Pacer Debuts 5 ETFs, WBI Closes 2

May 06, 2019

Since Friday, Pacer Financial has launched five new ETFs, including two new Trendpilot ETF and three new Cash Cows brand ETFs.

Meanwhile, on Friday, May 3, WBI Shares announced the closure of two of its global ETFs.

New Int'l Trendpilot ETF

The Pacer Trendpilot International ETF (PTIN) is the latest fund from Pacer's Trendpilot brand, which alternates exposure between some benchmark index and three-month T-bills, in order to achieve three objectives: 1) participate in markets trending upward; 2) pare exposure to short-term downward moves; and 3) use T-bills for safety during longer-term down trends.

In this case, PTIN's benchmark index is the S&P Developed Ex-US Large Cap Local Currency Total Return Index.

When that index closes above its 200-day simple moving average (SMA) for five straight business days, the fund will be 100% allocated to securities in that index. Should the index close below the SMA for five consecutive days, PTIN's exposure will shift to 50/50 exposure to its benchmark and to T-bills.

Should the benchmark's SMA continue to slide over the next five consecutive days, PTIN moves entirely into T-bills. From there, the index will return back to 100% equity exposure, after the equity indicator once again has been triggered.

As of May 6, PTIN held roughly 662 securities. The fund costs 0.65% and trades on the NYSE Arca.

2 New Cash Cow ETFs

Two new Cash Cow ETFs also launched on Friday. Pacer's Cash Cow ETFs are designed to provide capital appreciation via screening broad-based indexes for quality stocks exhibiting high free-cash-flow yield.

The Pacer Emerging Markets Cash Cows 100 ETF (ECOW) screens for the top 100 companies with the highest free-cash-flow yield among emerging markets, as defined by countries in the FTSE Emerging Markets Index. Stocks are ranked within ECOW's benchmark according to their free-cash-flow yield over the past 12 months. Individual stocks are capped at 2% weight in the index, and the index itself is limited to a maximum of 20 companies from any country or sector. ECOW's index is reconstituted and rebalanced semiannually.

Meanwhile, the Pacer US Cash Cows Growth ETF (BUL) screens the S&P 900 Pure Growth Index for the top 50 growth companies with the highest free-cash-flow yield. Stocks are ranked according to their free-cash-flow yield over the past 12 months. Individual stocks are capped at 5% weight within the index, and any weight above that figure is redistributed among the other index constituents in proportion to their weights. BUL's index is reconstituted and rebalanced quarterly.

Both ETFs trade on the NYSE Arca. ECOW has an expense ratio of 0.70%, while BUL has an expense ratio of 0.60%.

Trendpilot, Cash Cows ETF-Of-ETFs Debut

Meanwhile, Monday, May 6 saw the launch of two new funds-of-funds from Pacer.

The Pacer Trendpilot Fund Of Funds ETF (TRND) is an ETF-of-ETFs that packages four Trendpilot ETFs into one wrapper: the Pacer Trendpilot U.S. Large Cap ETF (PTLC); the Pacer Trendpilot U.S. Mid Cap ETF (PTMC); the Pacer Trendpilot 100 ETF (PTNQ); and the newly minted Pacer Trendpilot International ETF (PTIN). 

PTLC, PTMC and PTNQ each comprise 20% of the fund, while PTIN comprises 40%. The fund itself is not set up to enact the signature Trendpilot strategy, but the four index ETFs it holds will, resulting in a possible blend of equity and three-month T-bill exposures within TRND's portfolio over time.

The Pacer Cash Cows Fund of Funds ETF (HERD) packages five Cash Cows ETFs into one fund: the Pacer US Cash Cows 100 Index ETF (COWZ); the Pacer US Small Cap Cash Cows Index ETF (CALF); the new Pacer US Cash Cows Growth Index (BUL); the Pacer Global Cash Cows Dividend Index ETF (GCOW); and the Pacer Developed Markets International Cash Cows 100 ETF (ICOW). Each ETF comprises 20% of the fund.

TRND and HERD trade on the NYSE Arca. TRND costs 0.78% annually, while HERD costs 0.74%.

WBI To Shutter 2 ETFs

Also on Friday, WBI Shares announced it would close the $68 million WBI BullBear Global High Income ETF (WBIH) and the $19 million WBI BullBear Global Rotation ETF (WBIR). The last day of trading for both funds will be June 7, with liquidations set to process on or by June 14.

Both ETFs are actively managed funds with comparatively high expense ratios: WBIH costs 1.23%, while WBIR costs 1.58% per year.

WBIH is a multi-asset ETF that holds a blend of income-producing securities from around the world. Eighty percent of its portfolio is dedicated to any high-income-producing security, while 20% is set aside for tactical plays and the mitigation of downside risk.

Meanwhile, WBIR seeks to achieve long-term capital appreciation while offering downside protection through global tactical asset allocation. The fund can hold stocks, ETFs and over-the-counter products, as well as a significant amount of cash equivalents in times of extreme market stress. In practice, WBIR is mostly an ETF-of-ETFs.

According to the press release, WBI is closing the two funds while reaffirming its "plans to launch additional funds of the Absolute Shares Trust," the trust from which the WBI-brand products are based.

Contact Lara Crigger at [email protected]

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