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Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the Pacer Trendpilot US Large Cap ETF (PTLC), a passively managed exchange traded fund launched on 06/12/2015.
The fund is sponsored by Pacer Etfs. It has amassed assets over $946.22 M, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.60%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.95%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 25.80% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 4.13% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 21.08% of total assets under management.
Performance and Risk
PTLC seeks to match the performance of the Pacer Trendpilot US Large Cap Index before fees and expenses. The Pacer Trendpilot US Large Cap Index uses an objective, rules-based methodology to implement a systematic trend-following strategy that directs exposure 100% to the S&P 500 Index, 50% to the S&P 500 and 50% to 3-Month US Treasury bills, or 100% to 3-Month US Treasury bills, depending on the relative performance of the S&P 500 TR Index & its 200-business day historical simple moving average.
The ETF has added about 2.48% so far this year and was up about 15.11% in the last one year (as of 05/25/2018). In the past 52-week period, it has traded between $25.79 and $30.73.
The ETF has a beta of 0.64 and standard deviation of 11.37% for the trailing three-year period, making it a medium risk choice in the space. With about 507 holdings, it effectively diversifies company-specific risk.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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PACR-TRDP 750 (PTLC): ETF Research Reports
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