Pacer, the exchange traded funds issuer behind a unique suite of trend-following funds, added to its lineup Tuesday with the debut of the Pacer WealthShield ETF(CBOE: PWS).
The new ETF tracks the Pacer WealthShield Index. The idea behind PWS is to position investors for risk-on and risk-off environments. When risk taking is advised, the ETF can be fully allocated to equities. When risk appetite wanes, PWS can shift its portfolio to U.S. Treasuries.
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The underlying index uses a rules-based methodology to implement a trend-following strategy that directs some or all of its exposure to U.S. equity securities or U.S. Treasury securities depending on the strength of the high-yield corporate bond market relative to U.S. Treasury bonds and the momentum of certain U.S. equity sectors or industries and of long-term U.S. Treasury bonds, according to ETF Trends.
PWS comes to market positioned to take advantage of further upside in U.S. stocks. The new ETF can hold stocks from any sector, but currently features exposure to just five sectors and industries: technology, financial services, internet, healthcare and biotechnology.
PWS' top holdings, a group that combines for about a quarter of the new ETF's weight, include Apple Inc. (NASDAQ:AAPL), Facebook Inc. (NASDAQ:FB), Microsoft Corp. (NASDAQ:MSFT) and Johnson & Johnson (NYSE:JNJ).
If the index is in fixed-income mode, the index will be 100 percent allocated to the S&P U.S. Treasury Bond 20+ Year Total Return Index. However, if the value of the 20+ Year Index is below its seven-month exponential moving average, the index will instead be 100 percent allocated to three-month U.S. Treasury bills, according to ETF Trends.
A Boon For CBOE
PWS is the latest ETF to list on Cboe Global Markets Inc (NASDAQ:CBOE). The exchange operator is expanding its ETF listing business in significant fashion again this year.
Year-to-date, CBOE has welcomed 115 ETFs to its U.S. market. In the third quarter of 2017, CBOE welcomed a total of 23 ETFs to the CBOE ETF Marketplace as well as 30 transfers, and year-to-date has won 36 percent of all new U.S. ETF listings, said the exchange operator. There are now 246 ETFs listed on the CBOE ETF Marketplace, from 45 different issuers.
PWS charges 0.6 percent per year, or $60 on a $10,000 investment.
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