PACER ADVISORS

Pacer ETFs rely on a patented rules-based system that tracks a benchmark's position relative to its 200-day simple moving average. When the index closes above the moving average for five consecutive business days, the fund allocates to equities. If it closes below the average for five consecutive days, the fund rotates 50% into 3-month US Treasury bills, and after another five days below the trend, it shifts the remaining 50% to T-bills. This removes subjective market calls from the allocation decision.

Joe Thomson, the founder, serves as Chairman and President and is the named inventor on the firm's key ETF strategy patent. Sean O'Hara leads the distribution arm as President of Pacer ETFs Distributors. The firm maintains a small senior team overseeing index methodology licensing and product structuring, but the algorithms embedded in each prospectus—not discretionary managers—determine daily portfolio exposure.

The Trendpilot mechanism uses a staggered risk-off sequence. After the initial five-day breach of the 200-day moving average, the fund moves 50% of its portfolio to Treasury bills. If the index remains below its moving average for another five business days, the remaining 50% shifts to T-bills, leaving the fund fully in cash equivalents until the equity index reclaims its moving average for five consecutive days. This creates a delayed re-entry, which can produce a tracking difference in fast-reversing markets.

Pacer partnered with CSOP Asset Management to launch the Pacer CSOP FTSE China A50 ETF, which provides direct exposure to the 50 largest A-share companies listed on the Shanghai and Shenzhen stock exchanges. The fund uses a physical replication strategy and is one of the few US-listed ETFs offering pure A-share access without the use of Hong Kong-listed proxies or swaps.

Pacer originally operated as an RIA managing separate accounts before pivoting to an ETF-centric model. The firm now conducts almost all its investment activity through exchange-traded funds, with its entire identifiable product line in an ETF wrapper. No separately managed account platform is currently marketed.

Pacer's Cash Cows ETFs screen for companies with a high trailing twelve-month free-cash-flow yield rather than relying on price-to-book or price-to-earnings multiples. They target the top 100 companies from the underlying universe by free-cash-flow yield, reselecting and reweighting semi-annually. This avoids value traps where accounting earnings are distorted by non-cash charges.

In October 2024, Pacer filed for exemptive relief from the SEC to launch actively managed Multi-Asset Solution ETFs. The filing proposes a fund-of-ETF structure where Pacer can allocate across affiliated and unaffiliated ETFs in equity, fixed-income, and alternative sleeves, marking the firm's first entry into an active, outcome-oriented multi-asset wrapper (per SEC EDGAR, October 2024).