ck0001616668-20220430
PROSPECTUS
December 19,
2022
Pacer
US Large Cap Cash Cows Growth Leaders ETF (COWG)
listed
on The Nasdaq Stock Market LLC
The
U.S. Securities and Exchange Commission (“SEC”) has not approved or disapproved
of these securities or passed upon the accuracy or adequacy of this Prospectus.
Any representation to the contrary is a criminal offense.
INVESTMENT
PRODUCTS: ¨
ARE NOT FDIC INSURED ¨
MAY LOSE VALUE ¨
ARE NOT BANK GUARANTEED
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) |
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| Management
Fees |
0.49% |
| Distribution
and/or Service (12b-1) Fees |
None |
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Other
Expenses* |
0.00% |
| Total
Annual Fund Operating Expenses |
0.49% |
*
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 is newly
organized, 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
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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. |
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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 December 19, 2022, the
companies included in the Index had a market capitalization of $1.96 billion to
$2.36 trillion. As of December 19, 2022, the Index had significant exposure to
the health care and information technology sectors. 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 (as defined below) 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.
•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.
◦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.
•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.
•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.
◦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
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 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 sales person to recommend the Fund over another
investment. Ask your sales person or visit your financial intermediary’s website
for more information.
Additional
Information About the Fund’s Investment Objective
The
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.
Additional
Information About the Fund’s Principal Investment Strategies
The
Fund 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 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 the Fund’s Index, and the degree
to which these components represent certain industries, may change over
time.
Additional
Information About the Index
The
Pacer US Large Cap Cash Cows Growth Leaders Index is owned by Index Design Group
(“IDG”), an affiliate of the Adviser, and is calculated by a third-party
calculation agent that is not affiliated with the Fund, IDG, the Adviser or the
Fund’s distributor.
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, 2022, the average weighted market capitalization of companies in the
Russell 1000 Index was $437.5 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.
Additional
Information About the Principal Risks of Investing in the Fund
This
section provides additional information regarding the principal risks described
under “Principal Risks of Investing in the Fund” of the Fund Summary. The
principal risks are presented in alphabetical order to facilitate finding
particular risks. Each risk summarized below is considered a ‘principal risk’ of
investing in the Fund as noted in the Fund Summary, regardless of the order in
which they appear. Each of the factors below could have a negative impact on the
Fund’s performance and trading prices.
Calculation
Methodology Risk
The
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 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.
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.
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, among others: 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.
The
investments 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 markets generally or factors affecting specific issuers,
industries, or sectors in which the Fund invests. In addition, local, regional
or global events such as war, acts of terrorism, spread of infectious diseases
or other public health issues, recessions, or other events could have a
significant negative impact on the Fund and its investments. U.S. and
international markets have experienced volatility in recent months and years due
to a number of economic, political and global macro factors, including rising
inflation, the war between Russia and Ukraine, and the impact of the novel
coronavirus (COVID-19) global pandemic. While U.S. and global economies are
recovering from the effects of the pandemic, the recovery is proceeding at
slower than expected rates and may last for a prolonged period of time.
Uncertainties regarding interest rates, political events, the Russia-Ukraine
war, rising government debt in the U.S., and trade tensions have also
contributed to market volatility. Such events may affect certain geographic
regions, countries, sectors and industries more significantly than others. Such
events could adversely affect the prices and liquidity of the Fund’s portfolio
securities or other instruments and could result in disruptions in the trading
markets. The trading prices of debt securities and other instruments may also
fluctuate in response to a variety of other factors, and consequently, the
Fund’s NAV and market price may also fluctuate significantly. 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:
◦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 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. 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 The Nasdaq Stock Market LLC 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 the Fund’s underlying portfolio
holdings, which can be significantly less liquid than Shares.
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.
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 the 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 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.
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.
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.
◦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.
◦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.
Tracking
Risk
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.
ADDITIONAL
NON-PRINCIPAL INVESTMENT STRATEGY INFORMATION
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, 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 (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 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 believes will help the Fund track the Index.
ADDITIONAL
NON-PRINCIPAL RISK INFORMATION
Cash
Equivalents and Short-Term Investments. Normally,
the Fund invests substantially all of its assets to meet its investment
objective. The 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 the 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, the Fund may depart from its
principal investment strategy and invest part or all of its assets in these
securities, or it may hold cash. During such periods, the Fund may not be able
to achieve its investment objective. The 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 Fund’s 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 the Fund will
grow to or maintain an economically viable size, in which case the 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
Fund 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 Fund 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 the 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 Fund has 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, the Fund may lose money. The 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
the Fund.
Information
about the Fund’s daily portfolio holdings is available at www.PacerETFs.com. A
summarized description of the Fund’s policies and procedures with respect to the
disclosure of the Fund’s portfolio holdings is available in the Fund’s Statement
of Additional Information (“SAI”).
The
Fund is a 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 transfer agency, custody, fund administration,
securities lending and all other related services necessary for the Fund to
operate.
For
its services, the Adviser receives a fee from the Fund, based on
0.49%
of the Fund’s average daily net assets.
Under
the Investment Advisory Agreement between the Adviser and the Trust, on behalf
of the Fund (the “Investment Advisory Agreement”), the Adviser has agreed to pay
all expenses of the 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.
The
basis for the Board of Trustees’ approval of the Fund’s Investment Advisory
Agreement will be available in the Fund’s first Annual or Semi-Annual Report to
Shareholders.
Portfolio
Managers
The
Fund employs a rules-based, passive investment strategy. The Adviser uses a
committee approach to managing the Fund. The Fund’s portfolio management team
consists of Bruce Kavanaugh and Danke Wang, who are jointly and primarily
responsible for the day-to-day management of the Fund’s portfolio.
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 in 2022.
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 the Fund.
Most
investors will buy and sell Shares of the Fund through brokers. Shares of the
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 the
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 Fund’s distributor may acquire Shares directly from the
Fund, and only APs may tender their Shares for redemption directly to the 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 the Fund’s Shares will be priced at NAV only if you purchase Shares directly
from the 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 the 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. The 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, the 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 the 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
The
Fund expects to pay out dividends, if any, on an annual
basis. Nonetheless, the Fund may make more frequent dividend payments. The Fund
expects to distribute its net realized capital gains to investors annually. The
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 the 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 the Fund.
Investors
owning Shares of the Fund are beneficial owners as shown on the records of DTC
or its participants. DTC serves as the securities depository for all Shares of
the 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 the 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 the Fund is available through certain broker-dealers. If
you are interested in enrolling in householding and receiving a single copy of
the prospectus 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
The
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 the Fund, are an essential part of the ETF process and help keep
Fund Share trading prices in line with NAV. As such, the 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, the 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, the 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. Registered
investment companies are permitted to invest in the 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 Fund.
The
following discussion is a summary of some important U.S. federal income tax
considerations generally applicable to investments in the Fund. Your investment
in the Fund may have other tax implications. Please consult your tax advisor
about the tax consequences of an investment in Shares, including the possible
application of foreign, state, and local tax laws.
The
Fund intends to qualify each year for treatment as a registered 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, the 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:
•The
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 Fund, 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 the 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 the Fund
for more than one year generally result in long-term capital gains and losses,
and sales of assets held by the Fund for one year or less generally result in
short-term capital gains and losses. Distributions of the 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 the 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 Fund
before your investment (and thus were included in the Fund Shares’ NAV when you
purchased your Fund Shares).
The
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 Fund may
sell portfolio securities to obtain the cash needed to distribute redemption
proceeds. This may cause the Fund 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 Fund 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 Fund will
generally be exempt from U.S. federal income tax on Capital Gain Dividends. The
exemption may not apply, however, if the investment in the 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 Fund 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 the 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
Fund (or a financial intermediary, such as a broker, through which shareholders
own Fund Shares) generally is 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 Fund will not pay any additional
amounts in respect to any amounts withheld.
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. If more than 50% of the total assets of the 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 Fund (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 the 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 the 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
Fund has 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 Fund would have a basis in the deposit securities
different from the market value of such securities on the date of deposit. The
Fund also has the right to require information necessary to determine beneficial
Share ownership for purposes of the 80% determination.
The
foregoing discussion summarizes some of the possible consequences under current
federal tax law of an investment in the Fund. 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 the Fund’s distributions, if any, that are attributable to interest
earned by the Fund on U.S. government securities. You should consult your tax
professional regarding the tax status of distributions in your state and
locality.
The
Distributor, Pacer Financial, Inc., is a broker-dealer registered with the U.S.
Securities and Exchange Commission. The Distributor distributes Creation Units
for the Fund on an agency basis and does not maintain a secondary market in
Shares. The Distributor has no role in determining the policies of the Fund or
the securities that are purchased or sold by the Fund. The Distributor’s
principal address is 500 Chesterfield Parkway, Malvern, Pennsylvania, 19355. The
Distributor is an affiliate of the Adviser.
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, the 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 Fund, 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 the 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.
Information
regarding how often Shares of the 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 Fund’s website at www.PacerETFs.com.
The
Fund is not sponsored, endorsed, sold or promoted by FTSE Russell, or any of its
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 Fund or any member of the public regarding the
advisability of investing in securities generally or in the Fund 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 Fund or the timing of the issuance
or sale of the Fund or in the determination or calculation of the equation by
which the Fund are to be converted into cash. FTSE Russell has no obligation or
liability in connection with the administration, marketing or trading of the
Fund. 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.
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 Fund to track the total
return performance of the Index or the ability of the Index 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 Index, 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 Index or
the data included therein. The Exchange makes no warranty, express or implied,
as to results to be obtained by the Fund, owners of Fund 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 Index 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 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
the Fund particularly. The Fund does not guarantee the accuracy, completeness,
or performance of the Index or the data included therein and shall have no
liability in connection with the Index or Index calculation. The Index Provider
owns the Index and the Index methodology and is a licensor of the Index to the
Adviser. The Index Calculation Agent maintains and calculates the Index for the
Fund. The Index Calculation Agent shall have no liability for any errors or
omissions in calculating the Index.
Financial
information is not available because the Fund has not commenced operation prior
to the date of this Prospectus.
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Adviser |
Pacer
Advisors, Inc.
500
Chesterfield Parkway
Malvern,
Pennsylvania 19355 |
Distributor |
Pacer
Financial, Inc.
500
Chesterfield Parkway
Malvern,
Pennsylvania 19355 |
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Custodian |
U.S.
Bank National Association
1555
N. Rivercenter Drive
Milwaukee,
Wisconsin 53212 |
Fund
Accountant, Administrator and Transfer Agent |
U.S.
Bank Global Fund Services
615
East Michigan Street Milwaukee, Wisconsin 53202 |
| Independent
Registered Public Accounting Firm |
Sanville
& Company
1514
Old York Road
Abington,
Pennsylvania 19001 |
Legal
Counsel |
Practus,
LLP
11300
Tomahawk Creek Parkway, Suite 310, Leawood, Kansas
66211 |
The
Trust’s current SAI provides additional detailed information about the Fund. A
current SAI dated December 19, 2022, as supplemented from time to time, is on
file with the SEC and is herein incorporated by reference into this Prospectus.
Additional
information about the Fund’s investments is available in the Fund’s 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 the Fund’s performance after the first fiscal year the
Fund is in operation.
To
make shareholder inquiries, for more detailed information on the Fund, or to
request the SAI or annual or semi-annual shareholder reports (once available)
free of charge, please:
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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
P.O.
Box 701
Milwaukee, Wisconsin 53201-0701 |
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Visit: |
www.PacerETFs.com |
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Reports
and other information about the Fund are available on the EDGAR Database on the
SEC’s Internet site at www.sec.gov, and copies of this information may be
obtained, after paying a duplicating fee, by electronic request at the following
e-mail address: [email protected].
No
person is authorized to give any information or to make any representations
about the 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)
