, volatility, and illiquidity in debt
markets.
◦Prepayment
Risk.
When interest rates fall, certain obligations will be paid off by the obligor
more quickly than originally anticipated, and the Fund may have to invest the
proceeds in securities with lower yields. In periods of falling interest rates,
the rate of prepayments tends to increase (as does price fluctuation) as
borrowers are motivated to pay off debt and refinance at new lower rates. During
such periods, reinvestment of the prepayment proceeds by the management team
will generally be at lower rates of return than the return on the assets that
were prepaid. Prepayment reduces the yield to maturity and the average life of
the security.
Floating
Rate Loan Risk
Floating
rate loans (or bank loans) are usually rated below investment grade. The market
for floating rate loans may be subject to irregular trading activity, wide
bid/ask spreads, and extended trade settlement periods. The Fund’s investment in
loans may take the form of a participation or an assignment. Loan participations
typically represent direct participation in a loan to a borrower, and generally
are offered by financial institutions or lending syndicates. The Fund may
participate in such syndications, or can buy part of a loan, becoming a part
lender. When purchasing loan participations, the Fund assumes the credit risk
associated with the borrower and may assume the credit risk associated with an
interposed financial intermediary. If the lead lender in a typical lending
syndicate becomes insolvent, enters FDIC receivership or, if not FDIC insured,
enters into bankruptcy, the Fund may incur certain costs and delays in receiving
payment or may suffer a loss of principal and/or interest. When the Fund is a
purchaser of an assignment, it succeeds to all the rights and obligations under
the loan agreement of the assigning bank or other financial intermediary and
becomes a lender under the loan agreement with the same rights and obligations
as the assigning bank or other financial intermediary. For example, if a loan is
foreclosed, the Fund could become part owner of any collateral, and would bear
the costs and liabilities associated with owning and disposing of the
collateral.
Floating
rate loans generally are subject to restrictions on transfer, and the Fund may
be unable to sell its bank loans at a time when it may otherwise be desirable to
do so or may be able to sell them only at prices that are less than their fair
market value. The Fund may find it difficult to establish a fair value for loans
it holds. Further, the trading market for floating rate loans could be impacted
by regulatory action or reforms around the manner in which floating interest
rates are determined. If a published rate is unavailable, the rate of interest
on a floating rate loan could effectively become fixed, which would in turn
adversely affect the value of the floating rate loan. In addition, floating rate
loans generally are subject to extended settlement periods in excess of seven
days, which may impair the Fund’s ability to sell or realize the full value of
its loans in the event of a need to liquidate such loans. A loan may not be
fully collateralized and can decline significantly in value. In addition, the
Fund’s access to collateral may be limited by bankruptcy or other insolvency
laws. Further, loans held by the Fund may not be considered securities and,
therefore, purchasers, such as the Fund, may not be entitled to rely on the
anti-fraud protections of the federal securities laws.
If
the Fund acquires a participation in a loan, the Fund may not be able to control
the exercise of remedies that the lender would have under the loan and likely
would not have any rights against the borrower directly. Loans made to finance
highly leveraged corporate acquisitions may be especially vulnerable to adverse
changes in economic or market conditions. A loan may also be in the form of a
bridge loan, which are designed to provide temporary or “bridge” financing to a
borrower, pending the sale of identified assets or the arrangement of
longer-term loans or the issuance and sale of debt obligations. A borrower’s use
of a bridge loan involves a risk that the borrower may be unable to locate
permanent financing to replace the bridge loan, which may impair the borrower’s
perceived creditworthiness.
◦Senior
Loans Risk. The
risks associated with senior loans are similar to the risks of junk bonds,
although senior loans typically are senior and secured, whereas junk bonds often
are subordinated and unsecured. While senior loans are less risky than junior
loans, they still have significant risk. Investments in senior loans, similar to
junk bonds, typically are below investment grade and are considered speculative
because of the credit risk of their issuers. Such companies are more likely to
default on their payments of interest and principal owed, and such defaults
could reduce the Fund’s NAV and income distributions. An economic downturn
generally leads to a
higher
nonpayment rate, and a senior loan may lose significant value before a default
occurs. There is no assurance that the liquidation of the collateral would
satisfy the claims of the borrower’s obligations in the event of the non-payment
of scheduled interest or principal, or that the collateral could be readily
liquidated. Economic and other events (whether real or perceived) can reduce the
demand for certain senior loans or senior loans generally, which may reduce
market prices. Senior loans and other debt securities also are subject to the
risk of price declines and to increases in prevailing interest rates, although
floating-rate debt instruments such as senior loans in which the Fund may be
expected to invest are substantially less exposed to this risk than fixed-rate
debt instruments. No active trading market may exist for certain senior loans,
which may impair the ability of the Fund to realize full value in the event of
the need to liquidate such assets. Adverse market conditions may impair the
liquidity of some actively traded senior loans. Longer interest rate reset
periods generally increase fluctuations in value as a result of changes in
market interest rates.
Some
loans are subject to the risk that a court, pursuant to fraudulent conveyance or
other similar laws, could subordinate the loans to presently existing or future
indebtedness of the borrower or take other action detrimental to lenders,
including the Fund, such as invalidation of loans or causing interest previously
paid to be refunded to the borrower. Investments in loans also are subject to
the risk of changes in legislation or state or federal regulations. If such
legislation or regulations impose additional requirements or restrictions on the
ability of financial institutions to make loans, the availability of loans for
investment by the Fund may be adversely affected. Many loans are not registered
with the SEC or any state securities commission and often are not rated by any
nationally recognized rating service. Generally, there is less readily
available, reliable information about most loans than is the case for many other
types of securities. Although a loan may be senior to equity and other debt
securities in a borrower’s capital structure, such obligations may be
structurally subordinated to obligations of the borrower’s
subsidiaries.
There
is no organized exchange on which loans are traded and reliable market
quotations may not be readily available. Therefore, elements of judgment may
play a greater role in valuation of loans than for securities with a more
developed secondary market and the Fund may not realize full value in the event
of the need to sell a loan. To the extent that a secondary market does exist for
certain loans, the market may be subject to volatility, irregular trading
activity, wide bid/ask spreads, decreased liquidity and extended trade
settlement periods, any of which may impair the Fund’s ability to sell loans
within its desired time frame or at an acceptable price and its ability to
accurately value existing and prospective investments. Extended trade settlement
periods for certain loans may result in cash not being immediately available to
the Fund upon sale of the loan. As a result, the Fund may have to sell other
investments with shorter settlement periods or engage in borrowing transactions
to raise cash to meet its obligations.
◦Covenant-Lite
Loan Risk. Covenant-lite
loans contain fewer maintenance covenants, or no maintenance covenants at all,
than traditional loans and may not include terms that allow the lender to
monitor the financial performance of the borrower and declare a default if
certain criteria are breached. This may hinder the Fund’s ability to reprice
credit risk associated with the borrower and reduce the Fund’s ability to
restructure a problematic loan and mitigate potential loss. As a result, the
Fund’s exposure to losses on such investments is increased, especially during a
downturn in the credit cycle. A significant portion of floating rate loans may
be “covenant-lite” loans.
◦Loan
Participation Risk. A
loan participation agreement involves the purchase of a share of a loan made by
a bank to a company in return for a corresponding share of borrower’s principal
and interest payments. The principal credit risk associated with acquiring loan
participation interests is the credit risk associated with the underlying
corporate borrower. There is also a risk that there may not be a readily
available market for loan participation interests and, in some cases, this could
result in the Fund disposing of such securities at a substantial discount from
face value or holding such securities until maturity.
Foreign
Sales Risk
Investments
in companies that derive a significant portion of their sales to foreign
customers may be subject to risk of loss due to unfavorable changes in currency
exchange rates, political, economic or social changes or instability in foreign
countries, events affecting the transportation, shipping or delivery of goods to
customers, and changes in U.S. or foreign laws or regulations affecting exports.
In addition, conditions and changes in regulatory, tax, or economic policy in a
country could significantly affect the market in that country and in surrounding
or related countries and have a negative impact on the Fund’s performance.
Currency developments or restrictions, political and social instability, and
changing economic conditions have resulted in significant market
volatility.
Foreign
Securities Risk
Investments
in foreign securities involve certain risks that may not be present with
investments in U.S. securities. For example, investments in foreign securities
may be subject to risk of loss due to foreign currency fluctuations or to
political or economic instability. There may be less information publicly
available about a foreign issuer than a U.S. issuer. Foreign issuers may be
subject to different accounting, auditing, financial reporting and investor
protection standards than U.S. issuers. Investments in foreign securities may be
subject to withholding or other taxes and may be subject to additional trading,
settlement, custodial, and operational risks. With respect to certain countries,
there is the possibility of government intervention and expropriation or
nationalization of assets. Because legal systems differ, there is also the
possibility that it will be difficult to obtain or enforce legal judgments in
certain countries. Since foreign exchanges may be open on days when the Fund
does not price its Shares, the value of foreign securities or an Underlying ETF
holding foreign securities may change on days when shareholders will not be able
to purchase or sell Shares. Conversely, Shares may trade on days when foreign
exchanges are closed. Each of these factors can make investments in the Fund
more volatile and potentially less liquid than other types of
investments.
Forward
Currency Contracts Risk
Forward
currency contracts and other currency management strategies may substantially
change the Fund’s exposure to currency exchange rates and could result in losses
to the Fund if currencies do not perform as expected or if the Fund is unable to
quickly enter or exit such contracts. The use of forward currency contracts may
also create counterparty, leveraging, and valuation risk. Forward contracts
require collateralization, and the commitment of a large portion of the Fund’s
assets as collateral could impede portfolio management.
◦Counterparty
Risk.
The Fund may engage in investment transactions or other contracts with third
parties (i.e., “counterparties”),
including over-the-counter forward foreign currency contracts. The Fund bears
the risk that the counterparty to these contracts becomes bankrupt, defaults on
its obligations or otherwise fails to honor its obligations. The Fund may
experience significant delays in obtaining any recovery in a bankruptcy or other
reorganization proceeding. The Fund may obtain only limited recovery or may
obtain no recovery in these circumstances. If a counterparty defaults on its
payment obligations, the Fund will lose money and the value of an investment in
Fund Shares may decrease.
◦Leveraging
Risk. The
Fund’s use of forward currency contracts may result in leverage. Leverage
creates investment exposure to gains and losses in excess of the amounts
invested by the Fund. The Fund will identify liquid assets on its books or
otherwise cover transactions that may give rise to leverage to the extent
required by applicable law. The Fund may have to liquidate assets to meet or
satisfy obligations or coverage requirements that arise because of the use of
leverage. Leverage could cause the Fund to be more volatile, resulting in larger
gains or losses in response to changes in the values to which the Fund has
leveraged exposure than if the Fund had made direct investments. Use of leverage
involves special risks and is highly speculative. Leverage will magnify any
losses, and such losses may be significant.
◦Valuation
Risk.
Forward foreign currency contracts are subject to the risk that they may be
difficult to value and/or valued incorrectly. This risk may be especially
pronounced if the markets for the Fund’s forward foreign currency contracts are
or become illiquid. This risk could cause the Fund to lose money and the value
of an investment in Fund Shares to decrease.
Futures
Contract Risk
The
successful use of futures contracts draws upon the Adviser or Sub-Adviser’s, as
applicable, skill and experience with respect to such instruments and is subject
to special risk considerations. The primary risks associated with the use of
futures contracts, which may adversely affect the Fund’s NAV and total return,
are (a) the imperfect correlation between the change in market value of the
instruments held by the Fund and the price of the futures contract; (b) possible
lack of a liquid secondary market for a futures contract and the resulting
inability to close a futures contract when desired; (c) the possibility that the
counterparty will default in the performance of its obligations; and (d) if the
Fund has insufficient cash, it may have to sell securities from its portfolio to
meet daily variation margin requirements, and the Fund may have to sell
securities at a time when it maybe disadvantageous to do so. The S&P
Dividend Futures held by the Fund only reflect ordinary dividends paid on the
common stocks included the S&P 500. Any special dividends paid by a company
will not be reflected in the settlement value of the S&P Dividend Futures. A
special dividend is a non-recurring dividend distributed by a company that is
separate from the regular cycle of dividends and may be larger than a company’s
typical dividend payment, such as the spin-off of assets of the company being
distributed to shareholders. The Fund may not
perform
as well if the actual future growth in dividends paid on common stocks is below
the expected growth in dividends, as reflected in the market prices at which the
Fund buys the S&P Dividend Futures.
Geographic
Concentration Risk
The
Fund is subject to geographic concentration risk, which is the chance that world
events—such as political upheaval, financial troubles, or natural disasters—will
adversely affect the value of securities issued by companies in foreign
countries or regions. Because the Fund may invest a large portion of its assets
in securities of companies located in any one country or region, the Fund’s
performance may be hurt disproportionately by the poor performance of its
investments in that area.
◦Risks
Related to Investing in Brazil. Investments
in securities of Brazilian companies are subject to regulatory, economic and
political risks related to the significant influence that the Brazilian
government exercises over its economy. The Brazilian economy has historically
been characterized by frequent, and occasionally drastic, intervention by the
Brazilian government. Government efforts to check inflation and shape other
aspects of the economy have involved, among others, the setting of wage and
price controls, blocking access to bank accounts, imposing exchange controls and
limiting imports. There can be no assurances that similar measures will not be
instituted in the future. Such measures may have significant effects on the
Fund’s investments.
Brazil,
like many other Latin American countries, has historically experienced high
rates of inflation and may do so in the future. An increase in prices for
petroleum, the depreciation of the real and future governmental
measures seeking to maintain the value of the real in relation to the
U.S. dollar, may trigger increases in inflation in Brazil and may slow the rate
of growth of the Brazilian economy. Brazil also continues to suffer from a high
level of debt and public spending, which may stifle economic growth, contribute
to prolonged periods of recession or lower the country’s sovereign debt rating,
all of which may adversely impact the Fund’s investments.
Investments
in Brazilian securities may be subject to certain restrictions on foreign
investment. Brazilian law provides that whenever a serious imbalance in Brazil’s
balance of payments exists or is anticipated, the Brazilian government may
impose temporary restrictions on the remittance to foreign investors of the
proceeds of their investment in Brazil and on the conversion of Brazilian
currency into foreign currency. The likelihood of such restrictions may be
affected by the extent of Brazil’s foreign currency reserves, the availability
of sufficient foreign currency in the foreign exchange markets on the date a
payment is due, the size of Brazil’s debt service burden relative to the economy
as a whole and political constraints to which Brazil may be subject. There can
be no assurance that the Brazilian government will not impose restrictions or
restrictive exchange control policies in the future.
Brazil
is heavily dependent on export to the United States, China and other countries
in Latin America, especially fellow member states in the Mercosur trade bloc.
Reduction in spending on Brazilian products and services, or adverse economic
events, such as inflation, high interest rates, currency devaluation, political
upheaval and high unemployment rates, in any of the trading partner states may
impact the Brazilian economy. Further, many economies in Latin America,
including Brazil’s, are heavily dependent on commodity exports and may be
particularly sensitive to fluctuations in commodity prices.
Despite
rapid development in recent years, Brazil still suffers from high levels of
corruption, crime and income disparity. There is the possibility that such
conditions may lead to social unrest and political upheaval in the future, which
may have adverse effects on the Fund’s investments.
The
market for Brazilian securities is influenced by the flow of international
capital and economic and market conditions of certain countries, especially
emerging market countries in Latin America. Adverse economic conditions or
developments in other emerging market countries have at times significantly
affected the availability of credit in the Brazilian economy and resulted in
considerable outflows of funds and declines in the amount of foreign currency
invested in Brazil.
◦Risks
Related to Investing in Canada.
The Canadian economy is reliant on the sale of natural resources and
commodities, which can pose risks such as the fluctuation of prices and the
variability of demand for exportation of such products. Changes in spending on
Canadian products by the economies of other countries or changes in any of these
economies may cause a significant impact on the Canadian economy.
◦Risks
Related to Investing in China. Investing
in securities of Chinese companies involves additional risks, including, but not
limited to: the economy of China differs, often unfavorably, from the U.S.
economy in such
respects
as structure, general development, government involvement, wealth distribution,
rate of inflation, growth rate, allocation of resources and capital
reinvestment, among others; the central government has historically exercised
substantial control over virtually every sector of the Chinese economy through
administrative regulation and/or state ownership; and actions of the Chinese
central and local government authorities continue to have a substantial effect
on economic conditions in China. In addition, previously the Chinese government
has from time to time taken actions that influence the prices at which certain
goods may be sold, encourage companies to invest or concentrate in particular
industries, induce mergers between companies in certain industries and induce
private companies to publicly offer their securities to increase or continue the
rate of economic growth, control the rate of inflation or otherwise regulate
economic expansion.
◦Risks
Related to Investing in Europe.
Please
see “European Investment Risk” above.
◦Risks
Related to Investing in Hong Kong.
Investments in the securities of issuers that trade on an exchange in Hong Kong
subject the Fund to risks specific to China and Hong Kong. Hong Kong may be
subject to considerable degrees of economic, political and social instability.
Hong Kong is a developing market and demonstrates significantly higher
volatility from time to time in comparison to developed markets. Over the past
25 years, the Chinese government has undertaken reform of economic and market
practices and is expanding the sphere of private ownership of property in China.
However, Chinese markets generally continue to experience inefficiency,
volatility and pricing anomalies resulting from governmental influence, a lack
of publicly available information and/or political and social instability.
Internal social unrest or confrontations with other neighboring countries,
including military conflicts in response to such events, may also disrupt
economic development in China and result in a greater risk of currency
fluctuations, currency convertibility, interest rate fluctuations and higher
rates of inflation. Export growth continues to be a major driver of China’s
rapid economic growth. Reduction in spending on Chinese products and services,
institution of tariffs or other trade barriers, or a downturn in any of the
economies of China’s key trading partners may have an adverse impact on the
Chinese economy. Further, any attempt by China to tighten its control over Hong
Kong’s political, economic, legal or social policies may result in an adverse
effect on Hong Kong’s markets.
◦Risks
Related to Investing in Japan. The
Japanese economy may be subject to considerable degrees of economic, political
and social instability, which could have a negative impact on Japanese
securities. Since the year 2000, Japan’s economic growth rate has remained
relatively low and it may remain low in the future. In addition, Japan is
subject to the risk of natural disasters, such as earthquakes, volcanoes,
typhoons and tsunamis. Additionally, decreasing U.S. imports, new trade
regulations, changes in the U.S. dollar exchange rates, a recession in the
United States or continued increases in foreclosure rates may have an adverse
impact on the economy of Japan. Japan also has few natural resources, and any
fluctuation or shortage in the commodity markets could have a negative impact on
Japanese securities.
◦Risks
Related to Investing in Russia. Investing
in Russian securities involves significant risks, including legal, regulatory
and economic risks that are specific to Russia. In addition, investing in
Russian securities involves risks associated with the settlement of portfolio
transactions and loss of the Fund’s ownership rights in its portfolio securities
as a result of the system of share registration and custody in Russia.
Russia’s
large-scale invasion of Ukraine on February 24, 2022 has led to various
countries imposing economic sanctions on certain Russian individuals and Russian
corporate and banking entities. A number of jurisdictions have also instituted
broader sanctions on Russia. Further, as of the date of this Prospectus, the
Russian securities markets effectively have not been open for trading by foreign
investors since February 28, 2022. Russia’s military incursion and resulting
sanctions could have a severe adverse effect on both regional and global
economies, which in turn could affect the value of the Fund’s
investments.
For
these or other reasons, the Fund could limit or suspend purchases of Creation
Units. During any period that creation activity is affected, the Shares could
trade at a significant premium to their net asset value. In the case of a period
during which creations are suspended, the Fund could experience substantial
redemptions, which may cause the Fund to experience increased transaction costs
and make greater taxable distributions to shareholders of the Fund. The Fund may
also change its investment objective or principal investment strategies. The
Fund may also have to liquidate all or a portion of its assets, which may be at
unfavorable prices.
Despite
recent reform and privatization, the Russian government continues to control a
large share of economic activity in the region. The Russian government owns
shares in corporations in a range of sectors including energy production and
distribution, automotive, transportation, and telecommunications. Additionally,
because Russia
produces
and exports large volumes of oil and gas, the Russian economy is particularly
sensitive to the price of oil and gas on the world market, and a decline in the
price of oil and gas could have a significant negative impact on the Russian
economy.
The
value of the Russian ruble may be subject to a high degree of fluctuation. The
Fund’s exposure to the Russian ruble and changes in value of the Russian ruble
versus the U.S. dollar may result in reduced returns to the Fund. Moreover, the
Fund may incur costs in connection with conversions between U.S. dollars and the
Russian ruble. In addition, current political and economic events in Russia and
the effects of the recent global economic crisis on the Russian economy may have
significant adverse effects on the Russian ruble and on the value and liquidity
of the Fund’s investments.
◦Risks
Related to Investing in South Korea.
Investments in South Korean issuers may subject the Fund to legal, regulatory,
political, currency, security, and economic risks that are specific to South
Korea. In addition, economic and political developments of South Korea’s
neighbors may have an adverse effect on the South Korean economy.
◦Risks
Related to Investing in Taiwan. Taiwan's
geographic proximity and history of political contention with China have
resulted in ongoing tensions between the two countries. These tensions may
materially affect the Taiwanese economy and its securities market. Taiwan's
economy is export-oriented, so it depends on an open world trade regime and
remains vulnerable to fluctuations in the world economy. Rising labor costs and
increasing environmental consciousness have led some labor-intensive industries
to relocate to countries with cheaper work forces, and continued labor
outsourcing may adversely affect the Taiwanese economy. Taiwan is also subject
to the risk of natural disasters, such as typhoons and tsunamis, which could
negatively affect the Fund.
◦Risks
Related to Investing in Western Europe.
Most developed countries in Western Europe are members of the EU, and many are
also members of the European Monetary Union (EMU), which requires compliance
with restrictions on inflation rates, deficits, and debt levels. Unemployment in
certain European nations is historically high and several countries face
significant debt problems. These conditions can significantly affect every
country in Europe. The euro is the official currency of the EU. Funds that
invest in Europe may have significant exposure to the euro and events affecting
the euro. Recent market events affecting several of the EU member countries have
adversely affected the sovereign debt issued by those countries, and ultimately
may lead to a decline in the value of the euro. A significant decline in the
value of the euro may produce unpredictable effects on trade and commerce
generally and could lead to increased volatility in financial markets
worldwide.
Government
Obligations Risk
The
Fund may invest in securities issued by the U.S. government. The total public
debt of the United States as a percentage of gross domestic product has grown
rapidly since the beginning of the 2008-2009 financial downturn. Although high
debt levels do not necessarily indicate or cause economic problems, they may
create certain systemic risks if sound debt management practices are not
implemented. A high national debt can raise concerns that the U.S. government
will not be able to make principal or interest payments when they are due. This
increase has also necessitated the need for the U.S. Congress to negotiate
adjustments to the statutory debt limit to increase the cap on the amount the
U.S. government is permitted to borrow to meet its existing obligations and
finance current budget deficits. In August 2011, S&P lowered its long-term
sovereign credit rating on the U.S. In explaining the downgrade at that time,
S&P cited, among other reasons, controversy over raising the statutory debt
limit and growth in public spending. On August 2, 2019, following passage by
Congress, the President of the United States signed the Bipartisan Budget Act of
2019, which suspends the statutory debt limit through July 31, 2021. Any
controversy or ongoing uncertainty regarding the statutory debt limit
negotiations may impact the U.S. long-term sovereign credit rating and may cause
market uncertainty. As a result, market prices and yields of securities
supported by the full faith and credit of the U.S. government may be adversely
affected.
Hedging
Risk
Derivatives,
such as forward currency contracts, used by the Fund to offset its exposure to
the euro may not perform as intended. When a derivative is used as a hedge
against a position that the Fund holds, any loss generated by the derivative
generally should be substantially offset by any gains on the hedged investment,
and vice versa. While hedging can reduce or eliminate losses, it can also reduce
or eliminate gains. Hedges are sometimes subject to imperfect matching between
the hedging transaction and the risk intended to be hedged. There can be no
assurance that the Fund’s hedging transactions
will
be effective. The Fund does not attempt to mitigate other factors which may have
a greater impact on the Fund’s equity holdings and its performance than currency
exposure and will only attempt to mitigate currency risk during the periods
described above under “Principal Investment Strategies of the Fund.” The value
of an investment in the Fund could be significantly and negatively affected
during periods when the Fund is currency hedged if the euro appreciates relative
to the dollar and the value of the Fund’s equity investments appreciates at the
same time.
High
Portfolio Turnover Risk
At
times, the Fund may have a portfolio turnover rate substantially greater than
100%. However, SEC rules regarding the calculation of a Fund’s portfolio
turnover rate require the Fund to exclude the effect of certain transactions,
such as the in-kind receipt or delivery of securities, and consequently, the
Fund may report a portfolio turnover rate substantially less than 100%. A high
portfolio turnover rate would result in correspondingly greater transaction
costs, including brokerage commissions, dealer markups and other transaction
costs on the sale of securities and on reinvestment in other securities and may
result in reduced performance and the distribution to shareholders of additional
capital gains for tax purposes. These factors may negatively affect the Fund’s
performance.
High
Yield Risk
High
yield securities (or “junk bonds”) entail greater risk of loss of principal
because of their greater exposure to credit risk. High yield debt obligations
are speculative investments and may also be less liquid than higher quality
securities, and may cause income and principal losses for the Fund. The market
for high yield securities is generally thinner and less active than the market
for higher quality securities. If there is a “flight to safety,” the market’s
perception of “high yield” securities may turn negative, and these types of
securities may become classified as “high risk.” Consequently, high yield
securities and loans entail greater risk of loss of principal than securities
and loans that are investment grade rated. Investment in or exposure to high
yield (lower rated) debt instruments (also known as “junk bonds”) may involve
greater levels of interest rate, credit, liquidity and valuation risk than for
higher rated instruments. High yield debt instruments may be sensitive to
economic changes, political changes, or adverse developments specific to a
company. These securities are subject to greater risk of loss, greater
sensitivity to interest rate and economic changes, valuation difficulties, and a
potential lack of a secondary or public market for securities. High yield debt
instruments are considered predominantly speculative with respect to the
issuer’s continuing ability to make principal and interest payments and,
therefore, such instruments generally involve greater risk of default or price
changes than higher rated debt instruments. An economic downturn or period of
rising interest rates could adversely affect the market for these securities and
reduce market liquidity (liquidity risk). Less active markets may diminish the
Fund’s ability to obtain accurate market quotations when valuing the portfolio
securities and thereby give rise to valuation risk. As
a result, the value of the Fund may be subject to greater volatility than other
funds, and the Fund may be exposed to greater tracking risk (described below)
than other funds.
High
Yield Securities Risk
Securities
rated “BB+” or below by S&P or “Ba+” or below by Moody’s are known as high
yield securities and are commonly referred to as “junk bonds.” Such securities
entail greater price volatility and credit and interest rate risk than
investment-grade securities. Analysis of the creditworthiness of high yield
issuers is more complex than for higher-rated securities, making it more
difficult for Aristotle Pacific to accurately predict risk. There is a greater
risk with high yield fixed income securities that an issuer will not be able to
make principal and interest payments when due. If the Fund pursues missed
payments, there is a risk that Fund expenses could increase. In addition,
lower-rated securities may not trade as often and may be less liquid than
higher-rated securities, especially during periods of economic uncertainty or
change. As a result of all of these factors, these securities are generally
considered to be speculative.
Index
Criteria Risk
Because
the methodology of the LifeSci BioThreat Strategy Index selects securities of
issuers for non-financial reasons, the Fund may underperform the broader equity
market or other funds that do not utilize similar criteria when selecting
investments. The performance of the Index, and consequently the Fund, will not
necessarily reflect the performance of companies that have products,
technologies, and services that prepare and protect against pandemic diseases,
biological warfare, food and water safety, environmental safety and natural
disasters.
Index
Tracking Error Risk
As
with other index funds, the performance of AFTY may vary from the performance of
their respective Indexes as a result of Fund fees and expenses, the use of
representative sampling, brokerage and transaction costs, the effect of Chinese
taxes
and other factors. In addition, the Fund may not be able to invest in certain
securities included in its Index, or invest in them in the exact proportions
represented in the Index, due to market disruptions, legal restrictions or
limitations imposed by the Chinese government, certain NYSE ARCA listing
standards, or a lack of liquidity on stock exchanges in which such securities
trade. As a result, the Fund’s NAV may not exactly track the value of its Index.
CSOP Asset Management’s decision to invest in securities not included in an
Index, such as other pooled investment vehicles, may give rise to tracking
error. In addition, daily investment quotas applicable to the Shanghai-Hong Kong
Stock Connect program may restrict or preclude the ability of the Fund to invest
in securities obtained via the program, and therefore may cause the Fund’s
performance to differ from that of its Index.
Index
Provider Risk
There
is no assurance that an Index Provider or any agents that act on its behalf,
will compile an Index accurately, or that an Index will be determined,
maintained, constructed, rebalanced, calculated or disseminated accurately. As
noted herein, the Fund relies upon the Index Provider and its agents to compile,
determine, maintain, construct, rebalance, calculate (or arrange for an agent to
calculate), and disseminate each Index accurately. Any losses or costs
associated with errors made by the Index Provider or its agents generally will
be borne by the Fund and its shareholders. To correct any such error, the Index
Provider or its agents may carry out an unscheduled rebalance of an Index or
other modification of Index constituents or weightings. When the Fund in turn
rebalances its portfolio, any transaction costs and market exposure arising from
such portfolio rebalancing will be borne by the Fund and its shareholders.
Unscheduled rebalances also expose the Fund to additional tracking error risk.
Errors in respect of the quality, accuracy, and completeness of the data used to
compile the Index may occur from time to time and may not be identified and
corrected by the Index Provider for a period of time or at all, particularly
where the Index is less commonly used as a benchmark by funds or advisors. The
Index Provider and its agents rely on various sources of information to assess
the criteria of issuers included in the Index, including information that may be
based on assumptions and estimates.
International
Operations Risk
Investments
in companies with significant business operations outside of the United States
may involve certain risks that may not be present with investments in U.S.
companies. For example, international operations may be subject to risk of loss
due to foreign currency fluctuations; changes in foreign political and economic
environments, regionally, nationally, and locally; challenges of complying with
a wide variety of foreign laws, including corporate governance, operations,
taxes, and litigation; differing lending practices; differences in cultures;
changes in applicable laws and regulations in the United States that affect
international operations; changes in applicable laws and regulations in foreign
jurisdictions; difficulties in managing international operations; and obstacles
to the repatriation of earnings and cash. These and other factors can make an
investment in the Fund more volatile than other types of
investments.
Large-Capitalization
Investing
Risk
The
securities of large-capitalization companies may be relatively mature compared
to smaller companies and therefore subject to slower growth during times of
economic expansion. Large-capitalization companies may also be unable to respond
quickly to new competitive challenges, such as changes in technology and
consumer tastes.
Limited
Operating History
Prospective
investors in a new Fund have a limited track record on which to base their
investment decision. An investment in the Fund may therefore involve greater
uncertainty than an investment in a fund with a more established record of
performance. In addition, there can be no assurance that the Fund will grow to
or maintain an economically viable size, in which case it may experience greater
tracking error to its Index than it otherwise would at higher asset levels, or
it could ultimately liquidate. The Fund’s distributor does not maintain an
active market in Fund Shares.
Liquidity
Risk
In
certain circumstances, it may be difficult for the Fund to purchase and sell
particular portfolio investments due to infrequent trading in such investments.
The prices of such securities may change over time or experience significant
volatility, make it more difficult for the Fund to transact significant amounts
of such securities without an unfavorable impact on prevailing market prices, or
make it difficult for the Fund to dispose of such securities at a fair price at
the time the Fund believes it is desirable to do so. Adjustable Rate Securities
that have complex terms may have limited trading opportunities. Floating rate
loans and Adjustable Rate Securities generally are subject to extended
settlement periods in excess of seven days, which may impair the Fund’s ability
to sell or realize the full value of its loans in the event of a need to
liquidate such loans.
Management
Risk (PTBD)
To
the extent the Fund uses a representative sampling strategy to obtain exposure
to the Index, the Fund’s ability to track the performance of the Index will be
contingent on the ability of the Fund’s sub-adviser to identify a subset of
Index components whose risk, return and other characteristics closely resemble
the risk, return and other characteristics of the Index as a whole.
Management
Risk (FLRT)
FLRT
is subject to management risk because it is an actively managed portfolio. In
managing the Fund’s investment portfolio, the portfolio managers will apply
investment techniques and risk analyses that may not produce the desired result.
There can be no guarantee that the Fund will meet its investment objective(s),
meet relevant benchmarks or perform as well as other funds with similar
objectives.
Market
Risk
Overall
market risks may affect the value of the Fund. Factors such as U.S. economic
growth and market conditions, interest rate levels and political events affect
the securities markets. The prices of securities held by the Fund may decline in
response to certain events taking place in the U.S. and around the world,
including those directly involving the companies whose securities are owned by
the Fund. Securities in the Fund’s portfolio may underperform due to inflation
(or expectations for inflation), interest rates, global demand for particular
products or resources, natural disasters, pandemics, epidemics, terrorism,
regulatory events and governmental or quasi-governmental actions. There is a
risk that you may lose money by investing in the Fund.
Mid-Capitalization
Investing Risk
The
securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, public health, cyber, or economic developments than
securities of large-capitalization companies. The securities of
mid-capitalization companies generally trade in lower volumes and are subject to
greater and more unpredictable price changes than large capitalization stocks or
the stock market as a whole. Some medium capitalization companies have limited
product lines, markets, financial resources, and management personnel and tend
to concentrate on fewer geographical markets relative to large-capitalization
companies.
Mid-
and Small-Capitalization Investing Risk
The
securities of mid- and small-capitalization companies may be more vulnerable to
adverse issuer, market, political, or economic developments than securities of
large-capitalization companies. The securities of mid- and small-capitalization
companies generally trade in lower volumes and are subject to greater and more
unpredictable price changes than large capitalization stocks or the stock market
as a whole. Some smaller capitalization companies have limited product lines,
markets, financial resources, and management personnel and tend to concentrate
on fewer geographical markets relative to large-capitalization
companies.
Monthly
Exposure Risk
Because
certain Indexes may only change its exposure based on data as of the Selection
Date each month, (i) the Index’s exposure may be affected by significant market
movements at or near month end that are not predictive of the market’s
performance for the subsequent month and (ii) changes to the Index’s exposure
may lag a significant change in the market’s direction (up or down) by as long
as a month if such changes first take effect at or near the beginning of a
month. Such lags between market performance and changes to the Index’s exposure
may result in significant underperformance relative to the broader equity or
fixed income market.
New
Fund Risk
The
Fund has not yet commenced investment operations. As a result, prospective
investors have no track record or history on which to base their investment
decisions. An investment in a Fund may therefore involve greater uncertainty
than an investment in a fund with an established record of performance. In
addition, there can be no assurance that a Fund will grow to or maintain an
economically viable size, in which case it may experience greater tracking error
to its Index than it otherwise would at higher asset levels, or it could
ultimately liquidate. The Fund’s distributor does not maintain an active market
in Fund Shares.
Non-Diversification
Risk
Although
the Fund intends to invest in a variety of securities and instruments, the Fund
is considered to be non-diversified. This means that the Fund may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were a diversified fund. As a result, the Fund may be more exposed to
the risks associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may
increase the Fund’s volatility and cause the performance of a relatively smaller
number of issuers to have a greater impact on the Fund’s
performance.
Non-U.S.
Currency Risk
AFTY’s
assets will be invested primarily in the securities of issuers in China in the
form of A-Shares and the gains, losses and income received by the Fund will be
primarily in RMB. Meanwhile, the Fund will compute and expects to distribute its
income and capital gains, if any, in U.S. dollars. As a result, the Fund’s
performance may be adversely affected by changes in currency exchange rates,
which can be very volatile and change quickly and unpredictably. Such
fluctuations may be due to changes in interest rates, investors’ expectations
concerning inflation and interest rates, the imposition of currency controls or
other national or global political or economic developments. Moreover, the Fund
may incur costs in connection with conversions between U.S. dollars and foreign
currencies. Any gain or loss attributable to fluctuations in exchange rates,
between the time the Fund accrues income or gain and the time the Fund converts
such income or gain from the RMB to the U.S. dollar, is generally treated as
ordinary income or loss. Therefore, if the value of the RMB increases relative
to the U.S. dollar between the accrual of income and the time at which the Fund
converts the RMB to U.S. dollars, the Fund will recognize ordinary income when
the RMB is converted.
RMB
can be further categorized into onshore RMB (“CNY”) and offshore RMB (“CNH”),
traded outside the PRC. CNY and CNH are traded at different exchange rates and
their exchange rates may not move in the same direction. Although there has been
a growing amount of RMB held offshore, CNH cannot be freely remitted into the
PRC and is subject to certain restrictions, and vice versa. The Fund may also be
adversely affected by the exchange rates between CNY and CNH. The use of
currency transactions could result in the Fund’s incurring losses as a result of
the imposition of exchange controls, exchange rate regulation, suspension of
settlements or the inability to deliver or receive a specified currency. The
Chinese government places strict regulation on the RMB and manages the RMB so
that it has historically traded in a tight range relative to the U.S. dollar.
The Chinese government has been under pressure to manage the currency in a less
restrictive fashion, so that it is less correlated to the U.S. dollar. It is
expected that such action would increase the value of the RMB relative to the
U.S. dollar. Of course, there can be no guarantee that this will occur, or that
the RMB will move in relation to the U.S. dollar as expected. These and other
factors could have a negative impact on the Fund’s performance and increase the
volatility of an investment in the Fund.
The
Fund may also be subject to delays in converting or transferring U.S. dollars to
RMB or Hong Kong dollars (as applicable) for the purpose of purchasing A-Shares
or H-Shares, respectively, or converting RMB or Hong Kong dollars (as
applicable) to U.S. dollars to pay cash redemptions, distributions or expenses.
This may lower the Fund’s performance, because any delay could result in the
Fund missing an investment opportunity, purchasing securities at a higher price
than originally intended or incurring cash drag.
Other
Investment Companies Risk
When
the Fund invests in other investment companies it will incur higher and
duplicative expenses. There is also the risk that the Fund may suffer losses due
to the investment practices of the underlying funds. When the Fund invests in
other investment companies, the Fund will be subject to substantially the same
risks as those associated with the direct ownership of securities held by such
investment companies. Investments in ETFs are also subject to the ETF Risks
listed above.
Passive
Investment Risk
The
Fund is not actively managed and the Adviser would not sell a security due to
current or projected underperformance of a security, industry or sector, unless
that security is removed from the Index or the selling of shares of that
security is otherwise required upon a reconstitution of the Index in accordance
with the Index methodology. Other than in response to a trigger if set forth in
the Fund’s Index methodology, the Fund invests in securities included in, or
representative of securities included in the Index regardless of their
investment merits. The Fund does not take defensive positions under any market
conditions, including conditions that are adverse to the performance of the
Fund. The returns from the types of securities in which the Fund invests may
underperform returns from the various general securities markets or different
asset
classes. This may cause the Fund to underperform other investment vehicles that
invest in different asset classes. Different types of securities (for example,
large-, mid- and small-capitalization stocks) tend to go through cycles of doing
better – or worse – than the general securities markets. In the past, these
periods have lasted for as long as several years.
Pharmaceutical
Companies Risk
Pharmaceutical
companies can be significantly affected by government approval of products and
services, government regulation and reimbursement rates, pricing pressure
(including price discounting), limited product lines, patent expirations, and
intense competition. The costs associated with developing new drugs can be
significant, and the results are unpredictable. Newly developed drugs may be
susceptible to product obsolescence due to intense competition from new products
and less costly generic products. Pharmaceutical companies, may be heavily
dependent on clinical trials with uncertain outcomes and decisions made by the
governments and regulatory authorities. Pharmaceutical companies are heavily
dependent on patent protection. The expiration of patents may adversely affect
the profitability of the companies. Pharmaceutical companies are also subject to
extensive litigation based on product liability and other similar claims. A
pharmaceutical company’s valuation can often be based largely on the potential
or actual performance of a limited number of products and can accordingly be
greatly affected if one of its products proves, among other things, unsafe,
ineffective or unprofitable.
Privately
Issued Securities Risk
The
Fund may invest in privately-issued securities, including those that may be
resold only in accordance with Rule 144A or Regulation S under the 1933 Act
(“Restricted Securities”). Restricted Securities are not publicly traded and are
subject to a variety of restrictions, which limit a purchaser’s ability to
acquire or resell such securities. Delay or difficulty in selling such
securities may result in a loss to the Fund.
Real
Estate Companies Risk
The
Fund invests in real estate companies, including REITs and real estate holdings
companies, it will expose investors to the risks of owning real estate directly,
as well as to the risks that relate specifically to the way in which such
companies are organized and operated. Real estate is highly sensitive to general
and local economic conditions and developments and is characterized by intense
competition and periodic overbuilding. Many real estate companies, including
REITs, utilize leverage (and some may be highly leveraged), which increases
investment risk and the risk normally associated with debt financing, and could
potentially increase a Fund’s volatility and losses. The U.S. real estate market
may, in the future, experience and has, in the past, experienced a decline in
value, with certain regions experiencing significant losses in property values.
Exposure to such real estate may adversely affect Fund performance. In addition,
many investors may already have exposure to residential real estate through
ownership of a home. So called “Acts of God,” such as hurricanes, earthquakes,
tsunamis, and other natural disasters, as well as the effects of climate change,
terrorist activity, political unrest, or civil strife may result in physical
damage to properties or a decrease in demand, which can affect
profits.
In
addition to the foregoing risks common to most real estate companies, companies
in certain real estate sectors may have additional unique risks.
◦Risks
of Investing in the Apartments & Residential Real Estate Sector (PAD
only).
Companies in the Apartments & Residential Real Estate sector may be affected
by unique supply and demand factors that do not apply to other real estate
sectors. Residential real estate development is particularly subject to changes
in financing costs, occupancy rates, the ability to obtain zoning or other
permits or government approvals, labor costs, and scheduling delays. Residential
real estate companies may be more dependent on short-term leases (e.g.,
one year or less), which may expose such companies to the effects of declining
market rents more than other types of real estate companies. Additionally, such
companies may face significant costs associated with compliance (or failure to
comply with) the accessibility provisions of the Americans with Disabilities
Acts, the Fair Housing Act or other federal, state or local
requirements.
◦Risks
of Investing in the Data & Infrastructure Real Estate Sector (SRVR
only).
Companies in the Data & Infrastructure Real Estate sector may be affected by
unique supply and demand factors that do not apply to other real estate sectors,
such as changes in demand for communications infrastructure, consolidation of
tower sites, and new technologies that may affect demand for communications
towers. Data and infrastructure real estate companies are particularly affected
by changes in demand for wireless infrastructure and wireless connectivity. Such
demand is affected by numerous factors, including consumer demand for wireless
connectivity; availability or capacity of wireless infrastructure or associated
land interests; location of wireless infrastructure; financial
condition
of customers, including their profitability and availability or cost of capital;
availability and cost of spectrum for commercial use; increased use of network
sharing, roaming, joint development, or resale agreements by customers; mergers
or consolidations by and among customers; governmental regulations, including
local or state restrictions on the proliferation of wireless infrastructure;
cost of constructing wireless infrastructure; and technological changes,
including those affecting the number or type of wireless infrastructure needed
to provide wireless connectivity to a given geographic area or resulting in the
obsolescence or decommissioning of certain existing wireless
networks.
◦Risks
of Investing in the Healthcare Real Estate Sector (RXRE only).
Companies in the Healthcare Real Estate sector may be affected by unique supply
and demand factors that do not apply to other real estate sectors. Such
companies may be subject to risks related to severe cold and flu seasons,
epidemics, or any other widespread illnesses that could affect the occupancy of
healthcare properties, including seniors housing. Additionally, healthcare
companies may be significantly dependent on one or a small number of long-term
management agreements for seniors housing communities, which may subject such
companies to the risks affecting such management companies. Legislation to
address federal government operations and administration decisions affecting the
Centers for Medicare and Medicaid Services could significantly affect healthcare
real estate companies and their tenants, operators, and borrowers by reducing
their liquidity, impairing their financial condition, or negatively affecting
the results of their operations. Healthcare properties may also face high levels
of regulation and the need to obtain governmental approvals or
permits.
◦Risks
of Investing in the Hotel & Lodging Real Estate Sector (ROOM
only).
Companies in the Hotel & Lodging Real Estate sector may be affected by
unique supply and demand factors that do not apply to other real estate sectors.
Weak economic conditions in some parts of the world, the strength or
continuation of recovery in countries that have experienced improved economic
conditions, changes in oil prices and currency values, potential disruptions in
the U.S. economy that might result from the new U.S. administration’s policies
in such areas as trade, immigration, healthcare, and related issues, political
instability in some areas, and the uncertainty over how long any of these
conditions will continue, could continue to have a negative impact on the
lodging industry. U.S. government travel is also a significant part of the
lodging industry, and this aspect of the industry may continue to suffer due to
U.S. federal spending cuts or government hiring freezes and any further
limitations that may result from presidential or congressional action or
inaction. As a result of such current economic conditions and uncertainty, the
lodging industry may continue to experience weakened demand for occupancy in
some markets.
Man-made
disasters in recent years as well as the potential spread of contagious diseases
such as MERS (Middle East Respiratory Syndrome), Zika virus, and Ebola in
locations lodging companies own, manage, or franchise significant properties and
areas of the world from which they draw a large number of customers, could cause
a decline in business or leisure travel and reduce demand for lodging. Actual or
threatened war, terrorist activity, political unrest, or civil strife, such as
recent events in Fort Lauderdale, Orlando, Charlotte, Berlin, Brussels, Paris,
Turkey, Ukraine and Russia, the Middle East, and other geopolitical uncertainty
could have a similar effect. Any one or more of these events may reduce the
overall demand for hotel rooms and corporate apartments or limit the prices that
can be obtained for them, both of which could adversely affect company
profits.
◦Risks
of Investing in the Industrial Real Estate Sector (INDS only).
Companies in the Industrial Real Estate sector may be affected by unique supply
and demand factors that do not apply to other real estate sectors. For example,
industrial real estate may be more susceptible to changes in interest rates,
macroeconomic trends, government regulation, and tax regulation than other real
estate sectors. Industrial real estate may also be concentrated in
logistics-related industries, which could expose industrial real estate
companies to the risks of a downturn affecting logistics companies.
REIT
Investment Risk
Investments
in REITs involve unique risks. REITs may have limited financial resources, may
trade less frequently and in limited volume, and may be more volatile than other
securities. In addition, to the extent the Fund holds interests in REITs, it is
expected that investors in the Fund will bear two layers of asset-based
management fees and expenses (directly at the Fund level and indirectly at the
REIT level). The risks of investing in REITs include certain risks associated
with the direct ownership of real estate and the real estate industry in
general. These include risks related to general, regional and local economic
conditions; fluctuations in interest rates and property tax rates; shifts in
zoning laws, environmental regulations and other governmental action such as the
exercise of eminent domain; cash flow dependency;
increased
operating expenses; lack of availability of mortgage funds; losses due to
natural disasters; overbuilding; losses due to casualty or condemnation; changes
in property values and rental rates; and other factors.
In
addition to these risks, REITs are dependent upon management skills and
generally may not be diversified. REITs are also subject to heavy cash flow
dependency, defaults by borrowers and self-liquidation. In addition, REITs could
possibly fail to qualify for the beneficial tax treatment available to REITs
under the Internal Revenue Code of 1986, or to maintain their exemptions from
registration under the 1940 Act. The Fund expects that dividends received from a
REIT and distributed to Fund shareholders generally will be taxable to the
shareholder as ordinary income, but may be taxable as return of capital. In the
event of a default by a borrower or lessee, the REIT may experience delays in
enforcing its rights as a mortgagee or lessor and may incur substantial costs
associated with protecting investments.
Risk
of Investing in China
The
Chinese government maintains a major role in economic policymaking. Investing in
China involves risk of loss due to expropriation, nationalization, or
confiscation of assets and property or the imposition of restrictions on foreign
investments and on repatriation of capital invested. The Chinese economy is
subject to a considerable degree of government regulation and intervention,
political and social risk and other risk factors, as described in more detail
below:
◦Political
and Social Risk.
The Chinese government is authoritarian, and has periodically used force to
suppress civil dissent. Disparities of wealth and the pace of economic
liberalization may lead to social turmoil, violence and labor unrest. In
addition, China continues to experience disagreements related to integration
with Hong Kong and religious and nationalist disputes in Tibet and elsewhere.
There is also a greater risk involved in currency fluctuations, currency
convertibility, interest rate fluctuations and higher rates of inflation as a
result of internal social unrest and conflicts with other countries.
Unanticipated political or social developments may result in sudden and
significant investment losses. China’s growing income inequality and worsening
environmental conditions are also factors that may affect the Chinese
economy.
◦Government
Control and Regulation.
The Chinese government has implemented significant economic reforms in order to
liberalize trade policy, promote foreign investment in the economy, reduce
government control of the economy and develop market mechanisms. There can be no
assurance these reforms will continue or that they will be effective. Despite
recent reform and privatizations, significant regulation of investment and
industry is still pervasive, and the Chinese government may restrict foreign
ownership of Chinese corporations and repatriation of assets without warning.
Chinese markets generally continue to experience inefficiency, volatility and
pricing anomalies that may be connected to governmental influence, a lack of
publicly-available information, and political and social
instability.
◦Economic
Risk.
The Chinese economy has grown rapidly during the past several years, and there
is no assurance that this growth rate will be maintained or that the economy
will not experience recession. In fact, the Chinese economy may experience a
significant slowdown as a result of, among other things, deterioration in global
demand for Chinese exports, as well as contraction in spending on domestic goods
by the Chinese consumer. In addition, China may experience substantial rates of
inflation or economic recessions, causing a negative effect on the economy and
securities market. Slow development of well-functioning financial markets and
widespread corruption have also hindered performance of the Chinese economy.
China continues to receive substantial pressure from trading partners to
liberalize official currency exchange rates and better protect intellectual
property rights.
◦Geographic
Risk.
China historically has experienced natural disasters such as earthquakes,
droughts and floods, and is economically sensitive to environmental events. Any
such event could cause a significant impact on the Chinese economy.
◦Hong
Kong Political Risk.
Hong Kong reverted to Chinese sovereignty on July 1, 1997 as a Special
Administrative Region (“SAR”) of the PRC under the principle of “one country,
two systems.” Although China has expressed its commitment to maintain the
current capitalist economic and social system of Hong Kong through June 30,
2047, the continuation of economic and social freedoms enjoyed in Hong Kong is
dependent on the government of China. Any attempt by China to tighten its
control over Hong Kong’s political, economic, legal or social policies may
result in an adverse effect on Hong Kong’s markets. In addition, the Hong Kong
dollar trades at a fixed exchange rate in relation to (i.e.,
is “pegged” to) the U.S. dollar, which has contributed to the growth and
stability of the Hong Kong economy. However, it is uncertain how long the
currency peg will
continue,
or what effect the establishment of an alternative exchange rate system would
have on the Hong Kong economy.
◦Available
Disclosure About Chinese Companies.
Disclosure and regulatory standards in China are in many respects less stringent
than U.S. standards. Chinese issuers are required to follow PRC accounting
standards and practices, which follow international accounting standards to a
certain extent. However, the accounting, auditing and financial reporting
standards and practices applicable to PRC companies may be less rigorous, and
there may be significant differences between financial statements prepared in
accordance with the PRC accounting standards and practices and those prepared in
accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). In
particular, the assets and profits appearing on the financial statements of a
Chinese issuer may not reflect its financial position or results of operations
in the way they would be reflected had such financial statements been prepared
in accordance with GAAP. As the disclosure and regulatory standards in the PRC
are less stringent than in more developed markets, there might be substantially
less publicly available information about issuers in the PRC on which CSOP Asset
Management can base investment decisions, and such information may not be as
reliable as information prepared in accordance with GAAP.
Additionally,
there is substantially less publicly available information about Chinese issuers
than there is about U.S. issuers. Therefore, disclosure of certain material
information may not be made, and less information may be available to the Fund
and other investors than would be the case if the Fund’s investments were
restricted to securities of U.S. issuers.
◦Chinese
Securities Markets.
Currently, there are two stock exchanges in mainland China, the Shanghai Stock
Exchange and the Shenzhen Stock Exchange. The Shanghai and Shenzhen Stock
Exchanges are substantially smaller, less liquid, and more volatile than the
major securities markets in the United States. Investors should note that the
Shanghai and Shenzhen Stock Exchanges on which China A-Shares are traded are
undergoing development and the market capitalization of, and trading volumes on,
those exchanges may be lower than those in more developed financial markets.
Market volatility and settlement difficulties in the China A Shares markets may
result in significant fluctuation in the prices of the securities traded on such
markets and thereby changes in the Net Asset Value of the Fund. The China A
Shares markets are considered volatile and unstable (with the risk of suspension
of a particular stock or government intervention).
The
securities markets in the PRC, including the A-Share markets, are less developed
than other markets, and may be characterized by higher liquidity and settlement
risk than markets in more developed countries. This may result in higher
transaction costs and price volatility. There is less regulation and monitoring
of Chinese securities markets, and the activities of investors, brokers and
other participants, than in the United States. Accordingly, issuers of
securities in China are not subject to the same degree of regulation as are U.S.
issuers with respect to such matters as tender offer regulation, stockholder
proxy requirements, insider trading rules and the requirements mandating timely
disclosure of information. The PRC’s regulatory authorities have only recently
been given the power and duty to prohibit fraudulent and unfair market practices
relating to securities markets, such as insider trading and market abuse, and to
regulate substantial acquisitions of shares and takeovers of companies. All of
these factors may adversely affect the liquidity of the Fund’s investments and
lead to a higher level of volatility and instability associated with the PRC
securities markets relative to more developed markets.
The
Chinese government may intervene in the A-Shares market and halt or suspend
trading of A-Share securities for short or even extended periods of time.
Recently, the A-Shares market has experienced considerable volatility and been
subject to frequent and extensive trading halts and suspensions. These trading
halts and suspensions have, among other things, contributed to uncertainty in
the markets and reduced the liquidity of the securities subject to such trading
halts and suspensions, including a number of securities held by the Fund. If the
trading in a significant number of the Fund’s A-Share holdings is halted or
suspended, the Fund’s portfolio could become illiquid. In such event, the Fund
may have difficulty selling its portfolio positions until the trading halt or
suspension is lifted, or may not be able to sell such securities at all. As a
result, the Fund may need to sell other more liquid portfolio holdings at a loss
or at times when it otherwise would not do so in order to generate sufficient
cash to satisfy redemption requests. This could have a negative impact on the
Fund’s performance and increase the Fund’s tracking error. If a significant
number of securities held by the Fund are suspended or unavailable for sale, the
Fund is permitted to delay settlement of redemption requests up to seven days,
as further discussed in the Fund’s Statement of Additional Information (“SAI”).
Trading halts or suspensions may make it difficult for the Fund to obtain prices
for such securities and may require the Fund to “fair value” a portion of its
portfolio
holdings (as described below in “Additional Information on Buying and Selling
Fund Shares”). In such case, the determined fair value for an investment may be
different than the value realized upon the disposition of such investment.
Furthermore, trading halts or suspensions of the Fund’s portfolio securities may
also have a negative impact on the trading price of Fund shares and increase the
volatility of such trading prices.
◦Chinese
Corporate and Securities Law.
China operates under a civil law system, in which court precedent is not
binding. Because there is no binding precedent to interpret existing statutes,
there is uncertainty regarding the implementation of existing law. China also
lacks a national set of laws which address all issues that may arise with regard
to a foreign investor such as the Fund. It may therefore be difficult, or
impossible, for the Fund to enforce its rights as an investor under Chinese
corporate and securities laws, and it may be difficult or impossible for the
Fund to obtain or enforce a judgment in court. Moreover, as Chinese corporate
and securities laws continue to develop; these developments may adversely affect
foreign investors such as the Fund.
Additionally,
legal principles relating to corporate affairs and the validity of corporate
procedures, directors’ fiduciary duties and liabilities, and stockholders’
rights often differ from those that may apply in the United States and other
countries. Chinese laws providing protection to investors, such as laws
regarding the fiduciary duties of officers and directors, are undeveloped and
will not provide investors such as the Fund with protection in all situations
where protection would be provided by comparable laws in the United
States.
◦Investments
in A-Shares.
If the trading in a significant number of the Fund’s A-Share holdings is halted
or suspended, the Fund’s portfolio could become illiquid. In such event, the
Fund may have difficulty selling its portfolio positions until the trading halt
or suspension is lifted, or may not be able to sell such securities at all. As a
result, the Fund may need to sell other more liquid portfolio holdings at a loss
or at times when it otherwise would not do so to generate sufficient cash to
satisfy redemption requests. This could have a negative impact on the Fund’s
performance and increase the Fund’s tracking error. If a significant number of
securities held by the Fund are suspended or unavailable for sale, the Fund is
permitted to delay settlement of redemption requests up to seven days, as
further discussed in the Fund’s Statement of Additional Information (“SAI”).
Trading halts or suspensions may make it difficult for the Fund to obtain prices
for such securities and may require the Fund to “fair value” a portion of its
portfolio holdings (as described below in “Pricing of Fund Shares”). In such
case, the determined fair value for an investment may be different than the
value realized upon the disposition of such investment. Furthermore, trading
halts or suspensions of the Fund’s portfolio securities may also have a negative
impact on the trading price of Fund shares and increase the volatility of such
trading prices.
◦Investing
Through the Shanghai-Hong Kong Stock Connect Program Risk.
The Shanghai-Hong Kong Stock Connect program is a newly-established securities
trading and clearing program that enables mutual stock market access between
mainland China and Hong Kong. Through the Shanghai-Hong Kong Stock Connect
program, foreign investors such as the Fund can trade eligible China A-Shares,
subject to trading limits and rules and regulations as may be issued from time
to time. Unlike other programs for foreign investment in Chinese securities, no
individual investment quotas or licensing requirements apply to investors
investing via the Shanghai-Hong Kong Stock Connect program. In addition, there
are no lock-up periods or restrictions on the repatriation of principal and
profits. Among other restrictions, investors in securities obtained via the
Shanghai-Hong Kong Stock Connect program are generally subject to Chinese
securities regulations and Shanghai Stock Exchange rules. Securities obtained
via the Shanghai-Hong Kong Stock Connect program generally may only be sold,
purchased or otherwise transferred through the Shanghai-Hong Kong Stock Connect
program in accordance with applicable rules. Although the Fund is not subject to
individual investment quotas, daily investment quotas designed to limit the
maximum daily net purchases on any particular day apply to all participants in
the Shanghai-Hong Kong Stock Connect program, which may restrict or preclude the
ability of the Fund to invest in securities obtained via the program.
Additionally, investments made through the Shanghai-Hong Kong Stock Connect
program are subject to trading, clearance and settlement procedures that are
relatively untested in China, which could pose risks to the Fund. The
Shanghai-Hong Kong Stock Connect program is newly-established and further
developments are likely. It is unclear whether or how such developments may
restrict or affect the Fund.
Fund
purchases of A-Shares through the Shanghai-Hong Kong Stock Connect program
involve ownership rights that are less developed than those involved in U.S.
securities markets. When the Fund buys a Shanghai Stock Exchange-listed stock
through the Shanghai-Hong Kong Stock Connect program, the Fund is purchasing a
right against the Hong Kong Securities Clearing Company Limited to obtain the
benefits of ownership of the Shanghai Stock Exchange-listed stock, and not the
stock itself. The buying Fund does not have legal title to the Shanghai
Stock
Exchange-listed stock and has no separate rights to obtain the benefits of
ownership, because PRC law does not recognize the buyer’s beneficial ownership.
Therefore, the risk of loss is greater due to the indirect nature of the
ownership interest in the A-Shares when trading through the Shanghai-Hong Kong
Stock Connect program.
◦Sanctions
and Embargoes.
Certain of the companies in which the Fund expects to invest may occasionally
operate in, or have dealings with, countries subject to sanctions or embargoes
imposed by the U.S. Government and the United Nations, and/or countries
identified by the U.S. Government as state sponsors of terrorism. A company may
suffer damage to its reputation if it is identified as a company which operates
in, or has dealings with, countries subject to sanctions or embargoes imposed by
the U.S. Government and the United Nations, and/or countries identified by the
U.S. Government as state sponsors of terrorism. As investors in such companies,
the Fund will be indirectly subject to those risks.
◦Investment
and Repatriation Restrictions.
Investments by the Fund in A-Shares through Chinese financial instruments
regulated by the CSRC, including warrants and open- and closed-end investment
companies, are subject to governmental pre-approval limitations on the quantity
that the Fund may purchase, or limits on the classes of securities in which the
Fund may invest. In addition, A-Shares traded through the Shanghai-Hong Kong
Stock Connect program are subject to daily trading limits and other
restrictions. Any additional restrictions imposed on CSOP Asset Management may
have an adverse effect on the Fund’s ability to invest directly in A-Shares and
its ability to meet redemption requests, and may also have an adverse impact on
the ability of the Fund to track the Index and the performance of the
Fund.
The
Chinese government limits foreign investment in the securities of certain
Chinese issuers entirely, if foreign investment is banned in respect of the
industry in which the relevant Chinese issuers are conducting their business.
These restrictions or limitations may have adverse effects on the liquidity and
performance of the Fund’s holdings as compared to the performance of its Index.
This may increase the risk of tracking error, and may adversely affect the
Fund’s ability to achieve its investment objective.
◦Disclosure
of Interests and Short Swing Profit Rule.
The Fund may be subject to regulations promulgated by the CSRC which currently
require the Fund to make certain public disclosures, when the Fund and parties
acting in concert with the Fund acquire 5% or more of the issued securities of a
listed company (which include A-Shares of the listed company). The relevant PRC
regulations presumptively treat all affiliated investors and investors under
common control as parties acting in concert. As such, the Fund may be deemed as
a “concerted party” of other funds managed by the Adviser or Sub-Adviser, and
therefore may be subject to the risk that the Fund’s holdings may be required to
be reported in the aggregate with the holdings of such other funds, should the
aggregate holdings trigger the reporting threshold under the PRC law. If the 5%
shareholding threshold is triggered, the Fund would be required to file its
report within three days. During the time limit for filing the report, a trading
freeze applies, and the Fund would not be permitted to make subsequent trades in
the invested company’s securities. Any such trading freeze may impair the
ability of the Fund to track its Index, and may have a negative impact on the
Fund’s performance.
Further,
subject to the interpretation of PRC courts and PRC regulators, the operation of
the short swing profit rule may prevent the Fund from reducing its holdings in a
company, 5% or more of whose shares are deemed to be held by the Fund and its
affiliates, within six months of the last purchase of shares of the company. The
Fund could be subject to these restrictions; even though an entity deemed to be
an affiliate (and not the Fund) may have triggered the restrictions.
Nonetheless, if the Fund violates the rule, it may be required by the listed
company to return any profits realized from such trading to the company. In
addition, the Fund could not repurchase securities of the listed company within
six months of such sale. Finally, under PRC civil procedures, the Fund’s assets
may be frozen to the extent of the claims made by the company in
question.
◦Custody
Risk.
Less developed markets such as China are more likely to experience problems with
the clearing and settling of trades and the holding of securities by local
banks, agents and depositories. Local agents are held only to the standards of
care of their local markets, and in general, the less developed a country’s
securities market is, the greater the likelihood of custody and settlement
problems.
Applicable
PRC regulations require the Adviser (as RQFII) to select a custodian in the PRC
(“PRC Custodian”). The PRC Custodian maintains the Fund’s investments in
A-Shares in the PRC to ensure compliance with the rules and regulations of the
CSRC, the SAFE and the People’s Bank of China. A-Shares that are traded on the
Shanghai or Shenzhen Stock Exchange are dealt and held in book-entry form
through the China Securities Depository and
Clearing
Corporation Limited (“CSDCC”). A-Shares purchased by the Adviser, in its
capacity as an RQFII, may be received by the CSDCC as credited to a securities
trading account maintained by the PRC Custodian in the joint names of the Fund
and the Adviser. All non-A-Share securities may also be credited to a securities
trading account maintained in the joint names of a Fund and the Adviser. The PRC
Custodian fees are paid by a Fund. The Adviser may not use the account for any
purpose other than maintaining a Fund’s assets. However, given that the
securities trading account will be maintained in the joint names of the Adviser
and the Fund, the Fund’s assets may not be as well-protected as they would be if
it were possible for them to be registered and held solely in the name of the
Fund. In particular, there is a risk that creditors of the Adviser may assert
that the securities are owned by the Adviser and not the Fund, and that a court
would uphold such an assertion. If this were to occur, creditors of the Adviser
could seize assets of the Fund. Because the Adviser’s A-Share quota is in the
name of the Adviser and the Fund, there is also a risk that regulatory actions
taken against the Adviser may affect the Fund.
Investors
should note that cash deposited in the Fund’s cash account with the PRC
Custodian is not segregated from the proprietary assets of the PRC Custodian or
the assets of the PRC Custodian’s other clients. To the extent the Fund’s assets
are commingled, they will be vulnerable in the event of a bankruptcy or
liquidation of the PRC Custodian. In such case, the Fund will not have any
proprietary rights to the cash deposited in the account, and the Fund will
become an unsecured creditor of the PRC Custodian. The Fund may face difficulty
and/or encounter delays in recovering such debt, or may not be able to recover
it in full or at all, in which case the Fund will suffer losses.
◦Use
of Brokers. CSRC
and SAFE regulations specify that all securities traded by the CSOP Asset
Management, as a licensed RQFII, on behalf of the Fund must be executed through
one of the two PRC exchanges — the Shanghai Stock Exchange or the Shenzhen Stock
Exchange. CSOP Asset Management may select the same broker for both exchanges.
While CSOP Asset Management has additional flexibility to select brokers when
using the Shanghai-Hong Kong Stock Connect program, CSOP Asset Management may
nevertheless have less flexibility to choose among brokers on behalf of the Fund
than is typically the case for U.S. investment managers. This may cause the Fund
to incur higher brokerage expenses and achieve less favorable execution, which
could have a negative impact on Fund returns. In addition, in the event of any
default of a PRC broker in the execution or settlement of any transaction or in
the transfer of any funds or securities in the PRC, the Fund may encounter
delays in recovering its assets, or may not be able to recover its assets, which
could cause the Fund to lose money. Further, the operation of the Fund may be
adversely affected in case of any acts or omissions of a PRC broker, which may
result in, among other things, losses to the Fund and higher tracking error.
There is also a risk that the Fund may suffer losses from the default,
bankruptcy or disqualification of a PRC broker. However, CSOP Asset Management,
in its selection of PRC brokers, will consider such factors as the
competitiveness of PRC brokers’ commission rates, size of the relevant orders,
and execution standards.
◦Loss
of Favorable U.S. Tax Treatment Risk.
The Fund intends to distribute annually all or substantially all of their
investment company taxable income and net capital gain, if any. However, if,
among other things, the Fund uses an RQFII license and does not receive the
required regulatory approval to repatriate funds associated with direct
investment in A-Shares on a timely basis, it may be unable to satisfy the
distribution requirements required to qualify for the favorable tax treatment
otherwise generally afforded to Regulated Investment Companies (“RICs”) under
the Internal Revenue Code of 1986, as amended. If the Fund fails to qualify for
any taxable year as a RIC, the Fund would be treated as a regular corporation
subject to U.S. federal income tax, thereby subjecting any income earned by the
Fund to tax at the corporate level (currently at a 21% U.S. federal tax rate),
and when such income is distributed, to a further tax at the stockholder level,
to the extent of the Fund’s current or accumulated earnings and profits. In
addition, the Fund would not be eligible for a deduction for dividends paid to
shareholders. Also, Fund shareholders would be taxed as if they received
ordinary dividends, although corporate shareholders could be eligible for the
dividends received deduction (subject to certain limitations), and individuals
may be able to benefit from the lower tax rates available to qualified dividend
income. Furthermore, the Fund could be required to recognize unrealized gains,
pay substantial taxes and interest, and make substantial distributions before
requalifying as a RIC.
To
the extent the Fund does not distribute to shareholders all of its investment
company taxable income and net capital gain in a given year, it will be required
to pay U.S. federal income tax on the retained income and gains, thereby
reducing the Fund’s return. The Fund may elect to treat its net capital gain as
having been distributed to shareholders. In that case, shareholders of record on
the last day of the Fund’s taxable year will be required to
include
their attributable share of the retained gain in income for the year as a
long-term capital gain, despite not actually receiving the dividend, and will be
entitled to a tax credit or refund for the tax deemed paid on their behalf by
the Fund, as well as an increase in the basis of their shares to reflect the
difference between their attributable share of the gain and the related credit
or refund.
◦Currency
Exchange Risks.
The existing PRC foreign exchange regulations have significantly reduced
government foreign exchange controls for certain transactions, including trade-
and service-related foreign exchange transactions and payment of dividends.
However, it is impossible to predict whether the PRC will continue its existing
foreign exchange policy and whether the PRC will allow free conversion of the
RMB to foreign currency. Certain foreign exchange transactions continue to be
subject to significant foreign exchange controls and require the approval of the
SAFE. Since 1994, the conversion of RMB into U.S. dollars has been based on
rates set by the People’s Bank of China, which are set daily based on the
previous day’s PRC interbank foreign exchange market rate. It is not possible to
either predict or give any assurance of any future stability of the RMB to the
U.S. dollar exchange rate. Fluctuations in exchange rates may adversely affect
the Fund’s performance. Furthermore, because dividends are declared in U.S.
dollars and the securities held by the Fund are generally denominated in RMB,
fluctuations in exchange rates may have a negative impact on the level of
dividends paid by the Fund.
Although
the Fund uses various strategies to attempt to minimize the impact of changes in
the value of RMB against the U.S. dollar, these strategies may not be
successful. In order to minimize transaction costs, or for other reasons, the
Fund’s exposure to RMB may not be fully hedged at all times. Currency exchange
rates can be very volatile and can change quickly and unpredictably. Therefore,
the value of an investment in the Fund may also go up or down quickly and
unpredictably and investors may lose money.
Risk
of Investing in Issuers listed on the ChiNext Board
◦Intrinsic
Value Risk.
Currently, stocks listed on ChiNext are generally considered overvalued. The
ChiNext market has a price-earnings ratio of 25.82 (compared to the
price-earnings ratio of 28.20 in the main board of the Shenzhen Stock Exchange
(“SZSE”) and 28.57in the SME board of SZSE) as of June 30, 2024. Such high
valuation may not be sustainable.
◦Risk
Relating to the Differences in Regulations.
The rules and regulations in relation to the issuance and listing of the
securities in the ChiNext market are less stringent in terms of profitability
and share capital than those in the main board market and SME Board market of
SZSE. For example, a company seeking listing on the main board or the SME Board
market of SZSE must have been profitable in the last three consecutive years
with net profits no less than RMB 30 million in aggregate whereas for a company
seeking listing on the ChiNext market, it is only required to be profitable in
the most recent two consecutive years, with accumulated profits no less than RMB
10 million; or the issuer must have been profitable in the most recent year with
revenues of no less than RMB 50 million. Companies listed on the ChiNext market
thus have a shorter track record of profitability than companies listed on the
main board and SME Board of SZSE. At present, major index compilers such as
MSCI, FTSE and HSI exclude ChiNext stocks from their index universe of A-Share
indices. Given the emerging nature of companies listed on the ChiNext market,
there is a risk that the securities traded on the ChiNext market may be
susceptible to increased market volatility compared to securities traded on the
main board market and SME Board market of SZSE.
◦Delisting
Risk of ChiNext-Listed Issuers.
On April 20, 2012, the SZSE introduced new delisting rules governing
ChiNext-listed companies which went into effect on May 1, 2012. Under the new
rules, companies will be delisted from the ChiNext market if (i) their stock
trades below their original offering price for 20 consecutive days, (ii) if they
receive three warnings from the SZSE within the most recent three years, or
(iii) if, after correcting any material errors or false representations, the
adjusted net asset value is negative for the most recent two years. On October
19, 2014, the SZSE further updated the delisting rules governing ChiNext-listed
companies which went into effect on November 16, 2014. Under the updated rules,
a company will be delisted from the ChiNext market (i) if it is found guilty by
the court within 12 months after it is subject to administrative penalty by CSRC
due to issuing securities by deception, or after it is handed over to the public
security bureau for investigation due to the suspicion of committing the crime
of issuing securities by deception, or (ii) if it is found guilty by the court
with 12 months after it is subject to administrative penalty by CSRC due to
violation of major information disclosure regulations, or after it is handed
over to the public security bureau for investigation due to the suspicion of
committing the crime of violating major information disclosure regulations. For
reasons discussed herein, the companies listed on the ChiNext market are
generally less resistant to market risks and may
experience
more fluctuations in their performance. Hence, in more extreme circumstances,
they are more susceptible to falling within one of the above scenarios for
delisting and consequently being delisted by the SZSE.
◦Operational
Risk.
Listed companies in the ChiNext market are usually in their early stages of
development with limited operating scale and operating histories, less mature
business models and weaker risk management capacity, and their businesses are
usually subject to higher uncertainty and more fluctuations in their
performance. Therefore, their stability and resistance to market risks may be
lower. Such instability and uncertainty may have an adverse effect on the Fund’s
investment in such issuers.
◦Risk
Associated with the Fluctuation in Stock Prices.
ChiNext-listed issuers are vulnerable to increased market volatility, which may
adversely affect their performance. In extreme circumstances where the trading
price of the stock has hit the trading band limit, trading of the stock will be
suspended. A suspension will render it impossible for the Fund to liquidate
positions and will therefore expose the Fund to significant losses. Further,
when the suspension is subsequently lifted, it may not be possible for the Fund
to liquidate positions at a favorable price. Conventional valuation methods may
not be entirely applicable to companies listed on the ChiNext market due to the
risky nature of the industries in which these companies operate. There are fewer
circulating shares on the ChiNext market, hence stock prices may be more easily
manipulated and experience higher fluctuations upon market
speculation.
◦Risk
Associated with the Technical Failures.
The companies listed on the ChiNext market generally are engaged in activities
in the scientific development, innovation and media industries. As a result,
ChiNext-listed issuers are subject to the risks of operating in rapidly
developing industries, and may be adversely affected by failures in the
scientific development process in which they are engaged and/or a major adverse
event affecting the industries or their development. Such events also may
adversely affect the Fund’s investment in such issuers and may result in losses
to the Fund.
Sector
Risk
To
the extent the Fund invests more heavily in particular sectors of the economy,
its performance will be especially sensitive to developments that significantly
affect those sectors.
◦Communications Services
Sector Risk. The
Fund is generally expected to invest significantly in companies in the
communications services sector, and therefore the performance of the Fund could
be negatively impacted by events affecting this sector. Communications services
companies are subject to extensive government regulation. The costs of complying
with governmental regulations, delays or failure to receive required regulatory
approvals, or the enactment of new adverse regulatory requirements may adversely
affect the business of the such companies. Companies in the communications
services sector can also be significantly affected by intense competition,
including competition with alternative technologies such as wireless
communications (including with 5G and other technologies), product
compatibility, consumer preferences, rapid product obsolescence, and research
and development of new products. Technological innovations may make the products
and services of such companies obsolete.
◦Consumer
Discretionary Sector Risk.
The Fund may invest in companies in the consumer discretionary sector, and
therefore the performance of the Fund could be negatively impacted by events
affecting this sector. The success of consumer product manufacturers and
retailers is tied closely to the performance of domestic and international
economies, interest rates, exchange rates, competition, consumer confidence,
changes in demographics and consumer preferences. Companies in the consumer
discretionary sector depend heavily on disposable household income and consumer
spending, and may be strongly affected by social trends and marketing campaigns.
These companies may be subject to severe competition, which may have an adverse
impact on their profitability.
◦Consumer
Staples Sector Risk.
The Fund may invest in companies in the consumer staples sector, and therefore
the performance of the Fund could be negatively impacted affected by the events
affecting this sector. The permissibility of using various food additives and
production methods, fads, marketing campaigns and other factors affecting
consumer demand is tied closely to the performance of companies in this sector.
In particular, tobacco companies may be adversely affected by new laws,
regulations and litigation. The consumer staples sector may also be adversely
affected by changes or trends in commodity prices, which may be influenced or
characterized by unpredictable factors.
◦Energy
Sector Risk.
The Fund may invest in companies in the energy sector, and therefore the
performance of the fund could be negatively impacted by events affecting this
sector. The profitability of companies in the energy sector is related to
worldwide energy prices, exploration, and production spending. Such companies
also are subject to risks of changes in exchange rates, government regulation,
world events, depletion of resources and economic conditions, as well as market,
economic and political risks of the countries where energy companies are located
or do business. Oil and gas exploration and production can be significantly
affected by natural disasters. Oil exploration and production companies may be
adversely affected by changes in exchange rates, interest rates, government
regulation, world events, and economic conditions. Oil exploration and
production companies may be at risk for environmental damage
claims.
The
energy sector is comprised of energy, energy industrial, energy infrastructure
and energy logistics companies, and will therefore be susceptible to adverse
economic, environmental, business, regulatory or other occurrences affecting
that sector. The energy sector has historically experienced substantial price
volatility. At times, the performance of these investments may lag the
performance of other sectors or the market as a whole. Master Limited
Partnerships (MLPs) and other companies operating in the energy sector are
subject to specific risks, including, among others, fluctuations in commodity
prices; reduced consumer demand for commodities such as oil, natural gas or
petroleum products; reduced availability of natural gas or other commodities for
transporting, processing, storing or delivering; slowdowns in new construction;
extreme weather or other natural disasters; and threats of attack by terrorists
on energy assets. Additionally, energy sector companies are subject to
substantial government regulation and changes in the regulatory environment for
energy companies may adversely impact their profitability. MLPs may incur
environmental costs and liabilities due to the nature of their businesses and
the substances they handle. Changes in existing laws, regulations or enforcement
policies governing the energy sector could significantly increase the compliance
costs of MLPs. Certain MLPs could, from time to time, be held responsible for
implementing remediation measures, the cost of which may not be recoverable from
insurance. Over time, depletion of natural gas reserves and other energy
reserves may also affect the profitability of energy companies.
◦Financial
Sector Risk. The
Fund may invest in companies in the financial sector, and therefore the
performance of the Fund could be negatively impacted by events affecting this
sector. Companies in the financial sector of an economy are often subject to
extensive governmental regulation and intervention, which may adversely affect
the scope of their activities, the prices they can charge and the amount of
capital they must maintain. Governmental regulation may change frequently and
may have significant adverse consequences for companies in the financial sector,
including effects not intended by such regulation. The impact of recent or
future regulation in various countries on any individual financial company or on
the sector as a whole cannot be predicted.
Certain
risks may impact the value of investments in the financial sector more severely
than those of investments outside this sector, including the risks associated
with companies that operate with substantial financial leverage. Companies in
the financial sector may also be adversely affected by increases in interest
rates and loan losses, decreases in the availability of money or asset
valuations, credit rating downgrades and adverse conditions in other related
markets.
Insurance
companies, in particular, may be subject to severe price competition and/or rate
regulation, which may have an adverse impact on their profitability. Insurance
companies are subject to extensive government regulation in some countries and
can be significantly affected by changes in interest rates, general economic
conditions, price and marketing competition, the imposition of premium rate
caps, or other changes in government regulation or tax law. Different segments
of the insurance industry can be significantly affected by mortality and
morbidity rates, environmental clean-up costs and catastrophic events such as
earthquakes, hurricanes and terrorist acts.
During
the financial crisis that began in 2007, the deterioration of the credit markets
impacted a broad range of mortgage, asset-backed, auction rate, sovereign debt
and other markets, including U.S. and non-U.S. credit and interbank money
markets, thereby affecting a wide range of financial institutions and markets. A
number of large financial institutions failed during that time, merged with
stronger institutions or had significant government infusions of capital.
Instability in the financial markets caused certain financial companies to incur
large losses. Some financial companies experienced declines in the valuations of
their assets, took actions to raise capital (such as the issuance of debt or
equity securities), or even ceased operations. Some financial companies borrowed
significant amounts of capital from government sources and may face future
government-imposed restrictions on
their
businesses or increased government intervention. Those actions caused the
securities of many financial companies to decline in value.
The
financial sector is also a target for cyber attacks and may experience
technology malfunctions and disruptions. In recent years, cyber attacks and
technology failures have become increasingly frequent and have caused
significant losses.
◦Health
Care Sector Risk. The
Fund may invest in companies in the health care sector, and therefore the
performance of the Fund could be negatively impacted by events affecting this
sector. Companies in the health care sector are subject to extensive government
regulation and their profitability can be significantly affected by restrictions
on government reimbursement for medical expenses, rising costs of medical
products and services, pricing pressure (including price discounting), limited
product lines and an increased emphasis on the delivery of healthcare through
outpatient services. Companies in the health care sector are heavily dependent
on obtaining and defending patents, which may be time consuming and costly, and
the expiration of patents may also adversely affect the profitability of these
companies. Health care companies are also subject to extensive litigation based
on product liability and similar claims. In addition, their products can become
obsolete due to industry innovation, changes in technologies or other market
developments. Many new products in the health care sector require significant
research and development and may be subject to regulatory approvals, all of
which may be time consuming and costly with no guarantee that any product will
come to market.
◦Industrials
Sector Risk. The
industrials sector can be significantly affected by, among other things,
worldwide economic growth, supply and demand for specific products and services,
rapid technological developments, international political and economic
developments, environmental issues, tariffs and trade barriers, and tax and
governmental regulatory policies. As the demand for, or prices of, industrials
increase, the value of the Fund’s investments generally would be expected to
also increase. Conversely, declines in the demand for, or prices of, industrials
generally would be expected to contribute to declines in the value of such
securities. Such declines may occur quickly and without warning and may
negatively impact the value of the Fund and your investment.
◦Information
Technology Sector Risk. The
Fund may invest in companies in the information technology sector, and therefore
the performance of the Fund could be negatively impacted by events affecting
this sector. Market or economic factors impacting information technology
companies and companies that rely heavily on technological advances could have a
significant effect on the value of the Fund’s investments. The value of stocks
of information technology companies and companies that rely heavily on
technology is particularly vulnerable to rapid changes in technology product
cycles, rapid product obsolescence, government regulation and competition, both
domestically and internationally, including competition from foreign competitors
with lower production costs. Stocks of information technology companies and
companies that rely heavily on technology, especially those of smaller,
less-seasoned companies, tend to be more volatile than the overall market.
Information technology companies are heavily dependent on patent and
intellectual property rights, the loss or impairment of which may adversely
affect profitability. Additionally, companies in the information technology
sector may face dramatic and often unpredictable changes in growth rates and
competition for the services of qualified personnel.
◦Materials
Sector Risk. The
Fund may invest in companies in the materials sector, and therefore the
performance of the Fund could be negatively impacted by events affecting this
sector. Many companies in this sector are significantly affected by the level
and volatility of commodity prices, the exchange value of the dollar, import
controls, and worldwide competition. At times, worldwide production of
industrial materials has exceeded demand as a result of over-building or
economic downturns, leading to poor investment returns or losses. This sector
may also be affected by economic cycles, interest rates, resource availability,
technical progress, labor relations, and government regulations.
◦Real
Estate Sector Risk.
The real estate sector is subject to liquidity risk, market risk and interest
rate risk which are just some of the factors that can influence the gain or loss
that is passed on to the investor. Liquidity and market risk will tend to have a
greater effect on funds that are more growth-oriented, as the sale of
appreciated properties depends upon market demand. Conversely, interest rate
risk impacts the amount of dividend income that is paid by income-oriented
funds.
◦Utilities
Sector Risk. Utility
stock prices tend not to fluctuate, which reduces the potential for capital
gain. Utility stocks are not insured by the Federal Deposit Insurance
Corporation or protected by the government in any way.
A
foreseeable risk to investing in utilities is the rising market of renewable
energy. The downside of the rising energy market is that it may threaten the
futures of traditional utility companies.
Sector
Rotation Risk
In
situations where the Index generally only changes its exposure to certain
sectors semi-annually, the Index, and consequently the Fund, may be
significantly exposed for short or long periods of time to sectors that
underperform the broader equity market and may have no exposure to the strongest
performing sectors of the market. Additionally, because each Index only includes
securities from certain economic sectors, the Fund may underperform or be more
volatile than a fund investing in more or even all sectors of the
economy.
Small-Capitalization
Investing Risk
The
securities of small-capitalization companies may be more vulnerable to adverse
issuer, market, political, public health, cyber or economic developments than
securities of larger-capitalization companies. The securities of
small-capitalization companies generally trade in lower volumes and are subject
to greater and more unpredictable price changes than larger capitalization
stocks or the stock market as a whole. Some small capitalization companies have
limited product lines, markets, and financial and managerial resources and tend
to concentrate on fewer geographical markets relative to larger capitalization
companies. There is typically less publicly available information concerning
smaller-capitalization companies than for larger, more established companies.
Small-capitalization companies also may be particularly sensitive to changes in
interest rates, government regulation, borrowing costs and
earnings.
Style
Risk
When
a Fund has adopted a strategy to invest in dividend-paying stocks the Fund is
subject to the risk that such stocks may fall out of favor with investors and
underperform the market. Companies that issue dividend-paying stocks are not
required to continue to pay dividends on such stocks. Therefore, there is the
possibility that such companies could reduce or eliminate the payment of
dividends in the future or the anticipated acceleration of dividends could not
occur. Depending upon market conditions, dividend-paying stocks that meet the
Fund’s investment criteria may not be widely available and/or may be highly
concentrated in only a few market sectors.
Tax
Risk
To
qualify for the favorable tax treatment generally available to regulated
investment companies, a Fund must satisfy certain diversification requirements.
In particular, a Fund generally may not acquire a security if, as a result of
the acquisition, more than 50% of the value of such Fund’s assets would be
invested in (a) issuers in which such Fund has, in each case, invested more than
5% of its assets or (b) issuers more than 10% of whose outstanding voting
securities are owned by the Fund. While the weighting of the Index is not
inconsistent with these rules, given the concentration of the Index in a
relatively small number of securities, it may not always be possible for a Fund
to fully implement a replication strategy or a representative sampling strategy
while satisfying these diversification requirements. A Fund’s efforts to satisfy
the diversification requirements may affect such Fund’s execution of its
investment strategy and may cause the Fund’s return to deviate from that of the
Index, and a Fund’s efforts to replicate or represent the Index may cause it
inadvertently to fail to satisfy the diversification requirements. If a Fund
were to fail to satisfy the diversification requirements, it could incur penalty
taxes and be forced to dispose of certain assets, or it could fail to qualify as
a regulated investment company. If a Fund were to fail to qualify as a regulated
investment company, it would be taxed in the same manner as an ordinary
corporation, and distributions to its shareholders would not be deductible by
such Fund in computing its taxable income.
Tracking
Risk
The
Fund seeks to track the performance of its underlying index and is subject to
the risk of tracking variance. Tracking variance may result from share purchases
and redemptions, transaction costs, expenses and other factors. Tracking
variance may prevent the Fund from achieving its investment objective.
Additionally, a Fund’s return may not track the return of the Index if the Fund
is not able to replicate the holdings of the Index due to the diversification
requirements described above under “Tax Risk,” which apply to the Fund but not
the Index. The use of sampling techniques may affect the Fund’s ability to
achieve close correlation with its Index. The Fund may use a representative
sampling strategy to achieve its investment objective, if the Adviser believes
it is in the best interest of the Fund, which generally can be expected to
produce a greater non-correlation risk.
Tracking
Error Risk
As
with all index funds, the performance of the Fund and its Index may vary
somewhat for a variety of reasons. For example, the Fund incurs operating
expenses and portfolio transaction costs not incurred by its Index. In addition,
the Fund may not be fully invested in the securities of its Index at all times
or may hold securities not included in its Index. The use of sampling techniques
may affect the Fund’s ability to achieve close correlation with its Index. The
Fund may use a representative sampling strategy to achieve its investment
objective, if the Adviser believes it is in the best interest of the Fund, which
generally can be expected to produce a greater non-correlation
risk.
Trading
Halt Risk
When
a Fund invests in futures contracts it is subject to trading halt risk. The
major exchanges on which these contracts are traded have established limits on
how much the trading price of a futures contract may decline over various time
periods within a day, and may halt trading in a contract that exceeds such
limits. In such circumstances, the Fund may be unable to accurately price its
investments and/or may incur substantial losses.
Trend
Lag Risk
The
Fund is managed to track the performance of an Index that adjusts its holdings
based on market trends. The methodology employed by the Index does not eliminate
exposure to downward trends and/or volatility in the Fund and does not provide
immediate exposure to upward trends and/or volatility in the Fund.
For
example, with respect to PTBD, at least six consecutive trading days will elapse
after the Risk Ratio first drops below its historical 100-day simple moving
average (or conversely, first moves above such average) before the Index will
switch from tracking the iBoxx USD Liquid High Yield Index to the iBoxx USD
Treasuries 7-10 Year Index (or conversely, from the iBoxx USD Treasuries 7-10
Year Index to the iBoxx USD Liquid High Yield Index). As a result, if the iBoxx
USD Liquid High Yield Index is in an overall positive trend, the Index and
consequently the Fund may be adversely affected by a downward trend and/or
volatility in the iBoxx USD Liquid High Yield Index for up to six consecutive
trading days (or conversely, if the iBoxx USD Liquid High Yield Index is in an
overall negative trend, the Index and consequently the Fund may not benefit from
an upward trend and/or volatility in the iBoxx USD Liquid High Yield Index for
up to six consecutive trading days). Accordingly, the methodology employed by
the Index does not eliminate exposure to downward trends and/or volatility in
the iBoxx USD Liquid High Yield Index and does not provide immediate exposure to
upward trends and/or volatility in the iBoxx USD Liquid High Yield
Index.
ADDITIONAL
NON-PRINCIPAL INVESTMENT STRATEGY INFORMATION
Each
Fund, except for FLRT and AFTY, will generally use a “replication” strategy to
achieve its investment objective, meaning it will invest in all of the component
securities of the applicable Index in the same approximate proportion as in such
Index, but may, when the Adviser believes it is in the best interests of such
Fund, use a “representative sampling” strategy, meaning it may invest in a
sample of the securities in the applicable Index whose risk, return, and other
characteristics closely resemble the risk, return, and other characteristics of
the applicable Index as a whole (e.g.,
when replicating the Index involves practical difficulties or substantial costs,
an Index constituent becomes temporarily illiquid, unavailable or less liquid,
or as a result of legal restrictions or limitations that apply to the Fund but
not to the Index).
Each
Fund may invest up to 20% of its assets in cash and cash equivalents, other
investment companies, as well as securities and other instruments not included
in the Index but which the Adviser (or the Fund’s sub-adviser, as applicable)
believes will help the Fund track the applicable Index.
ADDITIONAL
NON-PRINCIPAL RISK INFORMATION
Cash
Equivalents and Short-Term Investments. Normally,
a Fund invests substantially all of its assets to meet its investment objective.
A Fund may invest the remainder of its assets in securities with maturities of
less than one year or cash equivalents, or each may hold cash. The percentage of
a Fund invested in such holdings varies and depends on several factors,
including market conditions. For temporary defensive purposes and during periods
of high cash inflows or outflows, a Fund may depart from its principal
investment strategies and invest part or all of its assets in these securities,
or it may hold cash. During such periods, a Fund may not be able to achieve its
investment objective. A Fund may adopt a temporary defensive strategy when the
portfolio managers believe securities in which the Fund normally invests have
elevated risks due to political or economic factors and in other extraordinary
circumstances. For more information on eligible short-term investments, see the
SAI.
Absence
of a Prior Active Market. Although
the Funds’ Shares are approved for listing on the a national securities
exchange, there can be no assurance that an active trading market will develop
and be maintained for Fund Shares. There can be no assurance that a Fund will
grow to or maintain an economically viable size, in which case such Fund may
experience greater tracking error to its Index than it otherwise would at higher
asset levels or the Fund may ultimately liquidate.
Liquidity
Risk. The
Funds may hold certain investments that may be subject to restrictions on
resale, trade over-the-counter or in limited volume, or lack an active trading
market. Accordingly, the Funds may not be able to sell or close out of such
investments at favorable times or prices (or at all), or at prices approximating
those at which a Fund currently values them. Illiquid securities may trade at a
discount from comparable, more liquid investments and may be subject to wide
fluctuations in market value.
Risk
of Investing in the United States. Certain
changes in the U.S. economy, such as when the U.S. economy weakens or when its
financial markets decline, may have an adverse effect on the securities to which
the Funds have exposure. A decrease in imports or exports, changes in trade
regulations, and/or an economic recession in the United States may have a
material adverse effect on the U.S. economy and the securities listed on U.S.
exchanges. Proposed and adopted policy and legislative changes in the United
States are changing many aspects of financial and other regulation and may have
a significant effect on the U.S. markets generally, as well as on the value of
certain securities. In addition, a continued rise in the U.S. public debt level
or the imposition of U.S. austerity measures may adversely affect U.S. economic
growth and the securities to which the Fund has exposure. The United States has
developed increasingly strained relations with a number of foreign countries. If
relations with certain countries continue to worsen, it could adversely affect
U.S. issuers as well as non-U.S. issuers that rely on the United States for
trade. The United States has also experienced increased internal unrest and
discord. If this trend were to continue, it may have an adverse impact on the
U.S. economy and the issuers in which the Fund invests.
Securities
Lending
Risk.
There
are certain risks associated with securities lending, including the risk that
the borrower may fail to return the securities on a timely basis or even the
loss of rights in the collateral deposited by the borrower, if the borrower
should fail financially. As a result, a Fund may lose money. A Fund could also
lose money in the event of a decline in the value of collateral provided for
loaned securities or a decline in the value of any investments made with cash
collateral. These events could also trigger adverse tax consequences for a
Fund.
PORTFOLIO
HOLDINGS INFORMATION
Information
about each Fund’s daily portfolio holdings is available at www.PacerETFs.com. A
summarized description of each Fund’s policies and procedures with respect to
the disclosure of each Fund’s portfolio holdings is available in each Fund’s
Statement of Additional Information (“SAI”).
MANAGEMENT
The
Funds are series of Pacer Funds Trust (the “Trust”), a Delaware statutory trust,
which is overseen by a board of trustees.
Investment
Adviser
The
Adviser has overall responsibility for the general management and administration
of the Trust and each of its separate investment portfolios. The Adviser is a
registered investment adviser with offices located at 500 Chesterfield Parkway,
Malvern, Pennsylvania 19355. The Adviser has managed ETFs since 2015. The
Adviser also arranges for sub-advisory (as applicable), transfer agency,
custody, fund administration, securities lending and all other related services
necessary for each Fund to operate. For its services, the Adviser receives a fee
from each Fund, calculated daily and paid monthly, based on a percentage of each
Fund’s average daily net assets, as shown in the following table:
|
|
|
|
| |
Name
of Fund |
Management Fee |
Pacer
Trendpilot US Large Cap ETF |
0.60% |
Pacer
Trendpilot US Mid Cap ETF |
0.60% |
Pacer
Trendpilot 100 ETF |
0.65% |
Pacer
Trendpilot European Index ETF |
0.65% |
Pacer
Trendpilot US Bond ETF |
0.60% |
Pacer
Trendpilot International ETF |
0.65% |
Pacer
Trendpilot Fund of Funds ETF |
0.15% |
Pacer
US Cash Cows 100 ETF |
0.49% |
Pacer
US Small Cap Cash Cows 100 ETF |
0.59% |
Pacer
Global Cash Cows Dividend ETF |
0.60% |
Pacer
Developed Markets International Cash Cows 100 ETF |
0.65% |
Pacer
Emerging Markets Cash Cows 100 ETF |
0.70% |
Pacer
US Large Cap Cash Cows Growth Leaders ETF |
0.49% |
Pacer
US Cash Cows Growth ETF |
0.60% |
Pacer
Cash Cows Fund of Funds ETF |
0.15% |
Pacer
US Small Cap Cash Cows Growth Leaders ETF |
0.59% |
Pacer
US Export Leaders ETF |
0.60% |
Pacer
International Export Leaders ETF |
0.60% |
Pacer
CSOP FTSE China A50 ETF |
0.70% |
Pacer
Hotel & Lodging Real Estate ETF |
0.60% |
Pacer
Apartments & Residential Real Estate ETF |
0.60% |
Pacer
Healthcare Real Estate ETF |
0.60% |
Pacer
Industrial Real Estate ETF |
0.60% |
Pacer
Data & Infrastructure Real Estate ETF |
0.60% |
Pacer
Autopilot Hedged European Index ETF |
0.65% |
Pacer
WealthShield ETF |
0.60% |
Pacer
CFRA-Stovall Global Seasonal Rotation ETF |
0.60% |
Pacer
CFRA-Stovall Equal Weight Seasonal Rotation ETF |
0.60% |
Pacer
BioThreat Strategy ETF |
0.70% |
Pacer
Lunt Large Cap Alternator ETF |
0.60% |
Pacer
Lunt MidCap Multi-Factor Alternator ETF |
0.60% |
Pacer
Lunt Large Cap Multi-Factor Alternator ETF |
0.60% |
Pacer
Pacific Asset Floating Rate High Income ETF |
0.60% |
Pacer
Data and Digital Revolution ETF |
0.60% |
Pacer
Industrials and Logistics ETF |
0.60% |
Under
the Investment Advisory Agreement between the Adviser and the Trust, on behalf
of the Funds (the “Investment Advisory Agreement”), the Adviser has agreed to
pay all expenses of each Fund, except for: the fee paid to the Adviser pursuant
to the Investment Advisory Agreement, interest charges on any borrowings, taxes,
brokerage commissions and other expenses incurred in placing orders for the
purchase and sale of securities and other investment instruments, acquired fund
fees and expenses, accrued deferred tax liability, extraordinary expenses, and
distribution (12b-1) fees and expenses.
For
INDS and SRVR, the Adviser has agreed to waive 0.05% of its management fee for
each Fund until October 31, 2024. The fee waiver agreement may only be
terminated prior to that date with the consent of the Adviser and the Fund’s
Board of Trustees. For the fiscal year ended April 30, 2024, the Adviser
received management fees, net of waivers, equal to 0.55% of INDS’s average net
assets and 0.55% of SRVR’s average net assets.
With
respect to AFTY, PTBD and FLRT, the Adviser also arranges for sub-advisory
services and provides oversight of each sub-adviser, monitoring of each
sub-adviser’s buying and selling of securities for the respective Fund, and
review of each sub-adviser’s performance. The Adviser compensates each
sub-adviser from the management fee it receives.
The
basis for the Board of Trustees’ approval of the Investment Advisory Agreement
for each Fund that had not commenced operations as of April 30, 2024
(collectively, the “Future Funds”) will be available in such Funds’ first Annual
or Semi-Annual Report to Shareholders. The basis for the Board of Trustees’
approval of the Investment Advisory Agreement for each of GCOW, COWZ, PTBD,
PTEU, PWS and AFTY (the “Semi-Annual Report Funds”) is available in the Funds’
Semi-Annual
Report
to Shareholders for the fiscal period ended October 31, 2023. The basis for the
Board of Trustees’ approval of the Investment Advisory Agreement for each Fund,
other than the Future Funds and the Semi-Annual Report Funds, is available in
such Funds’ Annual
Report
to Shareholders for the fiscal year ended April 30, 2024.
Sub-Advisers
Aristotle
Pacific Capital, LLC (for FLRT)
The
Adviser has retained Aristotle Pacific to serve as sub-adviser for the FLRT.
Aristotle Pacific is responsible for the day-to-day management of the Fund. Its
principal office is located at 840 Newport Center Drive, 7th Floor, Newport
Beach, CA 92660. Aristotle Pacific, a registered investment adviser, is a
subsidiary of Aristotle Capital Management, LLC. For its services, the Adviser
pays Aristotle Pacific the following percentages of net profits as a
sub-advisory fee: 40% on assets up to $500 million; 50% on assets of more than
$500 million. Net profits for the Fund are determined as the management fee of
the Fund, less (i) 0.10% of the Fund’s average net assets and (ii) expenses
related to operating the Fund. For the fiscal year ended April 30, 2024,
the Adviser paid Aristotle Pacific a sub-advisory fee of 0.12% of the Fund’s
average daily net assets.
The
basis for the Board of Trustees’ approval of the Fund’s Sub-Advisory Agreement
with Aristotle Pacific for FLRT is available in the Fund’s Annual
Report
to Shareholders for the fiscal year ended April 30, 2024.
CSOP
Asset Management Limited (for AFTY)
The
Adviser has retained CSOP Asset Management to serve as sub-adviser for the AFTY.
CSOP Asset Management is responsible for the day-to-day management of the Fund.
Its principal place of business is located at Suite 2802, Two Exchange
Square, 8 Connaught Place, Central, Hong Kong. CSOP Asset Management was
established in January 2008 as a subsidiary of China Southern Asset Management
Co. Limited. CSOP Asset Management is the first Hong Kong subsidiary set up by
mainland Chinese fund houses to carry out asset management and securities
advisory activities in Hong Kong. It is dedicated to serving investors as a
gateway for investment between China and the rest of the world, and provides
discretionary management services and advisory services to both institutional
investors and investment funds, including other ETFs.
CSOP
Asset Management is responsible for trading portfolio securities for the Fund,
including selecting broker-dealers to execute purchase and sale transactions or
in connection with any rebalancing or reconstitution of the Index, subject to
the supervision of the Adviser and the Board.
For
its services, the Adviser pays CSOP Asset Management the following percentages
of net revenues as a sub-advisory fee: 20% on assets up to $400 million; 35% on
assets between $400 million and $700 million; and 50% on assets of more than
$700 million. Net revenues are determined by deducting from the Adviser’s fee:
(a) all included expenses which includes substantially all expenses, subject to
the excluded expenses described above, as defined in the applicable
transaction
agreement, and (b) an additional 0.15%. For the fiscal year ended April 30,
2024, the Adviser paid CSOP Asset Management a sub-advisory fee of 0.03% of the
Fund’s average daily net assets.
The
basis for the Board of Trustees’ approval of the investment sub-advisory
agreement with CSOP Asset Management for AFTY is available in the Fund’s
Semi-Annual
Report
to Shareholders for the fiscal period ended October 31, 2023.
Vident
Advisory, LLC (for PTBD)
The
Adviser has retained Vident
Advisory, LLC (“VA”) (d/b/a
Vident Asset Management),
a Delaware limited liability company located at 1125
Sanctuary Parkway, Suite 515, Alpharetta, GA 30009, to serve as sub-adviser for
the PTBD. VA is responsible for the day-to-day management of the Fund.
VA
was
formed in 2016 and commenced operations and registered with the SEC as an
investment adviser in January 2019. VA is majority owned by Vident Capital
Holdings, LLC, which is a wholly-owned subsidiary of MM VAM, LLC, which is
entirely controlled by Casey Crawford.
VA
is responsible for trading portfolio securities for the Fund, including
selecting broker-dealers to execute purchase and sale transactions or in
connection with any rebalancing or reconstitution of the Index, subject to the
supervision of the Adviser and the Board. For its services, VA is paid a fee by
the Adviser, which fee is calculated daily and paid monthly, at an annual rate
based on the average daily net assets of the Fund, and subject to a minimum
annual fee as follows:
|
|
|
|
| |
Sub-Advisory
Fee |
Minimum
Annual Fee |
0.06%
on the first $250 million in net assets; |
$40,000 |
0.05%
on the next $250 million in net assets; and |
0.04%
on net assets in excess of $500 million |
For
the fiscal year ended April 30, 2024, the Adviser paid VA a sub-advisory
fee of 0.07% of the Fund’s average daily net assets.
The
basis for the Board of Trustees’ approval of the investment sub-advisory
agreement with VA for PTBD is available in the Fund’s Semi-Annual
Report
to Shareholders for the fiscal period ended October 31, 2023.
Portfolio
Managers
With
respect to each Fund other than AFTY, FLRT and PTBD, the Funds’ portfolio
management team consists of Bruce Kavanaugh and Danke Wang, CFA, FRM, who are
jointly and primarily responsible for the day-to-day management of such Funds’
portfolios. The portfolio management team for AFTY consists of Yi Wang and Fred
Zhang, who are jointly and primarily responsible for the day-to-day management
of the Fund’s portfolio. The portfolio management team for FLRT consists of Bob
Boyd and Ying Qiu, who are jointly and primarily responsible for the day-to-day
management of the Fund’s portfolio. The portfolio management team for PTBD
consists of Jim Iredale and Jeff Kernagis, who are jointly and primarily
responsible for the day-to-day management of the Fund’s portfolio.
Pacer
Advisors, Inc.
Mr.
Kavanaugh has been Vice President of the Adviser since it began operations in
2004. He has been a portfolio manager with the Adviser since 2013. Mr. Kavanaugh
has more than 25 years of experience in financial services.
Mr.
Wang, Head Portfolio Analyst and Portfolio Manager, joined the Adviser in 2014.
He served as a Senior Portfolio Analyst of the Adviser from 2014 to 2022, and
became Head Portfolio Analyst and a portfolio manager in 2022. Mr. Wang obtained
an MS in Finance from Villanova University and holds the Chartered Financial
Analyst and Financial Risk Manager designations.
Aristotle
Pacific Capital, LLC (for FLRT)
Mr.
Boyd is a Senior Managing Director for Aristotle Pacific Capital, LLC (formerly
Pacific Asset Management LLC) and serves as a Portfolio Manager and Head of
Credit Research. He also has credit research responsibilities across select
sectors. Mr. Boyd joined the firm in 2012. Previously, he was with Pacific
Investment Management Company (“PIMCO”) for 14 years, where he was a Vice
President, Bank Loan Portfolio Manager, and Credit Analyst. Mr. Boyd has over 23
years of investment experience, focused on leveraged finance, credit analysis,
and structured products. He holds a bachelor’s degree from California State
University, Long Beach and an MBA from the University of Southern
California.
Ms.
Qiu is a Managing Director for Aristotle Pacific Capital, LLC (formerly Pacific
Asset Management LLC) and serves as a Portfolio Manager for the Fund and various
investment grade portfolios and the firm’s CLO Opportunities Strategy. In
addition, Ms. Qiu has credit research responsibilities focusing on Asset-Backed
Securities (“ABS”). Prior to joining the firm in 2016, Ms. Qiu was with PIMCO
for 8 years, where she was a Senior Vice President, portfolio manager and trader
for both investment grade corporate and ABS. Prior to that, she worked at ING
Investment Management for 9 years and was an ABS portfolio manager and trader.
Ms. Qiu has 23 years fixed income investment experience, is a CFA Charterholder,
and holds a bachelor’s degree from Renmin University of China and an MBA from
Emory University.
CSOP
Asset Management (for AFTY)
Mr.
Yi Wang, Senior Executive Director, Head of Quantitative Investment, joined CSOP
Asset Management in 2016. Mr. Yi Wang previously worked at Redington, Ltd. as an
Analyst to the Senior Vice President of the Anti-Money Laundering and Investment
Strategy team. Mr. Yi Wang holds a Bachelor’s Degree in Mathematics from
University College London and a Master’s Degree in Actuarial Science from Cass
Business School.
Mr.
Zhang, Senior Portfolio Manager, joined CSOP Asset Management in 2013. Mr. Zhang
has over 12 years of financial industry experience in both China and Hong Kong.
Mr. Zhang has managed, traded and researched passive funds and quantitative
funds since 2004. He has extensive experience in equity, fixed income and
derivatives markets. Mr. Zhang holds a Bachelor’s Degree in Mathematics from
Fudan University.
Vident
Advisory, LLC (for PTBD)
Jim
Iredale, CFA®
became a Senior Portfolio Manager – Fixed Income at Vident in 2015 and has over
15 years of experience managing fixed income products. Prior to joining Vident,
Mr. Iredale was a Manager – Fixed Income with Ronald Blue & Co., one of the
largest independent wealth management firms in the U.S., where he started in
1999. Mr. Iredale graduated with a BBA from the University of Georgia,
Terry College of Business and obtained his JD from the University of Georgia
School of Law. He holds the Chartered Financial Analyst
designation.
Mr.
Kernagis has 32 years of investment experience. Prior to joining VA, Mr.
Kernagis was a Senior Vice President at Northern Trust Asset Management. Before
that, Mr. Kernagis spent almost 14 years at Invesco/PowerShares, where as Senior
Portfolio Manager he directed the fixed income ETF PM team and helped grow
assets to $40 billion in bond ETFs globally. Mr. Kernagis was also a PM at
Claymore (Guggenheim) Securities where he managed both equity ETFs and bond Unit
Investment Trusts. In addition, he was a senior bond trader at Mid-States
(Alloya) Corporate Federal Credit Union. Prior to working in investment
management, Mr. Kernagis held institutional derivative sales positions at ABN
Amro, Bear Stearns, and Prudential Securities. Mr. Kernagis earned a BBA degree
from the University of Notre Dame and an MBA from DePaul University. He also
holds the Chartered Financial Analyst designation.
The
SAI provides additional information about each Portfolio Manager’s compensation
structure, other accounts managed by the Portfolio Managers, and the Portfolio
Managers’ ownership of Shares of each Fund for which they are a portfolio
manager.
ADDITIONAL
INFORMATION ON BUYING AND SELLING FUND SHARES
Most
investors will buy and sell Shares of the Funds through brokers. Shares of each
Fund trade on the applicable exchange as listed on the cover of this Prospectus
(each, the applicable “Exchange”) and elsewhere during the trading day and can
be bought and sold throughout the trading day like other shares of publicly
traded securities. When buying or selling Shares through a broker, most
investors will incur customary brokerage commissions and charges. Shares of each
Fund trade under the trading symbol listed on the cover of this Prospectus. Only
authorized participants (“Authorized Participants” or “APs”) who have entered
into agreements with the Funds’ distributor may acquire Shares directly from a
Fund, and only APs may tender their Shares for redemption directly to each Fund,
at NAV in Creation Units. Once created, Shares trade in the secondary market in
amounts less than a Creation Unit.
Share
Trading Prices
Transactions
in each Fund’s Shares will be priced at NAV only if you purchase Shares directly
from each Fund in Creation Units. As with other types of securities, the trading
prices of Shares in the secondary market can be affected by market forces such
as supply and demand, economic conditions and other factors. The price you pay
or receive when you buy or sell your Shares in the secondary market may be more
or less than the NAV of such Shares.
Determination
of Net Asset Value
The
NAV of each Fund’s Shares is calculated each day the New York Stock Exchange
(“NYSE”) is open for trading as of the close of regular trading on the NYSE,
generally 4:00 p.m. Eastern Time (the “NAV Calculation Time”). If the NYSE
closes before 4:00 p.m. Eastern Time, as it occasionally does, the NAV
Calculation Time will be the time the NYSE closes. In addition, any U.S.
fixed-income assets may be valued as of the announced closing time of trading in
fixed income instruments on any day that the Securities Industry and Financial
Markets Association announces an early closing time. Each Fund’s NAV per share
is calculated by dividing the Fund’s net assets by the number of Fund Shares
outstanding.
In
calculating its NAV, each Fund generally values its assets on the basis of
market quotations, last sale prices, or estimates of value furnished by a
pricing service or brokers who make markets in such instruments. Debt
obligations with maturities of 60 days or less are valued at amortized
cost.
Fair
Value Pricing
The
Adviser has been designated by the Board as the valuation designee for each Fund
pursuant to Rule 2a-5 under the 1940 Act. In its capacity as valuation designee,
the Adviser has adopted procedures and methodologies to fair value Fund
securities whose market prices are not “readily available” or are deemed to be
unreliable. For example, such circumstances may arise when: (i) a security has
been de-listed or has had its trading halted or suspended; (ii) a security’s
primary pricing source is unable or unwilling to provide a price; (iii) a
security’s primary trading market is closed during regular market hours; or (iv)
a security’s value is materially affected by events occurring after the close of
the security’s primary trading market. The Board has appointed the Adviser as
the Fund’s valuation designee to perform all fair valuations of the Fund’s
portfolio investments, subject to the Board’s oversight. Accordingly, the
Adviser has established procedures for its fair valuation of the Fund’s
portfolio investments. Generally, when fair valuing a security held by the Fund,
the Adviser will take into account all reasonably available information that may
be relevant to a particular valuation including, but not limited to, fundamental
analytical data regarding the issuer, information relating to the issuer’s
business, recent trades or offers of the security, general and/or specific
market conditions and the specific facts giving rise to the need to fair value
the security. Fair value determinations are made in good faith and in accordance
with the fair value methodologies established by the Adviser and approved by the
Board. Due to the subjective and variable nature of determining the fair value
of a security or other investment, there can be no assurance that the Adviser’s
fair value will match or closely correlate to any market quotation that
subsequently becomes available or the price quoted or published by other
sources. In addition, the Fund may not be able to obtain the fair value assigned
to the security upon the sale of such security.
Dividends
and Distributions
Each
of GCOW, COWZ, CALF, ICOW, ECOW, BUL, HERD, PWS, PEXL, SZNE, SZNG, RXRE, ROOM,
PAD, INDS, SRVR, VIRS, ALTL, PAMC, PALC, TRFK, and SHPP expects to pay out
dividends, if any, on a quarterly basis and FLRT and PTBD expect to pay out
dividends, if any, on a monthly basis. Each other Fund expects to pay out
dividends, if any, on an annual basis. Nonetheless, each Fund may make more
frequent dividend payments. Each Fund expects to distribute its net realized
capital gains to investors annually. Each Fund occasionally may be required to
make supplemental distributions at some other time during the year.
Distributions in cash may be reinvested automatically in additional whole Shares
only if the broker through whom you purchased Shares makes such option
available. Your broker is responsible for distributing the income and capital
gain distributions to you.
Book
Entry
Shares
of each Fund are held in book-entry form, which means that no stock certificates
are issued. The Depository Trust Company (“DTC”) or its nominee is the record
owner of all outstanding Shares of each Fund.
Investors
owning Shares of each Fund are beneficial owners as shown on the records of DTC
or its participants. DTC serves as the securities depository for all Shares of
each Fund. Participants include DTC, securities brokers and dealers, banks,
trust companies, clearing corporations, and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
Shares, you are not entitled to receive physical delivery of stock certificates
or to have Shares registered in your name, and you are not considered a
registered owner of Shares. Therefore, to exercise any right as an owner of
Shares, you must rely upon the procedures of DTC and its participants. These
procedures are the same as those that apply to any securities that you hold in
book-entry or “street name” form. Your broker will provide you with account
statements, confirmations of your purchases and sales, and tax
information.
Delivery
of Shareholder Documents – Householding
Householding
is an option available to certain investors of each Fund. Householding is a
method of delivery, based on the preference of the individual investor, in which
a single copy of certain shareholder documents can be delivered to investors who
share the same address, even if their accounts are registered under different
names. Householding for each Fund is available through certain broker-dealers.
If you are interested in enrolling in householding and receiving a single copy
of prospectuses and other shareholder documents, please contact your
broker-dealer. If you are currently enrolled in householding and wish to change
your householding status, please contact your broker-dealer.
Frequent
Purchases and Redemptions of Fund Shares
Each
Fund imposes no restrictions on the frequency of purchases and redemptions of
Fund Shares. In determining not to impose such restrictions, the Board evaluated
the risks of market timing activities by Fund shareholders. Purchases and
redemptions by APs, who are the only parties that may purchase or redeem Shares
directly with a Fund, are an essential part of the ETF process and help keep
Fund Share trading prices in line with NAV. As such, each Fund accommodates
frequent purchases and redemptions by APs. However, the Board has also
determined that frequent purchases and redemptions for cash may increase
tracking error and portfolio transaction costs and may lead to the realization
of capital gains. To minimize these potential consequences of frequent purchases
and redemptions, each Fund imposes transaction fees on purchases and redemptions
of Creation Units to cover the custodial and other costs incurred by the Fund in
effective trades. In addition, each Fund and the Adviser reserve the right to
reject any purchase order at any time.
Investments
by Registered Investment Companies
Section
12(d)(1) of the 1940 Act restricts investments by registered investment
companies in the securities of other investment companies, including Shares of
each Fund. Registered investment companies are permitted to invest in each Fund
beyond the limits set forth in section 12(d)(1), subject to certain terms and
conditions set forth in Rule 12d1-4 under the 1940 Act, including that such
investment companies enter into an agreement with the applicable Fund(s).
Consequently, such relief is not expected to be available for TRND and
HERD.
ADDITIONAL
TAX INFORMATION
The
following discussion is a summary of some important U.S. federal income tax
considerations generally applicable to investments in the Funds. Your investment
in the Funds may have other tax implications. Please consult your tax advisor
about the tax consequences of an investment in Fund Shares, including the
possible application of foreign, state, and local tax laws.
The
Funds have qualified and intend to continue to qualify each year for treatment
as a regulated investment company (“RIC”). If it meets certain minimum
distribution requirements, a RIC is not subject to tax at the fund level on
income and gains from investments that are timely distributed to shareholders.
However, a Fund’s failure to qualify as a RIC or to meet minimum distribution
requirements would result (if certain relief provisions were not available) in
fund-level taxation and, consequently, a reduction in income available for
distribution to shareholders.
Unless
you are a tax-exempt entity or your investment in Fund Shares is made through a
tax advantaged retirement account, such as an IRA, you need to be aware of the
possible tax consequences when:
•A
Fund makes distributions;
•You
sell Fund Shares; and
•You
purchase or redeem Creation Units (institutional investors only).
Taxes
on Distributions
Tax
reform legislation commonly known as the Tax Cuts and Jobs Act (the “Tax Act”)
was enacted on December 22, 2017. The Tax Act made significant changes to the
U.S. federal income tax rules for individuals and corporations, generally
effective for taxable years beginning after December 31, 2017. The application
of certain provisions of the Tax Act is uncertain, and the changes in the act
may have indirect effects on the Funds, its investments and its shareholders
that cannot be predicted. For federal income tax purposes, distributions of
investment income are generally taxable as ordinary income or “qualified
dividend income.” Taxes on distributions of capital gains (if any) depend on how
long a Fund owned the assets that generated them, rather than how long a
shareholder has owned his or her Fund Shares. Sales of assets held by a Fund for
more than one year generally result in long-term capital gains and losses, and
sales of assets held by a Fund for one year or less generally result in
short-term capital gains and losses. Distributions of a Fund’s net capital
gain
(the excess of net long-term capital gains over net short-term capital losses)
that are properly reported by the Fund as capital gain dividends (“Capital Gain
Dividends”) are taxable as long-term capital gains. For noncorporate
shareholders, long-term capital gains are generally subject to tax at reduced
rates and currently set at a maximum rate of 20%. Distributions of short-term
capital gain are generally taxable as ordinary income. Distributions of
investment income reported by a Fund as derived from “qualified dividend income”
will be taxed at long term capital gain rates for non-corporate
shareholders.
U.S.
individuals with income exceeding specified thresholds are subject to a 3.8%
Medicare contribution tax on all or a portion of their “net investment income,”
which includes interest, dividends, and certain capital gains (generally
including capital gain distributions and capital gains realized on the sale or
exchange of Fund Shares).
In
general, your distributions are subject to federal income tax for the year in
which they are paid. Certain distributions paid in January, however, may be
treated as paid on December 31 of the prior year. Distributions are
generally taxable even if they are paid from income or gains earned by the Funds
before your investment (and thus were included in the Fund Shares’ NAV when you
purchased your Fund Shares).
A
Fund may include a payment of cash in addition to, or in place of, the delivery
of a basket of securities upon the redemption of Creation Units. The Funds may
sell portfolio securities to obtain the cash needed to distribute redemption
proceeds. This may cause the Funds to recognize investment income and/or capital
gains or losses that it might not have recognized if it had completely satisfied
the redemption in-kind. As a result, the Funds may be less tax efficient if it
includes such a cash payment in the proceeds paid upon the redemption of
Creation Units.
Nonresident
aliens, foreign corporations and other foreign shareholders in the Funds will
generally be exempt from U.S. federal income tax on Capital Gain Dividends. The
exemption may not apply, however, if the investment in a Fund is connected to a
trade or business for the foreign shareholder in the United States or if the
foreign shareholder is present in the United States for 183 days or more in a
year and certain other conditions are met.
Distributions
(other than Capital Gain Dividends) paid to individual shareholders that are
neither citizens nor residents of the U.S. or to foreign entities will generally
be subject to a U.S. withholding tax at the rate of 30%, unless a lower treaty
rate applies. The Funds may, under certain circumstances, report all or a
portion of a dividend as an “interest-related dividend” or a “short-term capital
gain dividend,” which would generally be exempt from this 30% U.S. withholding
tax, provided certain other requirements are met. Short-term capital gain
dividends received by a nonresident alien individual who is present in the U.S.
for a period or periods aggregating 183 days or more during the taxable year are
not exempt from this 30% withholding tax. Gains realized by foreign shareholders
from the sale or other disposition of Shares of a Fund generally are not subject
to U.S. taxation, unless the recipient is an individual who is physically
present in the U.S. for 183 days or more per year.
The
Funds (or a financial intermediary, such as a broker, through which shareholders
own Fund Shares) generally are required to withhold and to remit to the US
Treasury a percentage of the taxable distributions and the sale or redemption
proceeds paid to any shareholder who fails to properly furnish a correct
taxpayer identification number, who has under-reported dividend or interest
income, or who fails to certify that he, she or it is not subject to such
withholding.
A
U.S. withholding tax at a 30% rate will be imposed on dividends effective July
1, 2014 (and proceeds of sales in respect of Fund Shares (including certain
capital gain dividends) received by Fund shareholders beginning after December
31, 2018) for shareholders who own their Shares through foreign accounts or
foreign intermediaries if certain disclosure requirements related to U.S.
accounts or ownership are not satisfied. The Funds will not pay any additional
amounts in respect to any amounts withheld.
To
the extent a Fund invests in foreign securities, it may be subject to foreign
withholding taxes with respect to dividends or interest the Fund received from
sources in foreign countries. If more than 50% of the total assets of a Fund
consists of foreign securities, such Fund will be eligible to elect to treat
some of those taxes as a distribution to shareholders, which would allow
shareholders to offset some of their U.S. federal income tax. The Funds (or its
administrative agent) will notify you if it makes such an election and provide
you with the information necessary to reflect foreign taxes paid on your income
tax return.
Taxes
When Fund Shares Are Sold
Any
capital gain or loss realized upon a sale of Fund Shares is generally treated as
a long-term gain or loss if the Shares have been held for more than one year.
Any capital gain or loss realized upon a sale of Fund Shares held for one year
or less is generally treated as a short-term gain or loss, except that any
capital loss on a sale of Shares held for six months or less is treated as
long-term capital loss to the extent that Capital Gain Dividends were paid with
respect to such Shares. The ability to deduct capital losses may be limited
depending on your circumstances.
A
foreign shareholder will generally not be subject to U.S. tax on gains realized
on sales or exchange of Fund Shares unless the investment in a Fund is connected
to a trade or business of the investor in the United States or if the
shareholder is present in the United States for 183 days or more in a year and
certain other conditions are met. All foreign shareholders should consult their
own tax advisors regarding the tax consequences in their country of residence of
an investment in a Fund.
Creation
and Redemption Units
An
Authorized Participant who exchanges securities for Creation Units generally
will recognize a gain or a loss. The gain or loss will be equal to the
difference between the market value of the Creation Units at the time and the
sum of the exchanger’s aggregate basis in the securities surrendered plus the
amount of cash paid for such Creation Units. A person who redeems Creation Units
will generally recognize a gain or loss equal to the difference between the
exchanger’s basis in the Creation Units and the sum of the aggregate market
value of any securities received plus the amount of any cash received for such
Creation Units. The Internal Revenue Service, however, may assert that a loss
realized upon an exchange of securities for Creation Units cannot be deducted
currently under the rules governing “wash sales,” or on the basis that there has
been no significant change in economic position.
Any
capital gain or loss realized upon the creation of Creation Units will generally
be treated as long-term capital gain or loss if the securities exchanged for
such Creation Units have been held for more than one year. Any capital gain or
loss realized upon the redemption of Creation Units will generally be treated as
long-term capital gain or loss if the Shares comprising the Creation Units have
been held for more than one year. Otherwise, such capital gains or losses will
be treated as short-term capital gains or losses. Persons purchasing or
redeeming Creation Units should consult their own tax advisors with respect to
the tax treatment of any creation or redemption transaction.
The
Funds have the right to reject an order for Creation Units if the purchaser (or
group of purchasers) would, upon obtaining the Shares so ordered, own 80% or
more of the outstanding Shares of the Fund and if, pursuant to section 351 of
the Internal Revenue Code, the respective Fund would have a basis in the deposit
securities different from the market value of such securities on the date of
deposit. The Funds also have the right to require information necessary to
determine beneficial Share ownership for purposes of the 80%
determination.
Foreign
Investments by the Funds
Interest
and other income received by the Funds with respect to foreign securities may
give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If as of the close of a taxable year more than 50% of the
value of a Fund’s assets consists of certain foreign stock or securities, each
such Fund will be eligible to elect to “pass through” to investors the amount of
foreign income and similar taxes (including withholding taxes) paid by such Fund
during that taxable year. This means that investors would be considered to have
received as additional income their respective Shares of such foreign taxes, but
may be entitled to either a corresponding tax deduction in calculating taxable
income, or, subject to certain limitations, a credit in calculating federal
income tax. If a Fund does not so elect, each such Fund will be entitled to
claim a deduction for certain foreign taxes incurred by such Fund. A Fund (or
your broker) will notify you if it makes such an election and provide you with
the information necessary to reflect foreign taxes paid on your income tax
return.
The
foregoing discussion summarizes some of the possible consequences under current
federal tax law of an investment in the Funds. It is not a substitute for
personal tax advice. You also may be subject to state and local tax on Fund
distributions and sales of Shares. Consult your personal tax advisor about the
potential tax consequences of an investment in Shares
under
all applicable tax laws. For more information, please see the section entitled
“Federal Income Taxes” in the SAI.
State
and Local Taxes
Shareholders
may also be subject to state and local taxes on income and gain attributable to
your ownership of Fund Shares. State income taxes may not apply, however, to the
portions of a Fund’s distributions, if any, that are attributable to interest
earned by a Fund on U.S. government securities. You should consult your tax
professional regarding the tax status of distributions in your state and
locality.
Foreign
Taxes
To
the extent the Fund invests in foreign securities, it may be subject to foreign
withholding taxes with respect to dividends or interest the Fund received from
sources in foreign countries.
DISTRIBUTION
The
Distributor, Pacer Financial, Inc., is a broker-dealer registered with the U.S.
Securities and Exchange Commission. The Distributor distributes Creation Units
for each Fund on an agency basis and does not maintain a secondary market in
Shares. The Distributor has no role in determining the policies of each Fund or
the securities that are purchased or sold by each Fund. The Distributor’s
principal address is 500 Chesterfield Parkway, Malvern, Pennsylvania, 19355. The
Distributor is an affiliate of the Adviser.
For
all Funds except AFTY,
the Board has adopted a Distribution and Service Plan (the “Plan”) pursuant to
Rule 12b-1 under the 1940 Act. In accordance with the Plan, each Fund is
authorized to pay an amount up to 0.25% of its average daily net assets each
year for certain distribution-related activities and shareholder
services.
No
Rule 12b-1 fees are currently paid by the Funds, and there are no plans to
impose these fees. However, in the event Rule 12b-1 fees are charged in the
future, because the fees are paid out of a Fund’s assets, over time these fees
will increase the cost of your investment and may cost you more than certain
other types of sales charges.
PREMIUM/DISCOUNT
INFORMATION
With
respect to the Future Funds, information regarding how often Shares of each Fund
traded on the Exchange at a price above (i.e.,
at a premium) or below (i.e.,
at a discount) the NAV of the fund will be available in the future on the Funds’
website at www.PacerETFs.com. With respect to all other Funds, information
regarding how often Shares of each Fund traded on an Exchange at a price above
(i.e.,
at a premium) or below (i.e.,
at a discount) the NAV of the fund is available on the Funds’ website at
www.PacerETFs.com.
ADDITIONAL
NOTICES
The
Funds are not sponsored, endorsed, sold or promoted by FTSE Russell, or any of
their respective affiliates or their third party licensors. Neither FTSE Russell
nor their third party licensors make any representation or warranty, express or
implied, to the owners of the Funds or any member of the public regarding the
advisability of investing in securities generally or in the Funds particularly
or the ability of the Russell 1000 Index to track general stock market
performance. FTSE Russell and their third party licensor’s only relationship to
IDG is the licensing of certain trademarks, service marks and trade names of
FTSE Russell and/or their third party licensors and for the providing of
calculation and maintenance services related to the Index. Neither FTSE Russell
nor their third party licensors are responsible for and have not participated in
the determination of the prices and amount of the Funds or the timing of the
issuance or sale of the Funds or in the determination or calculation of the
equation by which the Funds are to be converted into cash. FTSE Russell has no
obligation or liability in connection with the administration, marketing or
trading of the Funds. FTSE Russell and its subsidiaries are not investment
advisors. Inclusion of a security or futures contract within an index is not a
recommendation by FTSE Russell or its subsidiaries to buy, sell, or hold such
security or futures contract, nor is it considered to be investment
advice.
FTSE
Group (“FTSE”) is located at 12th Floor, 10 Upper Bank Street, Canary
Wharf, London E14 5NP. FTSE publishes the Index for the AFTY, as described in
the Prospectus. FTSE or its affiliates are the proprietors and absolute owners
of such Index and the designation “FTSE®.” FTSE has granted to the Adviser (by
way of a license, subject to the terms of an index license agreement between
them), among other things, the non-transferable and non-exclusive right to use
such Index in respect of AFTY and to sponsor, issue, establish, market, list,
and distribute AFTY.
NEITHER
FTSE RUSSELL NOR THEIR THIRD PARTY LICENSORS GUARANTEE THE ADEQUACY, ACCURACY,
TIMELINESS OR COMPLETENESS OF THE RUSSELL 1000 OR ANY DATA INCLUDED
THEREIN
OR ANY COMMUNICATIONS, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN
COMMUNICATIONS (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. FTSE
RUSSELL AND THEIR THIRD PARTY LICENSORS SHALL NOT BE SUBJECT TO ANY DAMAGES OR
LIABILITY FOR ANY ERRORS, OMISSIONS OR DELAYS THEREIN. FTSE RUSSELL ENTITIES
MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THEIR
MARKS, THE RUSSELL 1000 OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF
THE FOREGOING, IN NO EVENT WHATSOEVER SHALL FTSE RUSSELL INDICES ENTITIES OR
THEIR THIRD PARTY LICENSORS BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF
PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY
OR OTHERWISE.
Shares
are not sponsored, endorsed, or promoted by the Exchange. The Exchange makes no
representation or warranty, express or implied, to the owners of Fund Shares or
any member of the public regarding the ability of the Funds to track the total
return performance of the Indexes or the ability of the Indexes identified
herein to track the performance of its constituent securities. The Exchange is
not responsible for, nor has it participated in, the determination of the
compilation or the calculation of the Indexes, nor in the determination of the
timing of, prices of, or quantities of Fund Shares to be issued, nor in the
determination or calculation of the equation by which Shares are redeemable. The
Exchange has no obligation or liability to owners of Fund Shares in connection
with the administration, marketing, or trading of Fund Shares.
The
Exchange does not guarantee the accuracy and/or the completeness of the Indexes
or the data included therein. The Exchange makes no warranty, express or
implied, as to results to be obtained by the Trust on behalf of each Fund,
owners of the Shares, or any other person or entity from the use of the Index or
the data included therein. The Exchange makes no express or implied warranties,
and hereby expressly disclaims all warranties of merchantability or fitness for
a particular purpose with respect to the Indexes or the data included therein.
Without limiting any of the foregoing, in no event shall the Exchange have any
liability for any lost profits or indirect, punitive, special, or consequential
damages even if notified of the possibility thereof.
The
Adviser, each sub-adviser, the Index Provider, the Exchange, and each Fund make
no representation or warranty, express or implied, to the owners of Fund Shares
or any member of the public regarding the advisability of investing in
securities generally or in each Fund particularly. The Adviser and CSOP Asset
Management have no obligation to take the needs of each Fund or the owners of
Shares of each Fund into consideration in determining, composing, or calculating
each Index.
The
Funds are not sponsored, endorsed, sold or promoted by The NASDAQ OMX Group,
Inc. or its affiliates (NASDAQ OMX, with its affiliates, are referred to as the
“Corporations”). The Corporations have not passed on the legality or suitability
of, or the accuracy or adequacy of descriptions and disclosures relating to, the
Funds. The Corporations make no representation or warranty, express or implied
to the owners of the Funds or any member of the public regarding the
advisability of investing in securities generally or in the Funds particularly,
or the ability of the Pacer NASDAQ-100 Trendpilot Index or
NASDAQ-100®
Index to track general market performance. The Corporations’ only relationship
to Pacer Advisers, Inc. (“Company”) is in the licensing of the
NASDAQ-100®
Index
registered
trademarks, and certain trade names of the Corporations and the use of the
NASDAQ-100®
Index and Pacer NASDAQ-100 Trendpilot Index which are determined, composed and
calculated by NASDAQ OMX without regard to Company or the Funds. NASDAQ OMX has
no obligation to take the needs of the Company or the owners of the Funds into
consideration in determining, composing or calculating the
NASDAQ-100®
Index and Pacer NASDAQ-100 Trendpilot Index.
The
Corporations are not responsible for and have not participated in the
determination of the timing of, prices at, or quantities of the Funds to be
issued or in the determination or calculation of the equation by which the Funds
are to be converted into cash. The Corporations have no liability in connection
with the administration, marketing or trading of the Funds.
THE
CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION OF
THE NASDAQ-100®
INDEX AND PACER NASDAQ-100 TRENDPILOT INDEX OR ANY DATA INCLUDED THEREIN. THE
CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED
BY COMPANY, OWNERS OF THE FUNDS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF
THE NASDAQ-100®
INDEX AND PACER NASDAQ-100 TRENDPILOT INDEX
OR
ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED
WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100®
INDEX AND PACER NASDAQ-100 TRENDPILOT INDEX OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE
ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT,
OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH
DAMAGES.
The
Pacer Trendpilot US Large Cap Index, Pacer Trendpilot US Mid Cap Index, Pacer US
Small Cap Cash Cows Index, and Pacer US Cash Cows Growth Index (each, an “Index”
and collectively, the “Indexes”) are the property of IDG, which has contracted
with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) to
calculate and maintain each Index. The Indexes are not sponsored by S&P Dow
Jones Indices LLC or its affiliates or its third party licensors, including
Standard & Poor’s Financial Services LLC and Dow Jones Trademark Holdings
LLC (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices will
not be liable for any errors or omissions in calculating the Indexes.
“Calculated by S&P Dow Jones Indices” and the related stylized mark(s) are
service marks of S&P Dow Jones Indices and have been licensed for use by
IDG. S&P®
is a registered trademark of Standard & Poor’s Financial Services LLC, and
Dow Jones®
is a registered trademark of Dow Jones Trademark Holdings LLC.
PTLC,
PTMC, CALF, PWS, PTIN and BUL, (for this section only, the “Funds”), each based
on an Index, are not sponsored, endorsed, sold or promoted by S&P Dow Jones
Indices, or any of their respective affiliates or their third party licensors.
Neither S&P Dow Jones Indices nor their third party licensors make any
representation or warranty, express or implied, to the owners of the Funds or
any member of the public regarding the advisability of investing in securities
generally or in the Funds particularly or the ability of the S&P Indexes to
track general market performance. S&P Dow Jones Indices and their third
party licensor’s only relationship to IDG is the licensing of certain
trademarks, service marks and trade names of S&P Dow Jones Indices and/or
their third party licensors and for the providing of calculation and maintenance
services related to the Index. Neither S&P Dow Jones Indices nor their third
party licensors are responsible for and have not participated in the
determination of the prices and amount of the Funds or the timing of the
issuance or sale of the Funds or in the determination or calculation of the
equation by which the Funds are to be converted into cash. S&P Dow Jones
Indices has no obligation or liability in connection with the administration,
marketing or trading of the Funds. S&P Dow Jones Indices LLC and its
subsidiaries are not investment advisors. Inclusion of a security or futures
contract within an index is not a recommendation by S&P Dow Jones Indices or
its subsidiaries to buy, sell, or hold such security or futures contract, nor is
it considered to be investment advice.
NEITHER
S&P DOW JONES INDICES NOR THEIR THIRD PARTY LICENSORS GUARANTEE THE
ADEQUACY, ACCURACY, TIMELINESS OR COMPLETENESS OF THE S&P INDEXES OR ANY
DATA INCLUDED THEREIN OR ANY COMMUNICATIONS, INCLUDING BUT NOT LIMITED TO, ORAL
OR WRITTEN COMMUNICATIONS (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT
THERETO. S&P DOW JONES INDICES AND THEIR THIRD PARTY LICENSORS SHALL NOT BE
SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS
THEREIN. S&P DOW JONES INDICES ENTITIES MAKE NO EXPRESS OR IMPLIED
WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THEIR MARKS, THE S&P OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT
WHATSOEVER SHALL S&P DOW JONES INDICES ENTITIES OR THEIR THIRD PARTY
LICENSORS BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR
CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING
LOSSES, LOST TIME, OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR
OTHERWISE.
TRFK
and SHPP (for this section only, the “Funds”) are not sponsored, endorsed, or
promoted by NYSE Arca, Inc. (the “Exchange”). The Exchange makes no
representation or warranty, express or implied, to the owners of the Shares or
any member of the public regarding the ability of the Funds to track the total
return performance of their respective Index or the ability of the Indexes
identified herein to track the performance of their constituent securities. The
Exchange is not responsible for, nor has it participated in, the determination
of the compilation or the calculation of the Indexes, nor in the determination
of the timing of, prices of, or quantities of the Shares to be issued, nor in
the determination or calculation of the equation by which the Shares are
redeemable. The Exchange has no obligation or liability to owners of the Shares
in
connection
with the administration, marketing, or trading of the Shares. The Exchange does
not guarantee the accuracy and/or the completeness of the Indexes or the data
included therein. The Exchange makes no warranty, express or implied, as to
results to be obtained by the Funds, owners of the Shares, or any other person
or entity from the use of the Indexes or the data included therein. The Exchange
makes no express or implied warranties, and hereby expressly disclaims all
warranties of merchantability or fitness for a particular purpose with respect
to the Indexes or the data included therein. Without limiting any of the
foregoing, in no event shall the Exchange have any liability for any lost
profits or indirect, punitive, special, or consequential damages even if
notified of the possibility thereof.
The
Adviser, the Index Provider, the Exchange, and the Funds make no representation
or warranty, express or implied, to the owners of Shares or any member of the
public regarding the advisability of investing in securities generally or in the
Funds particularly. The Funds do not guarantee the accuracy, completeness, or
performance of the Indexes or the data included therein and shall have no
liability in connection with the Indexes or Index calculation.
The
Index Provider owns the Indexes and each Index methodology and is a licensor of
the Indexes to the Adviser and index receipt agent. The Index Provider has
contracted with an index calculation agent to maintain and calculate the Indexes
used by the Funds. The index calculation agents maintain and calculate the
Indexes used by the Funds. The index calculation agent shall have no liability
for any errors or omissions in calculating the Indexes.
IDG
and its affiliates have not passed on the legality or suitability of, or the
accuracy or adequacy of descriptions and disclosures relating to each Index. IDG
makes no representation or warranty, express or implied, to the owners of the
Funds or any member of the public regarding the advisability of investing in
securities generally or in any Fund particularly, or the ability of the Index to
track general market performance. IDG’s only relationship to the Funds is in the
licensing to the Adviser of certain indexes, related trademarks, and certain
trade names of IDG and the use of each Index for which it is the Index Provider.
Each such Index is determined, composed, and calculated independently by a third
party on behalf of IDG without regard to the Adviser or the Funds. IDG has no
obligation to take the needs of the Adviser or the owners of the Fund into
consideration in determining, composing, or calculating the Index. IDG is not
responsible for and has not participated in the determination of the timing of,
prices at, or quantities of the Funds to be issued or in the determination or
calculation of the equation by which shares of the Fund are to be converted into
cash. IDG has no liability in connection with the administration, marketing, or
trading of the Fund.
IDG
DOES NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION OF ANY INDEX OR
ANY DATA INCLUDED THEREIN. IDG MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO
RESULTS TO BE OBTAINED BY THE ADVISER, OWNERS OF THE FUNDS, OR ANY OTHER PERSON
OR ENTITY FROM THE USE OF ANY INDEX. IDG MAKES NO EXPRESS OR IMPLIED WARRANTIES,
AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO EACH INDEX OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE INDEX
PROVIDER HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL,
PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.
SZNG
and SZNE (together, the “CFRA Funds”) are not sponsored, endorsed, sold or
promoted by the Exchange, SPDJI, or any of their respective affiliates or their
third party licensors. None of the Exchange, SPDJI or their third party
licensors make any representation or warranty, express or implied, to the owners
of the CFRA Funds or any member of the public regarding the advisability of
investing in securities generally or in the Funds particularly or the ability of
the S&P Indices to track general stock market performance. SPDJI and their
third party licensor’s only relationship to the Adviser is the licensing of
certain trademarks, service marks, and trade names of SPDJI and/or their third
party licensors and for the providing of calculation and maintenance services
related to the Index. None of the Exchange, SPDJI, or their third party
licensors are responsible for or have participated in the determination of the
prices and amount of the CFRA Funds or the timing of the issuance or sale of the
CFRA Funds or in the determination or calculation of the equation by which the
Funds are to be converted into cash. Neither the Exchange nor SPDJI has any
obligation or liability in connection with the administration, marketing, or
trading of the CFRA Funds. SPDJI and its subsidiaries are not investment
advisers. Inclusion of a security or futures contract within an index is not a
recommendation by SPDJI or its subsidiaries to buy, sell, or hold such security
or futures contract, nor is it considered to be investment advice.
NONE
OF THE EXCHANGE, SPDJI OR THEIR THIRD PARTY LICENSORS GUARANTEE THE ADEQUACY,
ACCURACY, TIMELINESS, OR COMPLETENESS OF THE S&P INDICES OR ANY DATA
INCLUDED
THEREIN OR ANY COMMUNICATIONS, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN
COMMUNICATIONS (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. NONE
OF THE EXCHANGE, SPDJI OR THEIR THIRD PARTY LICENSORS SHALL BE SUBJECT TO ANY
DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. THE EXCHANGE
AND SPDJI ENTITIES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM
ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THEIR MARKS, THE S&P INDICES, OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL THE
EXCHANGE, SPDJI ENTITIES, OR THEIR THIRD PARTY LICENSORS BE LIABLE FOR ANY
INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT
NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF
THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT,
TORT, STRICT LIABILITY, OR OTHERWISE.
HERD,
INDS, and SRVR are not sponsored, promoted, sold or supported in any other
manner by Solactive AG nor does Solactive AG offer any express or implicit
guarantee or assurance either with regard to the results of using the Pacer Cash
Cows Fund of Funds Index, Solactive GPR Industrial Real Estate Index, and
Solactive GPR Data & Infrastructure Real Estate Index (for this paragraph
only, the “Indexes”) and/or Indexes trade mark or the Indexes price at any time
or in any other respect. The Indexes are calculated and published by Solactive
AG. Solactive AG uses its best efforts to ensure that the Indexes are calculated
correctly. Irrespective of its obligations towards the Funds, Solactive AG has
no obligation to point out errors in the Indexes to third parties including but
not limited to investors and/or financial intermediaries of HERD, INDS, and
SRVR. Neither publication of the Indexes by Solactive AG nor the licensing of
the Indexes or Indexes trade mark for the purpose of use in connection with
HERD, INDS, and SRVR constitutes a recommendation by Solactive AG to invest
capital in said Fund, nor does it in any way represent an assurance or opinion
of Solactive AG with regard to any investment in the Funds.
Lunt
Capital Management, Inc. (“Lunt Capital”) is not affiliated with the Trust, the
Lunt ETF’s administrator, custodian, transfer agent, or distributor. The Lunt
Capital U.S. Large Cap Equity Rotation Index, the Lunt Capital MidCap
Multi-Factor Rotation Index, and the Lunt Capital Large Cap Multi-Factor
Rotation Index (each, a “Lunt Index”) are products of Lunt Capital. The Adviser
(or, the “Licensee”) has entered into a license agreement with Lunt Capital
pursuant to which the Licensee pays a fee to use each Index and the marketing
names and licensed trademarks of Lunt Capital (the “Trademarks”). The Licensee
is sub-licensing rights to each Index to its respective Fund. Lunt Capital has
no obligation to take the needs of the Licensee or the owners of the Lunt ETFs
into consideration in determining, composing or calculating the Lunt Indexes.
Lunt Capital shall not be liable (whether in negligence or otherwise) to any
person for any error in the Lunt Index and shall not be under any obligation to
advise any person of any error therein. Neither the publication of each Lunt
Index by Lunt Capital nor the granting of a license of rights relating to each
Index or to the Trademarks for the utilization in connection with the Fund
represents a recommendation by Lunt Capital for a capital investment or contains
in any manner a warranty or opinion by Lunt Capital with respect to the
attractiveness of an investment in the Fund. The Lunt ETFs are not sponsored,
endorsed, or sold by Lunt Capital. Lunt Capital makes no representation or
warranty, express or implied, to the owners of the Lunt ETFs or any member of
the public regarding the advisability of trading in the Lunt ETFs. Lunt Capital
is not responsible for and have not participated in the determination of the
timing of, prices at, or quantities of each Fund to be sold or in the
determination or calculation of the equation by which a Fund is to be converted
into cash. Notwithstanding the foregoing, Lunt Capital may independently issue
and/or sponsor financial products unrelated to the Lunt ETFs currently being
issued by the Licensee, but which may be similar to and competitive with the
Lunt ETFs. In addition, Lunt Capital may trade financial products which are
linked to the performance of each Index. It is possible that this trading
activity will affect the value of each Lunt Index and its respective
Fund.
LUNT
CAPITAL DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE LUNT
INDEXES OR ANY DATA INCLUDED THEREIN AND SHALL HAVE NO LIABILITY FOR ANY ERRORS,
OMISSIONS, OR INTERRUPTIONS THEREIN. LUNT CAPITAL MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE LICENSEES, OWNERS OF THE FUND, OR
ANY OTHER PERSON OR ENTITY FROM THE USE OF THE LUNT INDEXES OR ANY DATA INCLUDED
THEREIN. LUNT CAPITAL MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY
DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE WITH RESPECT TO THE LUNT INDEXES OR ANY DATA INCLUDED
THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL LUNT CAPITAL HAVE ANY
LIABIL1TY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL
DAMAGES OR LOSSES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH
DAMAGES.
Each
Lunt Index is the property of Lunt Capital Management, Inc., which has
contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices
LLC) to calculate and maintain the Lunt Indexes. The Lunt Indexes are not
sponsored by S&P Dow Jones Indices LLC or its affiliates or its third-party
licensors, including Standard & Poor’s Financial Services LLC and Dow Jones
Trademark Holdings LLC (collectively, “S&P Dow Jones Indices”). S&P Dow
Jones Indices will not be liable for any errors or omissions in calculating the
Lunt Indexes. “Calculated by S&P Dow Jones Indices” and the related stylized
mark(s) are service marks of S&P Dow Jones Indices and have been licensed/or
use by Lunt Capital Management, Inc. S&P® is a registered trademark of
Standard & Poor’s Financial Services LLC, and Dow Jones® is a registered
trademark of Dow Jones Trademark Holdings LLC. The Lunt ETFs based on each Lunt
Index are not sponsored, endorsed, sold or promoted by S&P Dow Jones
Indices. S&P Dow Jones Indices does not make any representation or warranty,
express or implied, to the owners of the Lunt ETFs or any member of the public
regarding the advisability of investing in securities generally or in the Lunt
ETFs particularly or the ability of each Index to track general market
performance. S&P Dow Jones Indices’ only relationship to Lunt Capital
Management, Inc. with respect to each Index is the licensing of the underlying
S&P Indices, certain trademarks, service marks and trade names of S&P
Dow Jones Indices, and the provision of the calculation services related to the
Lunt Indexes. S&P Dow Jones Indices is not responsible for and has not
participated in the determination of the prices and amount of the Lunt ETFs or
the timing of the issuance or sale of the Lunt ETFs or in the determination or
calculation of the equation by which each Fund may converted into cash or other
redemption mechanics. S&P Dow Jones Indices has no obligation or liability
in connection with the administration, marketing or trading of the Lunt ETFs.
S&P Dow Jones Indices LLC is not an investment advisor. Inclusion of a
security within a Lunt Index is not a recommendation by S&P Dow Jones
Indices to buy, sell, or hold such security, nor is it investment
advice.
The
Lunt ETFs are not sponsored, endorsed, sold or promoted by the Exchange, SPDJI,
or any of their respective affiliates or their third party licensors. None of
the Exchange, SPDJI or their third party licensors make any representation or
warranty, express or implied, to the owners of the Lunt ETFs or any member of
the public regarding the advisability of investing in securities generally or in
the Lunt ETFs particularly or the ability of the S&P Indices to track
general stock market performance. SPDJI and their third party licensor’s only
relationship to the Adviser is the licensing of certain trademarks, service
marks, and trade names of SPDJI and/or their third party licensors and for the
providing of calculation and maintenance services related to the Lunt Indexes.
None of the Exchange, SPDJI, or their third party licensors are responsible for
or have participated in the determination of the prices and amount of the Lunt
ETFs or the timing of the issuance or sale of the Lunt ETFs or in the
determination or calculation of the equation by which the Lunt ETFs are to be
converted into cash. Neither the Exchange nor SPDJI has any obligation or
liability in connection with the administration, marketing, or trading of the
Lunt ETFs. SPDJI and its subsidiaries are not investment advisers. Inclusion of
a security or futures contract within an index is not a recommendation by SPDJI
or its subsidiaries to buy, sell, or hold such security or futures contract, nor
is it considered to be investment advice.
NONE
OF THE EXCHANGE, SPDJI OR THEIR THIRD PARTY LICENSORS GUARANTEE THE ADEQUACY,
ACCURACY, TIMELINESS, OR COMPLETENESS OF THE S&P INDICES OR ANY DATA
INCLUDED THEREIN OR ANY COMMUNICATIONS, INCLUDING BUT NOT LIMITED TO, ORAL OR
WRITTEN COMMUNICATIONS (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT
THERETO. NONE OF THE EXCHANGE, SPDJI OR THEIR THIRD PARTY LICENSORS SHALL BE
SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS
THEREIN. THE EXCHANGE AND SPDJI ENTITIES MAKE NO EXPRESS OR IMPLIED WARRANTIES,
AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO THEIR MARKS, THE S&P INDICES, OR
ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT
WHATSOEVER SHALL THE EXCHANGE, SPDJI ENTITIES, OR THEIR THIRD PARTY LICENSORS BE
LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL
DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST
TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE.
FINANCIAL
HIGHLIGHTS
The
financial highlights tables are intended to help you understand each Fund’s
financial performance for the period of each Fund’s operations. AFTY is the
accounting successor to the Predecessor CSOP Fund as a result of the
reorganization of the Predecessor CSOP Fund into the Fund on January 22,
2020. AFTY has adopted the Financial Statements of the Predecessor CSOP
Fund. Consequently, financial information for periods prior to January 22,
2020 reflects the financial performance for the Predecessor CSOP Fund. FLRT is
the accounting successor to the Predecessor FLRT Fund as a result of the
reorganization of the Predecessor FLRT Fund into FLRT as of the close of
business on October 22, 2021. FLRT has adopted the Financial Statements of the
Predecessor FLRT Fund. In addition, FLRT is the accounting successor to
AdvisorShares Pacific Asset Enhanced Floating Rate ETF, a series of
AdvisorShares Trust, as a result of the reorganization of the series of
AdvisorShares Trust into the Predecessor FLRT Fund as of the close of business
on December 27, 2019. The financial information presented for FLRT for the
period from February 18, 2015, the inception date of the series of AdvisorShares
Trust, through December 27, 2019, the date on which Shares of the series of
AdvisorShares Trust converted to Shares of the Predecessor FLRT Fund, is that of
the series of AdvisorShares Trust.
Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned or
lost on an investment in the applicable Fund (assuming reinvestment of all
dividends and distributions). This information has been audited by Sanville
& Company, the Funds’ independent registered public accounting firm (except
that the information for AFTY for fiscal years ended prior to January 22, 2020
which were audited by the Predecessor CSOP Fund’s independent registered public
accounting firm and for FLRT for fiscal years ended prior to October 22, 2021
which were audited by the Predecessor FLRT Fund’s independent registered public
accounting firm), whose report, along with the Funds’ financial statements, is
included in the Funds’ Annual
Report,
which is available upon request. No financial information has been included for
Funds that were not in operation as of April 30, 2024.
PACER
TRENDPILOT®
US LARGE CAP ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS For a capital share outstanding throughout the
year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
|
|
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
|
|
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
|
|
| |
Net
Asset Value, Beginning of Period |
$ |
38.63 |
|
| $ |
37.54 |
|
| $ |
36.54 |
|
| $ |
26.99 |
|
| $ |
30.56 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
0.42 |
|
| 0.66 |
|
| 0.28 |
|
| 0.25 |
|
| 0.39 |
|
|
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
7.26 |
|
| 0.90 |
|
| 1.03 |
|
| 9.65 |
|
| (3.59) |
|
|
|
| |
Total
from Investment Operations |
7.68 |
|
| 1.56 |
|
| 1.31 |
|
| 9.90 |
|
| (3.20) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.51) |
|
| (0.47) |
|
| (0.31) |
|
| (0.35) |
|
| (0.37) |
|
|
|
| |
Total
Distributions |
(0.51) |
|
| (0.47) |
|
| (0.31) |
|
| (0.35) |
|
| (0.37) |
|
|
|
| |
Net
Asset Value, End of Period |
$ |
45.80 |
|
| $ |
38.63 |
|
| $ |
37.54 |
|
| $ |
36.54 |
|
| $ |
26.99 |
|
|
|
| |
Total
Return |
19.96 |
% |
| 4.20 |
% |
| 3.48 |
% |
| 36.86 |
% |
| -10.71 |
% |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
2,619,782 |
|
| $ |
2,039,609 |
|
| $ |
1,841,243 |
|
| $ |
1,894,772 |
|
| $ |
2,403,839 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
|
|
| |
Net
Investment Income (Loss) to Average Net Assets |
0.98 |
% |
| 1.75 |
% |
| 0.71 |
% |
| 0.83 |
% |
| 1.25 |
% |
|
|
| |
Portfolio
Turnover Rate(b) |
51 |
% |
| 1 |
% |
| 58 |
% |
| 6 |
% |
| 5 |
% |
|
|
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
PACER
TRENDPILOT®
US MID CAP ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
|
|
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
|
|
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
|
|
| |
Net
Asset Value, Beginning of Period |
$ |
32.25 |
|
| $ |
34.52 |
|
| $ |
35.63 |
|
| $ |
28.35 |
|
| $ |
30.95 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
0.56 |
|
| 0.39 |
|
| 0.00 |
|
(d) |
0.09 |
|
| 0.28 |
|
|
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
1.69 |
|
| (2.41) |
|
| (1.07) |
|
| 7.36 |
|
| (2.45) |
|
|
|
| |
Total
from Investment Operations |
2.25 |
|
| (2.02) |
|
| (1.07) |
|
| 7.45 |
|
| (2.17) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.63) |
|
| (0.25) |
|
| (0.04) |
|
| (0.17) |
|
| (0.43) |
|
|
|
| |
Total
Distributions |
(0.63) |
|
| (0.25) |
|
| (0.04) |
|
| (0.17) |
|
| (0.43) |
|
|
|
| |
Net
Asset Value, End of Period |
$ |
33.87 |
|
| $ |
32.25 |
|
| $ |
34.52 |
|
| $ |
35.63 |
|
| $ |
28.35 |
|
|
|
| |
Total
Return |
7.02 |
% |
| -5.81 |
% |
| -2.98 |
% |
| 26.34 |
% |
| -7.11 |
% |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
384,469 |
|
| $ |
390,252 |
|
| $ |
441,894 |
|
| $ |
452,474 |
|
| $ |
540,051 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
|
|
| |
Net
Investment Income (Loss) to Average Net Assets |
1.72 |
% |
| 1.19 |
% |
| 0.01 |
% |
| 0.30 |
% |
| 0.96 |
% |
|
|
| |
Portfolio
Turnover Rate(b) |
262 |
% |
| 441 |
% |
| 16 |
% |
| 304 |
% |
| 143 |
% |
|
|
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(d) |
Represents
less than $0.005. |
PACER
TRENDPILOT®
100 ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
|
|
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
|
|
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
|
|
| |
Net
Asset Value, Beginning of Period |
$ |
55.22 |
|
| $ |
52.18 |
|
| $ |
54.01 |
|
| $ |
37.91 |
|
| $ |
36.00 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
1.43 |
|
| 0.48 |
|
| (0.13) |
|
| 0.01 |
|
| 0.15 |
|
|
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
11.44 |
|
| 2.87 |
|
| (1.70) |
|
| 16.17 |
|
| 1.94 |
|
|
|
| |
Total
from Investment Operations |
12.87 |
|
| 3.35 |
|
| (1.83) |
|
| 16.18 |
|
| 2.09 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.96) |
|
| (0.31) |
|
| — |
|
| (0.08) |
|
| (0.18) |
|
|
|
| |
Total
Distributions |
(0.96) |
|
| (0.31) |
|
| — |
|
| (0.08) |
|
| (0.18) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
CAPITAL
SHARE TRANSACTIONS |
|
|
|
|
|
|
|
|
|
|
|
| |
Transaction
Fees |
— |
|
| — |
|
| — |
|
| 0.00 |
|
(d) |
— |
|
|
|
| |
Net
Asset Value, End of Period |
$ |
67.13 |
|
| $ |
55.22 |
|
| $ |
52.18 |
|
| $ |
54.01 |
|
| $ |
37.91 |
|
|
|
| |
Total
Return |
23.36 |
% |
| 6.47 |
% |
| -3.38 |
% |
| 42.69 |
% |
| 5.78 |
% |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
1,181,469 |
|
| $ |
750,925 |
|
| $ |
688,816 |
|
| $ |
783,124 |
|
| $ |
739,258 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.65 |
% |
| 0.65 |
% |
| 0.65 |
% |
| 0.65 |
% |
| 0.65 |
% |
|
|
| |
Net
Investment Income (Loss) to Average Net Assets |
2.24 |
% |
| 0.93 |
% |
| -0.22 |
% |
| 0.01 |
% |
| 0.40 |
% |
|
|
| |
Portfolio
Turnover Rate(b) |
20 |
% |
| 6 |
% |
| 7 |
% |
| 6 |
% |
| 61 |
% |
|
|
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(d) |
Represents
less than $0.005. |
PACER
TRENDPILOT®
EUROPEAN INDEX ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
|
|
|
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
|
|
|
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
|
|
|
| |
Net
Asset Value, Beginning of Period |
$ |
26.57 |
|
| $ |
22.40 |
|
| $ |
24.33 |
|
| $ |
23.76 |
|
| $ |
26.77 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
0.68 |
|
| 0.34 |
|
| 0.34 |
|
| 0.10 |
|
| 0.54 |
|
|
|
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
(0.71) |
|
| 3.99 |
|
| (1.89) |
|
| 0.47 |
|
| (2.61) |
|
|
|
|
| |
Total
from Investment Operations |
(0.03) |
|
| 4.33 |
|
| (1.55) |
|
| 0.57 |
|
| (2.07) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.68) |
|
| (0.16) |
|
| (0.38) |
|
| — |
|
| (0.94) |
|
|
|
|
| |
Total
Distributions |
(0.68) |
|
| (0.16) |
|
| (0.38) |
|
| — |
|
| (0.94) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
CAPITAL
SHARE TRANSACTIONS |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Transaction
Fees |
— |
|
| — |
|
| 0.00 |
|
(d) |
— |
|
| — |
|
|
|
|
| |
Net
Asset Value, End of Period |
$ |
25.86 |
|
| $ |
26.57 |
|
| $ |
22.40 |
|
| $ |
24.33 |
|
| $ |
23.76 |
|
|
|
|
| |
Total
Return |
-0.02 |
% |
| 19.43 |
% |
| -6.47 |
% |
| 2.38 |
% |
| -8.18 |
% |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
40,091 |
|
| $ |
43,843 |
|
| $ |
45,925 |
|
| $ |
54,741 |
|
| $ |
91,488 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.65 |
% |
| 0.65 |
% |
| 0.66 |
% |
| 0.65 |
% |
| 0.65 |
% |
|
|
|
| |
Net
Investment Income (Loss) to Average Net Assets |
2.68 |
% |
| 1.48 |
% |
| 1.39 |
% |
| 0.43 |
% |
| 2.04 |
% |
|
|
|
| |
Portfolio
Turnover Rate(b) |
111 |
% |
| 5 |
% |
| 7 |
% |
| 506 |
% |
| 12 |
% |
|
|
|
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(d) |
Represents
less than $0.005. |
PACER
TRENDPILOT®
INTERNATIONAL ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS For a capital share outstanding throughout the
year/period |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Period
Ended |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
|
April
30, 2020(a)(f) |
Net
Asset Value, Beginning of Period |
$ |
26.91 |
|
| $ |
24.40 |
|
| $ |
28.22 |
|
| $ |
23.42 |
|
| $ |
24.91 |
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(b) |
0.65 |
|
| 0.45 |
|
| 0.44 |
|
| 0.28 |
|
| 0.32 |
|
Net
Realized and Unrealized Gain (Loss) on Investments(d) |
1.18 |
|
| 2.16 |
|
| (3.57) |
|
| 4.72 |
|
| (1.55) |
|
Total
from Investment Operations |
1.83 |
|
| 2.61 |
|
| (3.13) |
|
| 5.00 |
|
| (1.23) |
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.58) |
|
| (0.10) |
|
| (0.69) |
|
| (0.20) |
|
| (0.26) |
|
Total
Distributions |
(0.58) |
|
| (0.10) |
|
| (0.69) |
|
| (0.20) |
|
| (0.26) |
|
|
|
|
|
|
|
|
|
| |
CAPITAL
SHARE TRANSACTIONS |
|
|
|
|
|
|
|
| |
Transaction
Fees |
0.00 |
|
(e) |
0.00 |
|
(e) |
0.00 |
|
(e) |
— |
|
| — |
|
Net
Asset Value, End of Period |
$ |
28.16 |
|
| $ |
26.91 |
|
| $ |
24.40 |
|
| $ |
28.22 |
|
| $ |
23.42 |
|
Total
Return |
6.85 |
% |
| 10.75 |
% |
| -11.46 |
% |
| 21.46 |
% |
| -5.08 |
% |
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
150,672 |
|
| $ |
125,141 |
|
| $ |
130,527 |
|
| $ |
131,228 |
|
| $ |
151,038 |
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.65 |
% |
| 0.65 |
% |
| 0.65 |
% |
| 0.65 |
% |
| 0.65 |
% |
Net
Investment Income (Loss) to Average Net Assets |
2.38 |
% |
| 1.82 |
% |
| 1.56 |
% |
| 1.15 |
% |
| 1.26 |
% |
Portfolio
Turnover Rate(c) |
58 |
% |
| 3 |
% |
| 202 |
% |
| 161 |
% |
| 39 |
% |
|
|
|
|
| |
(a) |
Commencement
of operations on May 02, 2019. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Excludes
the impact of in-kind transactions. |
(d) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(e) |
Represents
less than $0.005. |
(f) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
PACER
TRENDPILOT®
US BOND ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS For a capital share outstanding throughout the
year/period |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Period
Ended |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
|
April
30, 2020(a)(f) |
Net
Asset Value, Beginning of Period |
$ |
20.20 |
|
| $ |
23.33 |
|
| $ |
27.45 |
|
| $ |
25.77 |
|
| $ |
25.00 |
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(b) |
1.41 |
|
| 1.11 |
|
| 0.80 |
|
| 1.09 |
|
| 0.33 |
|
Net
Realized and Unrealized Gain (Loss) on Investments(d) |
(0.19) |
|
| (2.83) |
|
| (4.17) |
|
| 1.34 |
|
| 0.72 |
|
Total
from Investment Operations |
1.22 |
|
| (1.72) |
|
| (3.37) |
|
| 2.43 |
|
| 1.05 |
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(1.42) |
|
| (1.41) |
|
| (0.75) |
|
| (0.75) |
|
| (0.28) |
|
Total
Distributions |
(1.42) |
|
| (1.41) |
|
| (0.75) |
|
| (0.75) |
|
| (0.28) |
|
|
|
|
|
|
|
|
|
| |
CAPITAL
SHARE TRANSACTIONS |
|
|
|
|
|
|
|
| |
Transaction
Fees |
0.00 |
|
(e) |
— |
|
| — |
|
| 0.00 |
|
(e) |
— |
|
Net
Asset Value, End of Period |
$ |
20.00 |
|
| $ |
20.20 |
|
| $ |
23.33 |
|
| $ |
27.45 |
|
| $ |
25.77 |
|
Total
Return |
6.30 |
% |
| -7.30 |
% |
| -12.54 |
% |
| 9.53 |
% |
| 4.24 |
% |
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
178,021 |
|
| $ |
232,340 |
|
| $ |
949,550 |
|
| $ |
839,970 |
|
| $ |
144,327 |
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
Net
Investment Income (Loss) to Average Net Assets |
7.03 |
% |
| 5.26 |
% |
| 3.01 |
% |
| 4.04 |
% |
| 2.47 |
% |
Portfolio
Turnover Rate(c) |
131 |
% |
| 711 |
% |
| 652 |
% |
| 55 |
% |
| 131 |
% |
|
|
|
|
| |
(a) |
Commencement
of operations on October 22, 2019. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Excludes
the impact of in-kind transactions. |
(d) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(e) |
Represents
less than $0.005. |
(f) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
PACER
TRENDPILOT®
FUND OF FUNDS ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS For a capital share outstanding throughout the
year/period |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Period
Ended |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
|
April
30, 2020(a)(d) |
Net
Asset Value, Beginning of Period |
$ |
27.80 |
|
| $ |
27.81 |
|
| $ |
29.82 |
|
| $ |
23.81 |
|
| $ |
25.39 |
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(b)(c) |
0.77 |
|
| 0.48 |
|
| 0.35 |
|
| 0.22 |
|
| 0.26 |
|
Net
Realized and Unrealized Gain (Loss) on Investments(g) |
2.66 |
|
| (0.03) |
|
| (2.07) |
|
| 5.96 |
|
| (1.59) |
|
Total
from Investment Operations |
3.43 |
|
| 0.45 |
|
| (1.72) |
|
| 6.18 |
|
| (1.33) |
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.75) |
|
| (0.46) |
|
| (0.29) |
|
| (0.17) |
|
| (0.25) |
|
Total
Distributions |
(0.75) |
|
| (0.46) |
|
| (0.29) |
|
| (0.17) |
|
| (0.25) |
|
Net
Asset Value, End of Period |
$ |
30.48 |
|
| $ |
27.80 |
|
| $ |
27.81 |
|
| $ |
29.82 |
|
| $ |
23.81 |
|
Total
Return |
12.39 |
% |
| 1.71 |
% |
| -5.87 |
% |
| 26.02 |
% |
| -5.37 |
% |
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
50,294 |
|
| $ |
52,819 |
|
| $ |
63,968 |
|
| $ |
44,728 |
|
| $ |
27,378 |
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets(e) |
0.15 |
% |
| 0.15 |
% |
| 0.15 |
% |
| 0.15 |
% |
| 0.15 |
% |
Net
Investment Income (Loss) to Average Net Assets(e) |
2.61 |
% |
| 1.77 |
% |
| 1.16 |
% |
| 0.82 |
% |
| 1.03 |
% |
Portfolio
Turnover Rate(f) |
6 |
% |
| 6 |
% |
| 5 |
% |
| 29 |
% |
| 6 |
% |
|
|
|
|
| |
(a) |
Commencement
of operations on May 3, 2019. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Recognition
of net investment income by the Fund is affected by the timing of the
declaration of dividends by the underlying investment companies in which
the Fund invests. The ratio does not include the net investment income of
the underlying companies in which the Fund invests. |
(d) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(e) |
Does
not include expenses of the investment companies in which the Fund
invests. |
(f) |
Excludes
the impact of in-kind transactions. |
(g) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
PACER
US CASH COWS 100 ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
|
|
|
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
|
|
|
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
|
|
|
| |
Net
Asset Value, Beginning of Period |
$ |
46.73 |
|
| $ |
47.94 |
|
| $ |
41.95 |
|
| $ |
25.17 |
|
| $ |
29.72 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
1.10 |
|
| 1.08 |
|
| 0.84 |
|
| 0.71 |
|
| 0.77 |
|
|
|
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
8.02 |
|
| (1.32) |
|
| 5.87 |
|
| 16.76 |
|
| (4.55) |
|
|
|
|
| |
Total
from Investment Operations |
9.12 |
|
| (0.24) |
|
| 6.71 |
|
| 17.47 |
|
| (3.78) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(1.03) |
|
| (0.97) |
|
| (0.72) |
|
| (0.69) |
|
| (0.77) |
|
|
|
|
| |
Total
Distributions |
(1.03) |
|
| (0.97) |
|
| (0.72) |
|
| (0.69) |
|
| (0.77) |
|
|
|
|
| |
Net
Asset Value, End of Period |
$ |
54.82 |
|
| $ |
46.73 |
|
| $ |
47.94 |
|
| $ |
41.95 |
|
| $ |
25.17 |
|
|
|
|
| |
Total
Return |
19.70 |
% |
| -0.38 |
% |
| 16.08 |
% |
| 70.43 |
% |
| -12.63 |
% |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
22,641,886 |
|
| $ |
13,219,876 |
|
| $ |
4,554,750 |
|
| $ |
432,113 |
|
| $ |
190,027 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.49 |
% |
| 0.49 |
% |
| 0.49 |
% |
| 0.49 |
% |
| 0.49 |
% |
|
|
|
| |
Net
Investment Income (Loss) to Average Net Assets |
2.15 |
% |
| 2.30 |
% |
| 1.78 |
% |
| 2.23 |
% |
| 2.73 |
% |
|
|
|
| |
Portfolio
Turnover Rate(b) |
77 |
% |
| 90 |
% |
| 114 |
% |
| 104 |
% |
| 85 |
% |
|
|
|
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
PACER
US SMALL CAP CASH COWS 100 ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
|
|
|
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
|
|
|
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
|
|
|
| |
Net
Asset Value, Beginning of Period |
$ |
37.05 |
|
| $ |
38.06 |
|
| $ |
41.82 |
|
| $ |
20.76 |
|
| $ |
25.88 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
0.54 |
|
| 0.51 |
|
| 0.72 |
|
| 0.11 |
|
| 0.27 |
|
|
|
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
8.76 |
|
| (1.09) |
|
| (3.37) |
|
| 21.13 |
|
| (5.12) |
|
|
|
|
| |
Total
from Investment Operations |
9.30 |
|
| (0.58) |
|
| (2.65) |
|
| 21.24 |
|
| (4.85) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.52) |
|
| (0.43) |
|
| (0.67) |
|
| (0.14) |
|
| (0.27) |
|
|
|
|
| |
Distributions
from Return of Capital |
— |
|
| — |
|
| (0.44) |
|
| (0.04) |
|
| — |
|
|
|
|
| |
Total
Distributions |
(0.52) |
|
| (0.43) |
|
| (1.11) |
|
| (0.18) |
|
| (0.27) |
|
|
|
|
| |
Net
Asset Value, End of Period |
$ |
45.83 |
|
| $ |
37.05 |
|
| $ |
38.06 |
|
| $ |
41.82 |
|
| $ |
20.76 |
|
|
|
|
| |
Total
Return |
25.18 |
% |
| -1.46 |
% |
| -6.57 |
% |
| 102.70 |
% |
| -18.72 |
% |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
9,399,691 |
|
| $ |
2,035,764 |
|
| $ |
831,675 |
|
| $ |
271,840 |
|
| $ |
14,534 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.59 |
% |
| 0.59 |
% |
| 0.60 |
% |
| 0.59 |
% |
| 0.59 |
% |
|
|
|
| |
Net
Investment Income (Loss) to Average Net Assets |
1.20 |
% |
| 1.36 |
% |
| 1.70 |
% |
| 0.33 |
% |
| 1.11 |
% |
|
|
|
| |
Portfolio
Turnover Rate(b) |
108 |
% |
| 101 |
% |
| 133 |
% |
| 123 |
% |
| 128 |
% |
|
|
|
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
PACER
GLOBAL CASH COWS DIVIDEND ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
|
|
|
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
|
|
|
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
|
|
|
| |
Net
Asset Value, Beginning of Period |
$ |
34.15 |
|
| $ |
32.83 |
|
| $ |
31.10 |
|
| $ |
24.63 |
|
| $ |
31.19 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
1.75 |
|
| 1.94 |
|
| 1.39 |
|
| 1.17 |
|
| 1.32 |
|
|
|
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
0.27 |
|
| 0.65 |
|
| 1.69 |
|
| 6.51 |
|
| (6.60) |
|
|
|
|
| |
Total
from Investment Operations |
2.02 |
|
| 2.59 |
|
| 3.08 |
|
| 7.68 |
|
| (5.28) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(2.00) |
|
| (1.28) |
|
| (1.35) |
|
| (1.21) |
|
| (1.28) |
|
|
|
|
| |
Total
Distributions |
(2.00) |
|
| (1.28) |
|
| (1.35) |
|
| (1.21) |
|
| (1.28) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
CAPITAL
SHARE TRANSACTIONS |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Transaction
Fees |
0.00 |
|
(d) |
0.01 |
|
| 0.00 |
|
(d) |
— |
|
| — |
|
|
|
|
| |
Net
Asset Value, End of Period |
$ |
34.17 |
|
| $ |
34.15 |
|
| $ |
32.83 |
|
| $ |
31.10 |
|
| $ |
24.63 |
|
|
|
|
| |
Total
Return |
6.17 |
% |
| 8.50 |
% |
| 10.22 |
% |
| 32.05 |
% |
| -17.32 |
% |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
1,916,683 |
|
| $ |
1,579,560 |
|
| $ |
351,302 |
|
| $ |
135,269 |
|
| $ |
135,480 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
|
|
|
| |
Net
Investment Income (Loss) to Average Net Assets |
5.21 |
% |
| 6.07 |
% |
| 4.32 |
% |
| 4.32 |
% |
| 4.52 |
% |
|
|
|
| |
Portfolio
Turnover Rate(b) |
65 |
% |
| 47 |
% |
| 39 |
% |
| 76 |
% |
| 91 |
% |
|
|
|
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(d) |
Represents
less than $0.005. |
PACER
DEVELOPED MARKETS INTERNATIONAL CASH COWS 100 ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
|
|
|
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
|
|
|
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
|
|
|
| |
Net
Asset Value, Beginning of Period |
$ |
29.82 |
|
| $ |
29.69 |
|
| $ |
31.95 |
|
| $ |
20.99 |
|
| $ |
27.08 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
1.19 |
|
| 1.52 |
|
| 1.03 |
|
| 0.66 |
|
| 0.74 |
|
|
|
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
1.72 |
|
| (0.18) |
|
| (2.43) |
|
| 10.98 |
|
| (6.05) |
|
|
|
|
| |
Total
from Investment Operations |
2.91 |
|
| 1.34 |
|
| (1.40) |
|
| 11.64 |
|
| (5.31) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(1.16) |
|
| (1.23) |
|
| (0.87) |
|
| (0.68) |
|
| (0.78) |
|
|
|
|
| |
Total
Distributions |
(1.16) |
|
| (1.23) |
|
| (0.87) |
|
| (0.68) |
|
| (0.78) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
CAPITAL
SHARE TRANSACTIONS |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Transaction
Fees |
0.01 |
|
| 0.02 |
|
| 0.01 |
|
| 0.00 |
|
(d) |
— |
|
|
|
|
| |
Net
Asset Value, End of Period |
$ |
31.58 |
|
| $ |
29.82 |
|
| $ |
29.69 |
|
| $ |
31.95 |
|
| $ |
20.99 |
|
|
|
|
| |
Total
Return |
10.00% |
| 5.26% |
| -4.48% |
| 56.41% |
| -20.04% |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
1,405,198 |
|
| $ |
554,584 |
|
| $ |
111,346 |
|
| $ |
20,769 |
|
| $ |
20,991 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.65 |
% |
| 0.65 |
% |
| 0.65 |
% |
| 0.65 |
% |
| 0.65 |
% |
|
|
|
| |
Net
Investment Income (Loss) to Average Net Assets |
3.89 |
% |
| 5.43 |
% |
| 3.28 |
% |
| 2.52 |
% |
| 2.96 |
% |
|
|
|
| |
Portfolio
Turnover Rate(b) |
67 |
% |
| 59 |
% |
| 71 |
% |
| 83 |
% |
| 149 |
% |
|
|
|
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(d) |
Represents
less than $0.005. |
PACER
EMERGING MARKETS CASH COWS 100 ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS For a capital share outstanding throughout the
year/period |
|
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
|
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Period
Ended |
|
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
|
April
30, 2020(a)(c) |
|
Net
Asset Value, Beginning of Period |
$ |
19.32 |
|
| $ |
22.14 |
|
| $ |
25.94 |
|
| $ |
19.11 |
|
| $ |
24.95 |
| |
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(b) |
1.03 |
|
| 1.12 |
|
| 1.36 |
|
| 0.72 |
|
| 1.05 |
| |
Net
Realized and Unrealized Gain (Loss) on Investments(e) |
1.15 |
|
| (2.70) |
|
| (4.03) |
|
| 6.91 |
|
| (4.81) |
| |
Total
from Investment Operations |
2.18 |
|
| (1.58) |
|
| (2.67) |
|
| 7.63 |
|
| (3.76) |
| |
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(1.07) |
|
| (1.30) |
|
| (1.14) |
|
| (0.85) |
|
| (2.08) |
| |
Total
Distributions |
(1.07) |
|
| (1.30) |
|
| (1.14) |
|
| (0.85) |
|
| (2.08) |
| |
|
|
|
|
|
|
|
|
|
| |
CAPITAL
SHARE TRANSACTIONS |
|
|
|
|
|
|
|
|
| |
Transaction
Fees |
0.01 |
|
| 0.06 |
|
| 0.01 |
|
| 0.05 |
|
| 0.00 |
|
(f) |
Net
Asset Value, End of Period |
$ |
20.44 |
|
| $ |
19.32 |
|
| $ |
22.14 |
|
| $ |
25.94 |
|
| $ |
19.11 |
| |
Total
Return |
11.79 |
% |
| -6.43 |
% |
| -10.67 |
% |
| 41.19 |
% |
| -16.76 |
% |
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
97,086 |
|
| $ |
55,051 |
|
| $ |
11,070 |
|
| $ |
3,891 |
|
| $ |
956 |
| |
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.70 |
% |
| 0.70 |
% |
| 0.71 |
% |
| 0.70 |
% |
| 0.70 |
% |
|
Net
Investment Income (Loss) to Average Net Assets |
5.28 |
% |
| 5.93 |
% |
| 5.50 |
% |
| 3.12 |
% |
| 4.43 |
% |
|
Portfolio
Turnover Rate(d) |
73 |
% |
| 66 |
% |
| 97 |
% |
| 109 |
% |
| 144 |
% |
|
|
|
|
|
| |
(a) |
Commencement
of operations on May 02, 2019. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(d) |
Excludes
the impact of in-kind transactions. |
(e) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(f) |
Represents
less than $0.005. |
PACER
US LARGE CAP CASH COWS GROWTH LEADERS ETF
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year/period |
| For
the |
| For
the |
| Year
Ended |
| Period
Ended |
| April
30, 2024 |
|
April
30, 2023(a)(c) |
Net
Asset Value, Beginning of Period |
$ |
20.07 |
|
| $ |
20.36 |
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
| |
Net
Investment Income (Loss)(b) |
0.12 |
|
| 0.03 |
|
Net
Realized and Unrealized Gain (Loss) on Investments(e) |
4.48 |
|
| (0.30) |
|
Total
from Investment Operations |
4.60 |
|
| (0.27) |
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
| |
Distributions
from Net Investment Income |
(0.11) |
|
| (0.02) |
|
Total
Distributions |
(0.11) |
|
| (0.02) |
|
Net
Asset Value, End of Period |
$ |
24.56 |
|
| $ |
20.07 |
|
Total
Return |
22.96 |
% |
| -1.30 |
% |
|
|
| |
SUPPLEMENTAL
DATA: |
|
| |
Net
Assets at End of Period (000’s) |
$ |
120,342 |
|
| $ |
19,571 |
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
| |
Expenses
to Average Net Assets |
0.49 |
% |
| 0.49 |
% |
Net
Investment Income (Loss) to Average Net Assets |
0.53 |
% |
| 0.44 |
% |
Portfolio
Turnover Rate(d) |
111 |
% |
| 30 |
% |
|
|
|
|
| |
(a) |
Commencement
of operations on December 21, 2022. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(d) |
Excludes
the impact of in-kind transactions. |
(e) |
Net
realized and unrealized gain (loss) per share in this caption are
balancing amounts necessary to reconcile the change in net asset value per
share for the period, and may not reconcile with the aggregate gain (loss)
in the Statement of Operations due to share transactions for the
period. |
PACER
US SMALL CAP CASH COWS GROWTH LEADERS ETF
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year/period |
| For
the |
| Year
Ended |
|
April
30,
2024(a)(c) |
Net
Asset Value, Beginning of Period |
$ |
20.18 |
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
Net
Investment Income (Loss)(b) |
0.13 |
|
Net
Realized and Unrealized Gain (Loss) on Investments(e) |
2.75 |
|
Total
from Investment Operations |
2.88 |
|
| |
LESS
DISTRIBUTIONS: |
|
Distributions
from Net Investment Income |
(0.13) |
|
Distributions
from Return of capital(f) |
0.00 |
|
Total
Distributions |
(0.13) |
|
| |
| |
CAPITAL
SHARE TRANSACTIONS |
|
Transaction
Fees |
— |
|
Net
Asset Value, End of Period |
$ |
22.93 |
|
Total
Return |
14.26 |
% |
| |
SUPPLEMENTAL
DATA: |
|
Net
Assets at End of Period (000’s) |
$ |
9,170 |
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
Expenses
to Average Net Assets |
0.59 |
% |
Net
Investment Income (Loss) to Average Net Assets |
0.59 |
% |
Portfolio
Turnover Rate(d) |
152 |
% |
|
|
|
|
| |
(a) |
Commencement
of operations on May 1, 2023 |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(d) |
Excludes
the impact of in-kind transactions. |
(e) |
Net
realized and unrealized gain (loss) per share in this caption are
balancing amounts necessary to reconcile the change in net asset value per
share for the period, and may not reconcile with the aggregate gain (loss)
in the Statement of Operations due to share transactions for the
period. |
(f) |
Less
than $0.005 |
PACER
US CASH COWS GROWTH ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS For a capital share outstanding throughout the
year/period |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Period
Ended |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
|
April
30, 2020(a)(c) |
Net
Asset Value, Beginning of Period |
$ |
35.00 |
|
| $ |
35.44 |
|
| $ |
36.21 |
|
| $ |
22.89 |
|
| $ |
24.78 |
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(b) |
0.56 |
|
| 0.60 |
|
| 0.04 |
|
| 0.14 |
|
| 0.28 |
|
Net
Realized and Unrealized Gain (Loss) on Investments(e) |
5.43 |
|
| (0.65) |
|
| (0.75) |
|
| 13.37 |
|
| (1.90) |
|
Total
from Investment Operations |
5.99 |
|
| (0.05) |
|
| (0.71) |
|
| 13.51 |
|
| (1.62) |
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.62) |
|
| (0.39) |
|
| (0.04) |
|
| (0.19) |
|
| (0.27) |
|
Distributions
from Return of Capital |
(0.01) |
|
| — |
|
| (0.02) |
|
| — |
|
| — |
|
Total
Distributions |
(0.63) |
|
| (0.39) |
|
| (0.06) |
|
| (0.19) |
|
| (0.27) |
|
Net
Asset Value, End of Period |
$ |
40.36 |
|
| $ |
35.00 |
|
| $ |
35.44 |
|
| $ |
36.21 |
|
| $ |
22.89 |
|
Total
Return |
17.34 |
% |
| -0.07 |
% |
| -1.98 |
% |
| 59.29 |
% |
| -6.52 |
% |
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
46,412 |
|
| $ |
38,500 |
|
| $ |
8,859 |
|
| $ |
3,621 |
|
| $ |
1,144 |
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
Net
Investment Income (Loss) to Average Net Assets |
1.52 |
% |
| 1.69 |
% |
| 0.10 |
% |
| 0.43 |
% |
| 1.16 |
% |
Portfolio
Turnover Rate(d) |
123 |
% |
| 182 |
% |
| 76 |
% |
| 170 |
% |
| 166 |
% |
|
|
|
|
| |
(a) |
Commencement
of operations on May 2, 2019. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(d) |
Excludes
the impact of in-kind transactions. |
(e) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
PACER
CASH COWS FUND OF FUNDS ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS For a capital share outstanding throughout the
year/period |
|
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
|
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Period
Ended |
|
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
|
April
30, 2020(a)(d) |
|
Net
Asset Value, Beginning of Period |
$ |
33.53 |
|
| $ |
33.44 |
|
| $ |
33.44 |
|
| $ |
20.83 |
|
| $ |
25.31 |
| |
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(b)(c) |
0.94 |
|
| 0.76 |
|
| 0.79 |
|
| 0.55 |
|
| 0.53 |
| |
Net
Realized and Unrealized Gain (Loss) on Investments(g) |
4.13 |
|
| 0.11 |
|
| — |
|
| 12.56 |
|
| (4.46) |
| |
Total
from Investment Operations |
5.07 |
|
| 0.87 |
|
| 0.79 |
|
| 13.11 |
|
| (3.93) |
| |
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.99) |
|
| (0.78) |
|
| (0.79) |
|
| (0.50) |
|
| (0.55) |
| |
Distributions
from Capital Gains |
(0.00) |
|
(h) |
(0.00) |
|
(h) |
— |
|
| — |
|
| — |
| |
Distributions
from Return of Capital |
(0.00) |
|
(h) |
(0.00) |
|
(h) |
— |
|
| — |
|
| (0.00) |
|
(h) |
Total
Distributions |
(0.99) |
|
| (0.78) |
|
| (0.79) |
|
| (0.50) |
|
| (0.55) |
| |
Net
Asset Value, End of Period |
$ |
37.61 |
|
| $ |
33.53 |
|
| $ |
33.44 |
|
| $ |
33.44 |
|
| $ |
20.83 |
| |
Total
Return |
15.38 |
% |
| 2.81 |
% |
| 2.29 |
% |
| 63.73 |
% |
| -15.71 |
% |
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
94,037 |
|
| $ |
48,618 |
|
| $ |
8,361 |
|
| $ |
1,672 |
|
| $ |
1,041 |
| |
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets(e) |
0.15 |
% |
| 0.15 |
% |
| 0.16 |
% |
| 0.15 |
% |
| 0.15 |
% |
|
Net
Investment Income (Loss) to Average Net Assets(e) |
2.64 |
% |
| 2.33 |
% |
| 2.27 |
% |
| 2.09 |
% |
| 2.27 |
% |
|
Portfolio
Turnover Rate(f) |
4 |
% |
| 8 |
% |
| 26 |
% |
| 9 |
% |
| 2 |
% |
|
|
|
|
|
| |
(a) |
Commencement
of operations on May 03, 2019. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Recognition
of net investment income by the Fund is affected by the timing of the
declaration of dividends by the underlying investment companies in which
the Fund invests. The ratio does not include the net investment income of
the underlying companies in which the Fund invests. |
(d) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(e) |
Does
not include expenses of the investment companies in which the Fund
invests. |
(f) |
Excludes
the impact of in-kind transactions. |
(g) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(h) |
Less
than $0.005. |
PACER
US EXPORT LEADERS ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS For a capital share outstanding throughout the
year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
| |
Net
Asset Value, Beginning of Period |
$ |
39.95 |
|
| $ |
38.27 |
|
| $ |
40.41 |
|
| $ |
25.15 |
|
| $ |
25.97 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
0.21 |
|
| 0.25 |
|
| 0.12 |
|
| 0.14 |
|
| 0.16 |
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
7.12 |
|
| 1.67 |
|
| (2.13) |
|
| 15.27 |
|
| (0.82) |
|
| |
Total
from Investment Operations |
7.33 |
|
| 1.92 |
|
| (2.01) |
|
| 15.41 |
|
| (0.66) |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.21) |
|
| (0.24) |
|
| (0.12) |
|
| (0.15) |
|
| (0.16) |
|
| |
Distribution
from Return of Capital |
— |
|
| — |
|
| (0.01) |
|
| — |
|
| — |
|
| |
Total
Distributions |
(0.21) |
|
| (0.24) |
|
| (0.13) |
|
| (0.15) |
|
| (0.16) |
|
| |
Net
Asset Value, End of Period |
$ |
47.07 |
|
| $ |
39.95 |
|
| $ |
38.27 |
|
| $ |
40.41 |
|
| $ |
25.15 |
|
| |
Total
Return |
18.40 |
% |
| 5.06 |
% |
| -5.00 |
% |
| 61.47 |
% |
| -2.53 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
61,194 |
|
| $ |
19,976 |
|
| $ |
3,827 |
|
| $ |
2,021 |
|
| $ |
1,257 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.61 |
% |
| 0.60 |
% |
| 0.60 |
% |
| |
Net
Investment Income (Loss) to Average Net Assets |
0.47 |
% |
| 0.64 |
% |
| 0.29 |
% |
| 0.43 |
% |
| 0.61 |
% |
| |
Portfolio
Turnover Rate(b) |
75 |
% |
| 74 |
% |
| 79 |
% |
| 111 |
% |
| 79 |
% |
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
PACER
CSOP FTSE CHINA A50 ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS For a capital share outstanding throughout the
year |
| For
the Year Ended April 30, 2024 |
| For
the Year Ended April 30, 2023 |
| For
the Year Ended April 30, 2022 |
| For
the Year Ended April 30, 2021 |
|
For
the Period Ended April 30, 2020(a)(c) |
| For
the Year Ended September 30, 2019 |
|
| |
Net
Asset Value, Beginning of Period |
$ |
16.06 |
|
| $ |
17.39 |
|
| $ |
22.74 |
|
| $ |
16.18 |
|
| $ |
16.85 |
|
| $ |
15.30 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(b) |
0.34 |
|
| 0.33 |
|
| 0.31 |
|
| 0.36 |
|
| (0.07) |
|
| 0.31 |
|
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(e) |
(1.57) |
|
| (1.33) |
|
| (5.33) |
|
| 6.54 |
|
| 0.15 |
|
| 1.48 |
|
|
| |
Total
from Investment Operations |
(1.23) |
|
| (1.00) |
|
| (5.02) |
|
| 6.90 |
|
| 0.08 |
|
| 1.79 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.30) |
|
| (0.33) |
|
| (0.37) |
|
| (0.33) |
|
| (0.71) |
|
| (0.24) |
|
|
| |
Distributions
from Return of Capital |
— |
|
| — |
|
| (0.01) |
|
| (0.01) |
|
| (0.04) |
|
| — |
|
|
| |
Total
Distributions |
(0.30) |
|
| (0.33) |
|
| (0.38) |
|
| (0.34) |
|
| (0.75) |
|
| (0.24) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
CAPITAL
SHARE TRANSACTIONS |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Transaction
Fees |
— |
|
| 0.00 |
|
(f) |
0.05 |
|
| 0.00 |
|
(f) |
— |
|
| — |
|
|
| |
Net
Asset Value, End of Period |
$ |
14.53 |
|
| $ |
16.06 |
|
| $ |
17.39 |
|
| $ |
22.74 |
|
| $ |
16.18 |
|
| $ |
16.85 |
|
|
| |
Total
Return |
-7.50 |
% |
| -5.68 |
% |
| -22.15 |
% |
| 42.73 |
% |
| 0.14 |
% |
| 12.05 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
4,444 |
|
| $ |
4,914 |
|
| $ |
6,188 |
|
| $ |
10,367 |
|
| $ |
8,992 |
|
| $ |
12,740 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.70 |
% |
| 0.70 |
% |
| 0.71 |
% |
| 0.70 |
% |
| 0.70 |
% |
| 0.70 |
% |
|
| |
Net
Investment Income (Loss) to Average Net Assets |
2.33 |
% |
| 2.03 |
% |
| 1.49 |
% |
| 1.73 |
% |
| -0.66 |
% |
| 1.97% |
|
| |
Portfolio
Turnover Rate(d) |
12 |
% |
| 13 |
% |
| 59 |
% |
| 32 |
% |
| 193 |
% |
| 45 |
% |
|
| |
|
|
|
|
| |
(a) |
For
the period October 1, 2019 to April 30, 2020. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(d) |
Excludes
the impact of in-kind transactions. |
(e) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(f) |
Represents
less than $0.005. |
PACER
INDUSTRIAL REAL ESTATE ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
|
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
|
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
|
| |
Net
Asset Value, Beginning of Period |
$ |
40.73 |
|
| $ |
47.82 |
|
| $ |
42.12 |
|
| $ |
30.09 |
|
| $ |
29.42 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
1.18 |
|
| 0.90 |
|
| 0.78 |
|
| 0.63 |
|
| 0.77 |
|
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
(4.94) |
|
| (6.99) |
|
| 5.48 |
|
| 12.08 |
|
| 0.52 |
|
|
| |
Total
from Investment Operations |
(3.76) |
|
| (6.09) |
|
| 6.26 |
|
| 12.71 |
|
| 1.29 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(1.56) |
|
| (1.00) |
|
| (0.57) |
|
| (0.58) |
|
| (0.61) |
|
|
| |
Distributions
from Capital Gains |
— |
|
| — |
|
| — |
|
| — |
|
| (0.00) |
(d) |
| |
Distributions
from Return of Capital |
— |
|
| — |
|
| — |
|
| (0.10) |
|
| — |
|
|
| |
Total
Distributions |
(1.56) |
|
| (1.00) |
|
| (0.57) |
|
| (0.68) |
|
| (0.61) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
CAPITAL
SHARE TRANSACTIONS |
|
|
|
|
|
|
|
|
|
|
| |
Transaction
Fees |
— |
|
| — |
|
| 0.01 |
|
| 0.00 |
|
(d) |
— |
|
|
| |
Net
Asset Value, End of Period |
$ |
35.41 |
|
| $ |
40.73 |
|
| $ |
47.82 |
|
| $ |
42.12 |
|
| $ |
30.09 |
|
|
| |
Total
Return |
-9.31 |
% |
| -12.56 |
% |
| 14.88 |
% |
| 42.70 |
% |
| 4.38 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
194,769 |
|
| $ |
219,932 |
|
| $ |
384,990 |
|
| $ |
200,086 |
|
| $ |
48,147 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.61 |
% |
| 0.60 |
% |
| 0.60 |
% |
|
| |
Expenses
to Average Net Assets (Waived) |
0.55 |
% |
| 0.58 |
% |
| N/A |
| N/A |
| N/A |
|
| |
Net
Investment Income (Loss) to Average Net Assets |
3.07 |
% |
| 2.25 |
% |
| 1.60 |
% |
| 1.75 |
% |
| 2.40 |
% |
|
| |
Net
Investment Income (Loss) to Average Net Assets (Waived) |
3.12 |
% |
| 2.23 |
% |
| N/A |
| N/A |
| N/A |
|
| |
Portfolio
Turnover Rate(b) |
19 |
% |
| 92 |
% |
| 43 |
% |
| 13 |
% |
| 29 |
% |
|
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(d) |
Represents
less than $0.005. |
PACER
DATA & INFRASTRUCTURE REAL ESTATE ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
| |
Net
Asset Value, Beginning of Year/Period |
$ |
29.68 |
|
| $ |
37.50 |
|
| $ |
38.48 |
|
| $ |
33.27 |
|
| $ |
28.36 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
0.71 |
|
| 0.77 |
|
| 0.32 |
|
| 0.36 |
|
| 0.54 |
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
(2.98) |
|
| (7.92) |
|
| (0.91) |
|
| 5.39 |
|
| 4.92 |
|
| |
Total
from Investment Operations |
(2.27) |
|
| (7.15) |
|
| (0.59) |
|
| 5.75 |
|
| 5.46 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(1.09) |
|
| (0.61) |
|
| (0.33) |
|
| (0.37) |
|
| (0.49) |
|
| |
Distributions
from Capital Gains |
— |
|
| (0.06) |
|
| (0.06) |
|
| — |
|
| — |
|
| |
Distributions
from Return of Capital |
— |
|
| — |
|
| — |
|
| (0.17) |
|
| (0.06) |
|
| |
Total
Distributions |
(1.09) |
|
| (0.67) |
|
| (0.39) |
|
| (0.54) |
|
| (0.55) |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
CAPITAL
SHARE TRANSACTIONS: |
|
|
|
|
|
|
|
|
|
| |
Transaction
Fees |
0.00 |
|
(d) |
0.00 |
|
(d) |
— |
|
| — |
|
| — |
|
| |
Net
Asset Value, End of Period |
$ |
26.32 |
|
| $ |
29.68 |
|
| $ |
37.50 |
|
| $ |
38.48 |
|
| $ |
33.27 |
|
| |
Total
Return |
-7.74 |
% |
| -19.11 |
% |
| -1.63 |
% |
| 17.46 |
% |
| 19.50 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
421,162 |
|
| $ |
700,548 |
|
| $ |
1,299,321 |
|
| $ |
1,119,810 |
|
| $ |
552,214 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.62 |
% |
| 0.60 |
% |
| 0.60 |
% |
| |
Expenses
to Average Net Assets After Advisory Fees (Waived) |
0.55 |
% |
| 0.58 |
% |
| N/A |
| N/A |
| N/A |
| |
Net
Investment Income (Loss) to Average Net Assets |
2.52 |
% |
| 2.43 |
% |
| 0.81 |
% |
| 1.02 |
% |
| 1.70 |
% |
| |
Net
Investment Income (Loss) to Average Net Assets After Advisory Fees
(Waived) |
2.57 |
% |
| 2.41 |
% |
| N/A |
| N/A |
| N/A |
| |
Portfolio
Turnover Rate(b) |
68 |
% |
| 51 |
% |
| 23 |
% |
| 30 |
% |
| 28 |
% |
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(d) |
Represents
less than $0.005. |
PACER
WEALTHSHIELD ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
|
|
|
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
|
|
|
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
|
|
|
| |
Net
Asset Value, Beginning of Period |
$ |
27.16 |
|
| $ |
30.16 |
|
| $ |
32.10 |
|
| $ |
23.92 |
|
| $ |
25.02 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
0.39 |
|
| 0.64 |
|
| 0.26 |
|
| 0.14 |
|
| 0.33 |
|
|
|
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
0.71 |
|
| (3.07) |
|
| (1.94) |
|
| 8.20 |
|
| (1.10) |
|
|
|
|
| |
Total
from Investment Operations |
1.10 |
|
| (2.43) |
|
| (1.68) |
|
| 8.34 |
|
| (0.77) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.48) |
|
| (0.57) |
|
| (0.26) |
|
| (0.16) |
|
| (0.33) |
|
|
|
|
| |
Total
Distributions |
(0.48) |
|
| (0.57) |
|
| (0.26) |
|
| (0.16) |
|
| (0.33) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
CAPITAL
SHARE TRANSACTIONS |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Transaction
Fees |
— |
|
| — |
|
| 0.00 |
|
(d) |
— |
|
| — |
|
|
|
|
| |
Net
Asset Value, End of Period |
$ |
27.78 |
|
| $ |
27.16 |
|
| $ |
30.16 |
|
| $ |
32.10 |
|
| $ |
23.92 |
|
|
|
|
| |
Total
Return |
4.06 |
% |
| -8.09 |
% |
| -5.30 |
% |
| 35.00 |
% |
| -3.04 |
% |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
19,446 |
|
| $ |
24,446 |
|
| $ |
33,172 |
|
| $ |
48,143 |
|
| $ |
51,428 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.61 |
% |
| 0.60 |
% |
| 0.60 |
% |
|
|
|
| |
Net
Investment Income (Loss) to Average Net Assets |
1.42 |
% |
| 2.19 |
% |
| 0.79 |
% |
| 0.53 |
% |
| 1.38 |
% |
|
|
|
| |
Portfolio
Turnover Rate(b) |
315 |
% |
| 669 |
% |
| 448 |
% |
| 227 |
% |
| 676 |
% |
|
|
|
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(d) |
Represents
less than $0.005. |
PACER
CFRA-STOVALL EQUAL WEIGHT SEASONAL ROTATION ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
| |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
| April
30, 2021 |
| April
30, 2020 |
| |
Net
Asset Value, Beginning of Period |
$ |
36.60 |
|
| $ |
34.95 |
|
| $ |
37.16 |
|
| $ |
25.23 |
|
| $ |
28.16 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(a) |
0.41 |
|
| 0.40 |
|
| 0.34 |
|
| 0.26 |
|
| 0.50 |
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(d) |
0.70 |
|
| 1.65 |
|
| (2.21) |
|
| 11.95 |
|
| (3.00) |
|
| |
Total
from Investment Operations |
1.11 |
|
| 2.05 |
|
| (1.87) |
|
| 12.21 |
|
| (2.50) |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.43) |
|
| (0.40) |
|
| (0.34) |
|
| (0.28) |
|
| (0.43) |
|
| |
Total
Distributions |
(0.43) |
|
| (0.40) |
|
| (0.34) |
|
| (0.28) |
|
| (0.43) |
|
| |
Net
Asset Value, End of Period |
$ |
37.28 |
|
| $ |
36.60 |
|
| $ |
34.95 |
|
| $ |
37.16 |
|
| $ |
25.23 |
|
| |
Total
Return(c) |
3.13 |
% |
| 5.95 |
% |
| -5.11 |
% |
| 48.66 |
% |
| -8.80 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
39,140 |
|
| $ |
78,680 |
|
| $ |
80,388 |
|
| $ |
66,883 |
|
| $ |
60,554 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| |
Net
Investment Income (Loss) to Average Net Assets |
1.16 |
% |
| 1.16 |
% |
| 0.89 |
% |
| 0.89 |
% |
| 1.75 |
% |
| |
Portfolio
Turnover Rate(b) |
185 |
% |
| 227 |
% |
| 225 |
% |
| 217 |
% |
| 225 |
% |
| |
|
|
|
|
| |
(a) |
Calculated
based on average shares outstanding during the period. |
(b) |
Excludes
the impact of in-kind transactions. |
(c) |
Total
Return was calculated using the traded NAV due to the rebalancing of the
portfolio at April 30, 2022. |
(d) |
Realized
and unrealized gains and losses per share in this caption are balancing
amounts necessary to reconcile the change in net asset value per share for
the period, and may not reconcile with the aggregate gains and losses in
the Statement of Operations due to share transactions for the
period. |
PACER
BIOTHREAT STRATEGY ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year/period |
|
| For
the |
| For
the |
| For
the |
| For
the |
|
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Period
Ended |
|
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
|
April
30,
2021(a)(c) |
|
Net
Asset Value, Beginning of Period |
$ |
29.37 |
|
| $ |
28.51 |
|
| $ |
30.05 |
|
| $ |
24.51 |
| |
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(b) |
0.32 |
|
| 0.30 |
|
| 0.22 |
|
| 0.16 |
| |
Net
Realized and Unrealized Gain (Loss) on Investments(e) |
5.09 |
|
| 0.86 |
|
| (1.52) |
|
| 5.53 |
| |
Total
from Investment Operations |
5.41 |
|
| 1.16 |
|
| (1.30) |
|
| 5.69 |
| |
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.33) |
|
| (0.30) |
|
| (0.24) |
|
| (0.15) |
| |
Distributions
from Return of Capital |
— |
|
| — |
|
| — |
|
| (0.00) |
(f) |
Total
Distributions |
(0.33) |
|
| (0.30) |
|
| (0.24) |
|
| (0.15) |
| |
Net
Asset Value, End of Period |
$ |
34.45 |
|
| $ |
29.37 |
|
| $ |
28.51 |
|
| $ |
30.05 |
| |
Total
Return |
18.52 |
% |
| 4.13 |
% |
| -4.41 |
% |
| 23.23 |
% |
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
3,445 |
|
| $ |
3,671 |
|
| $ |
5,702 |
|
| $ |
4,507 |
| |
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.70 |
% |
| 0.70 |
% |
| 0.71 |
% |
| 0.70 |
% |
|
Net
Investment Income (Loss) to Average Net Assets |
0.99 |
% |
| 1.07 |
% |
| 0.69 |
% |
| 0.65 |
% |
|
Portfolio
Turnover Rate(d) |
13 |
% |
| 10 |
% |
| 17 |
% |
| 5 |
% |
|
|
|
|
|
| |
(a) |
Commencement
of operations on June 24, 2020. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(d) |
Excludes
the impact of in-kind transactions. |
(e) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
PACER
LUNT LARGE CAP ALTERNATOR ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year/period |
| For
the |
| For
the |
| For
the |
| For
the |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Period
Ended |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
|
April
30,
2021(a)(c) |
Net
Asset Value, Beginning of Period |
$ |
36.46 |
|
| $ |
43.15 |
|
| $ |
40.74 |
|
| $ |
23.58 |
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
| |
Net
Investment Income (Loss)(b) |
0.42 |
|
| 0.44 |
|
| 0.48 |
|
| 0.41 |
|
Net
Realized and Unrealized Gain (Loss) on Investments(e) |
(2.47) |
|
| (6.67) |
|
| 2.36 |
|
| 17.16 |
|
Total
from Investment Operations |
(2.05) |
|
| (6.23) |
|
| 2.84 |
|
| 17.57 |
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.42) |
|
| (0.44) |
|
| (0.43) |
|
| (0.41) |
|
Distributions
from Return of Capital |
— |
|
| (0.02) |
|
| — |
|
| — |
|
Total
Distributions |
(0.42) |
|
| (0.46) |
|
| (0.43) |
|
| (0.41) |
|
Net
Asset Value, End of Period |
$ |
33.99 |
|
| $ |
36.46 |
|
| $ |
43.15 |
|
| $ |
40.74 |
|
Total
Return |
-5.65 |
% |
| -14.49 |
% |
| 6.97 |
% |
| 74.99 |
% |
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
256,630 |
|
| $ |
776,680 |
|
| $ |
554,454 |
|
| $ |
130,353 |
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
Net
Investment Income (Loss) to Average Net Assets |
1.19 |
% |
| 1.11 |
% |
| 1.09 |
% |
| 1.59 |
% |
Portfolio
Turnover Rate(d) |
597 |
% |
| 384 |
% |
| 722 |
% |
| 193 |
% |
|
|
|
|
| |
(a) |
Commencement
of operations on June 24, 2020. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(d) |
Excludes
the impact of in-kind transactions. |
(e) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
PACER
LUNT MIDCAP MULTI-FACTOR ALTERNATOR ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year/period |
| For
the |
| For
the |
| For
the |
| For
the |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Period
Ended |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
|
April
30,
2021(a)(c) |
Net
Asset Value, Beginning of Period |
$ |
33.19 |
|
| $ |
32.19 |
|
| $ |
37.07 |
|
| $ |
23.84 |
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
| |
Net
Investment Income (Loss)(b) |
0.25 |
|
| 0.37 |
|
| 0.20 |
|
| 0.07 |
|
Net
Realized and Unrealized Gain (Loss) on Investments(e) |
9.73 |
|
| 1.01 |
|
| (4.87) |
|
| 13.26 |
|
Total
from Investment Operations |
9.98 |
|
| 1.38 |
|
| (4.67) |
|
| 13.33 |
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.24) |
|
| (0.36) |
|
| (0.19) |
|
| (0.07) |
|
Distributions
from Return of Capital |
— |
|
| (0.02) |
|
| (0.02) |
|
| (0.03) |
|
Total
Distributions |
(0.24) |
|
| (0.38) |
|
| (0.21) |
|
| (0.10) |
|
Net
Asset Value, End of Period |
$ |
42.93 |
|
| $ |
33.19 |
|
| $ |
32.19 |
|
| $ |
37.07 |
|
Total
Return |
30.16 |
% |
| 4.43 |
% |
| -12.66 |
% |
| 56.04 |
% |
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
55,809 |
|
| $ |
34,852 |
|
| $ |
35,406 |
|
| $ |
35,219 |
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.61 |
% |
| 0.60 |
% |
Net
Investment Income (Loss) to Average Net Assets |
0.66 |
% |
| 1.14 |
% |
| 0.55 |
% |
| 0.27 |
% |
Portfolio
Turnover Rate(d) |
367 |
% |
| 569 |
% |
| 529 |
% |
| 322 |
% |
|
|
|
|
| |
(a) |
Commencement
of operations on June 24, 2020. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(d) |
Excludes
the impact of in-kind transactions. |
(e) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
PACER
LUNT LARGE CAP MULTI-FACTOR ALTERNATOR ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year/period |
| For
the |
| For
the |
| For
the |
| For
the |
| Year
Ended |
| Year
Ended |
| Year
Ended |
| Period
Ended |
| April
30, 2024 |
| April
30, 2023 |
| April
30, 2022 |
|
April
30,
2021(a)(c) |
Net
Asset Value, Beginning of Period |
$ |
34.95 |
|
| $ |
36.34 |
|
| $ |
37.61 |
|
| $ |
24.42 |
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
| |
Net
Investment Income (Loss)(b) |
0.34 |
|
| 0.54 |
|
| 0.39 |
|
| 0.32 |
|
Net
Realized and Unrealized Gain (Loss) on Investments(e) |
9.36 |
|
| (1.38) |
|
| (1.33) |
|
| 13.14 |
|
Total
from Investment Operations |
9.70 |
|
| (0.84) |
|
| (0.94) |
|
| 13.46 |
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(0.31) |
|
| (0.55) |
|
| (0.33) |
|
| (0.27) |
|
Total
Distributions |
(0.31) |
|
| (0.55) |
|
| (0.33) |
|
| (0.27) |
|
Net
Asset Value, End of Period |
$ |
44.34 |
|
| $ |
34.95 |
|
| $ |
36.34 |
|
| $ |
37.61 |
|
Total
Return |
27.83 |
% |
| -2.26 |
% |
| -2.58 |
% |
| 55.41 |
% |
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
297,078 |
|
| $ |
206,191 |
|
| $ |
267,095 |
|
| $ |
43,253 |
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
| 0.60 |
% |
Net
Investment Income (Loss) to Average Net Assets |
0.84 |
% |
| 1.54 |
% |
| 0.98 |
% |
| 1.19 |
% |
Portfolio
Turnover Rate(d) |
417 |
% |
| 629 |
% |
| 434 |
% |
| 304 |
% |
|
|
|
|
| |
(a) |
Commencement
of operations on June 24, 2020. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(d) |
Excludes
the impact of in-kind transactions. |
(e) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
PACER
PACIFIC ASSET FLOATING RATE HIGH INCOME ETF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year |
| For
the |
| For
the |
| For
the |
| For
the |
| For
the |
| |
| Year
Ended |
| Year
Ended |
| Period
Ended |
| Year
Ended |
| Year
Ended |
| |
| April
30, 2024 |
| April
30, 2023 |
|
April
30, 2022(a)(c) |
| June
30, 2021 |
| June
30, 2020 |
| |
Net
Asset Value, Beginning of Period |
$ |
45.71 |
|
| $ |
47.76 |
|
| $ |
48.90 |
|
| $ |
46.52 |
|
| $ |
48.73 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
|
|
|
|
|
| |
Net
Investment Income (Loss)(b) |
4.23 |
|
| 3.34 |
|
| 1.47 |
|
| 1.47 |
|
| 1.90 |
|
| |
Net
Realized and Unrealized Gain (Loss) on Investments(e) |
1.58 |
|
| (2.10) |
|
| (1.29) |
|
| 2.47 |
|
| (2.20) |
|
| |
Total
from Investment Operations |
5.81 |
|
| 1.24 |
|
| 0.18 |
|
| 3.94 |
|
| (0.30) |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
|
|
|
|
|
|
|
|
| |
Distributions
from Net Investment Income |
(4.02) |
|
| (3.29) |
|
| (1.32) |
|
| (1.56) |
|
| (1.91) |
|
| |
Total
Distributions |
(4.02) |
|
| (3.29) |
|
| (1.32) |
|
| (1.56) |
|
| (1.91) |
|
| |
Net
Asset Value, End of Period |
$ |
47.50 |
|
| $ |
45.71 |
|
| $ |
47.76 |
|
| $ |
48.90 |
|
| $ |
46.52 |
|
| |
Total
Return |
13.25 |
% |
| 2.91 |
% |
| 0.34 |
% |
| 8.63 |
% |
| -0.70 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| |
SUPPLEMENTAL
DATA: |
|
|
|
|
|
|
|
|
|
| |
Net
Assets at End of Period (000’s) |
$ |
248,422 |
|
| $ |
100,095 |
|
| $ |
81,663 |
|
| $ |
31,788 |
|
| $ |
27,911 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
|
|
|
|
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
| 0.62 |
% |
| 0.68 |
% |
| 1.06 |
% |
| |
Expenses
to Average Net Assets After Advisory Fees (Waived) and Other Fees
(Reimbursed)/Recouped |
N/A |
| N/A |
| N/A |
| 0.86 |
% |
| 1.10 |
% |
| |
Net
Investment Income (Loss) to Average Net Assets |
9.01 |
% |
| 7.36 |
% |
| 3.63 |
% |
| 3.04 |
% |
| 3.98 |
% |
| |
Portfolio
Turnover Rate(d) |
43 |
% |
| 79 |
% |
| 37 |
% |
| 35 |
% |
| 48 |
% |
| |
|
|
|
|
| |
(a) |
For
the period ended July 1, 2021 to April 30, 2022. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(d) |
Excludes
the impact of in-kind transactions. |
(e) |
Realized
and unrealized gains and losses per share in this caption are balancing
amounts necessary to reconcile the change in net asset value per share for
the period, and may not reconcile with the aggregate gains and losses in
the Statement of Operations due to share transactions for the
period. |
PACER
DATA AND DIGITAL REVOLUTION ETF
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year/period |
| For
the |
| For
the |
| Year
Ended |
| Period
Ended |
| April
30, 2024 |
|
April
30,
2023(a)(e) |
Net
Asset Value, Beginning of Period |
$ |
25.36 |
|
| $ |
25.31 |
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
| |
Net
Investment Income (Loss)(b) |
0.10 |
|
| 0.15 |
|
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
14.62 |
|
| 0.04 |
|
Total
from Investment Operations |
14.72 |
|
| 0.19 |
|
|
|
| |
LESS
DISTRIBUTIONS: |
(0.06) |
|
| (0.14) |
|
Distributions
from Net Investment Income |
(0.06) |
|
| (0.14) |
|
Total
Distributions |
|
| |
|
|
| |
CAPITAL
SHARE TRANSACTIONS |
|
| |
Transaction
Fees |
0.00 |
|
(f) |
— |
|
|
|
| |
Net
Asset Value, End of Period |
$ |
40.02 |
|
| $ |
25.36 |
|
Total
Return |
58.06 |
% |
| 0.84 |
% |
|
|
| |
SUPPLEMENTAL
DATA: |
|
| |
Net
Assets at End of Period (000’s) |
$ |
28,812 |
|
| $ |
1,014 |
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
Net
Investment Income (Loss) to Average Net Assets |
0.27 |
% |
| 0.73 |
% |
Portfolio
Turnover Rate(d) |
27 |
% |
| 9 |
% |
|
|
|
|
| |
(a) |
Commencement
of operations on June 8, 2022. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(d) |
Excludes
the impact of in-kind transactions. |
(e) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
(f) |
Represents
less than $0.005. |
PACER
INDUSTRIALS AND LOGISTICS ETF
|
|
|
|
|
|
|
|
|
|
| |
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout the year/period |
| For
the |
| For
the |
| Year
Ended |
| Period
Ended |
| April
30, 2024 |
|
April
30,
2023(a)(e) |
Net
Asset Value, Beginning of Period |
$ |
25.24 |
|
| $ |
24.87 |
|
|
|
| |
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
| |
Net
Investment Income (Loss)(b) |
0.59 |
|
| 0.43 |
|
Net
Realized and Unrealized Gain (Loss) on Investments(c) |
1.29 |
|
| 0.24 |
|
Total
from Investment Operations |
1.88 |
|
| 0.67 |
|
|
|
| |
LESS
DISTRIBUTIONS: |
|
| |
Distributions
from Net Investment Income |
(0.74) |
|
| (0.30) |
|
Total
Distributions |
(0.74) |
|
| (0.30) |
|
Net
Asset Value, End of Period |
$ |
26.38 |
|
| $ |
25.24 |
|
Total
Return |
7.54 |
% |
| 2.90 |
% |
|
|
| |
SUPPLEMENTAL
DATA: |
|
| |
Net
Assets at End of Period (000’s) |
$ |
1,055 |
|
| $ |
1,010 |
|
|
|
| |
RATIOS
TO AVERAGE NET ASSETS: |
|
| |
Expenses
to Average Net Assets |
0.60 |
% |
| 0.60 |
% |
Net
Investment Income (Loss) to Average Net Assets |
2.26 |
% |
| 2.01 |
% |
Portfolio
Turnover Rate(d) |
26 |
% |
| 10 |
% |
|
|
|
|
| |
(a) |
Commencement
of operations on June 8, 2022. |
(b) |
Calculated
based on average shares outstanding during the period. |
(c) |
Realized
and unrealized gain (loss) per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gain (loss) in the
Statement of Operations due to share transactions for the
period. |
(d) |
Excludes
the impact of in-kind transactions. |
(e) |
Ratios
have been annualized and total return and portfolio turnover have not been
annualized. |
|
|
|
|
|
|
|
|
|
|
| |
Adviser |
Pacer
Advisors, Inc.
500
Chesterfield Parkway
Malvern,
Pennsylvania 19355 |
Independent
Registered Public Accounting Firm |
Sanville
& Company
2617
Huntingdon Pike
Huntingdon
Valley, Pennsylvania 19006 |
Sub-Adviser
(to AFTY) |
CSOP
Asset Management Ltd.
Suite
2802, Two Exchange Square
8
Connaught Place
Central,
Hong Kong |
Sub-Adviser
(to FLRT) |
Aristotle
Pacific Capital, LLC
840
Newport Center Drive, 7th
Fl
Newport
Beach, CA 92660 |
Sub-Adviser
(to PTBD) |
Vident
Advisory, LLC
1125
Sanctuary Parkway, Suite 515
Alpharetta,
Georgia 30009 |
Distributor |
Pacer
Financial, Inc.
500
Chesterfield Parkway
Malvern,
Pennsylvania 19355 |
Fund
Accountant, Administrator, Index Receipt Agent, and Transfer
Agent |
U.S.
Bank Global Fund Services
615
East Michigan Street
Milwaukee,
Wisconsin 53202 |
Legal
Counsel |
Practus
LLP
11300
Tomahawk Creek Parkway,
Suite
310
Leawood,
Kansas 66211 |
Custodian |
U.S.
Bank National Association
1555
N. Rivercenter Drive
Milwaukee,
Wisconsin 53212 |
| |
The
Trust’s current SAI provides additional detailed information about each Fund. A
current SAI dated August 31, 2024, as supplemented from time to time, is on
file with the SEC and is herein incorporated by reference into this
Prospectus.
Additional
information about each Fund’s investments is available in the Funds’ annual and
semi-annual reports to shareholders (when available). In the annual report you
will find a discussion of the market conditions and investment strategies that
significantly affected each Fund’s performance for the respective
period.
To
make shareholder inquiries, for more detailed information on each Fund, or to
request the SAI or annual or semi-annual shareholder reports (once available)
free of charge, please:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Call: |
1-800-617-0004
Monday
through Friday
8:00
a.m. – 5:00 p.m. (Central time) |
|
Write: |
Pacer
Funds Trust, (Name of Fund) c/o U.S. Bank Global Fund Services,
LLC P.O. Box 701 Milwaukee, Wisconsin 53202 |
Visit: |
www.PacerETFs.com |
|
| |
Reports
and other information about each Fund are also available:
•Free
of charge from the SEC’s EDGAR database on the SEC’s website at
http://www.sec.gov; or
No
person is authorized to give any information or to make any representations
about each Fund and its Shares not contained in this Prospectus and you should
not rely on any other information. Read and keep this Prospectus for future
reference.
(The
Trust’s SEC Investment Company Act file number is 811-23024)