Daily ETF Watch: Pacer Debuts 2 Funds

Today Pacer rolled out two ETFs covering Europe on the BATS exchange. The Pacer Trendpilot European Index ETF (PTEU) and the Pacer Autopilot Hedged European Index ETF (PAEU) both track strategies that incorporate the FTSE Eurobloc Index.

According to the prospectus, PTEU switches its exposure between the FTSE index and three-month Treasury bills according to the 200-day moving average of the FTSE index. When FTSE’s Eurobloc Index closes above its 200-day moving average for five-consecutive business days, PTEU allocates its exposure fully to the FTSE index. Should the FTSE index close below that 200-day moving average for five-consecutive business days, it shifts into a portfolio that is 50% FTSE Eurobloc components and 50% three-month T-bills.

Finally, if the FTSE index closes below its 200-day moving average for another five-consecutive business days after PTEU’s portfolio has adopted a 50/50 allocation, the portfolio allocates fully to Treasury bills.

PAEU is a much simpler fund. It tracks the FTSE Eurobloc Index, which covers mid- and large-cap stocks in the eurozone while applying a currency-hedge based on the 20- and 130-day moving averages of the euro.

When the 20-day average is lower than the 130-day average, PAEU will incorporate forward currency contracts into its portfolio to hedge away currency risk. The fund will be unhedged when the euro’s 20-day moving average is above its 130-day moving average.

Both funds charge expense ratios of 0.65%.

12 Thematic Funds Planned

Global X has been known for reaching into the uncharted corners of the ETF space with its funds, and its latest filing does nothing to contradict that. The firm is planning to launch 12 globally focused niche ETFs falling into two buckets: technology and innovation, and people and demographics.

The former group is fairly self-explanatory, and its funds highlight some of the most talked-about and innovative areas of the technology space:

• 3D Printing ETF
• Cybersecurity ETF
• Digital Media ETF
• Disruptive Technology ETF
• Education Technology & Innovation ETF
• Emerging Biotechnology & Health Care Innovation ETF
• Energy Efficiency & Innovation ETF
• Nanotechnology ETF
• Robotics & Artificial Intelligence ETF

Some, like the Cybersecurity ETF and the Disruptive Technology ETF, are themes that have already been tackled by other ETF issuers. However, others like the Nanotechnology ETF and Digital Media ETF are entirely new territory, in which Global X would be able to claim first-mover status.

The people and demographics funds, however, are a little more opaque with regard to their areas of concentration.

The Aging Population ETF, for example, will target companies that provide goods and services aimed at the oldest quartile of the population, according to the prospectus. That means it will invest in a cross-sector combination of consumer product companies, insurance providers, medical devices developers and manufacturers, pharmaceutical companies and companies involved in the assisted living space.

Meanwhile, the Millennial Generation ETF will target companies associated with another demographic entirely—that of people born between the early 1980s and the early 2000s. The companies included in the fund will be involved in industries like social media, e-commerce, mobile technology, healthy lifestyle products and services, and the “sharing economy,” among others, the prospectus noted.

Finally, the Urbanization & Smart Cities ETF will basically look to capitalize on the performance of companies involved in leveraging the benefits of and improving urban living. That encompasses a diverse cross section of technology and infrastructure companies from sensor manufacturers to networking technology companies to waste management firms.

The filing included only brief descriptions of the ETFs, and did not mention who the index provider would be. It also did not include tickers, listing exchanges or expense ratios.

Contact Heather Bell at [email protected].