Pacer Adds Active Floating Rate ETF | ETF Strategy
Pacer expanded its ETF offering by leveraging an actively managed variable rate ETF acquired from a global investment manager Pacific Asset Management.
The Pacer Pacific Asset Floating Rate High Income ETF (FLRT US) is registered on NYSE Arca and has nearly $ 40 million in assets under management.
The fund was renamed Pacific Global Senior Loan ETF, an ETF which was itself created by reorganizing the Pacific Asset Enhanced Floating Rate ETF from AdvisorShares in January 2020.
Pacific Asset Management, in its new role as sub-advisor, will continue to manage the ETF’s portfolio using an expanded investment mandate.
The fund previously invested exclusively in senior secured and unsecured loans issued in US dollars by lower quality companies globally.
Senior loans are made by financial institutions to businesses that are generally considered to have low credit quality. They have a greater seniority in the capital structure of the issuer, taking priority over other unsecured or otherwise more junior debts.
The fund will now also invest in other floating rate securities, including applicable secured loan bonds, high yield bonds, asset backed securities and commercial mortgage backed securities.
The fund may be of interest to investors who are hungry for yield and concerned about duration risk. Its 30-day SEC yield is currently 3.00% and its effective term is only 0.54 years.
It comes with a reduced expense ratio of 0.60%, down from its original price of 0.68%.
Sean O’Hara, President of Pacer ETFs Distributors, said: âWith the addition of FLRT, we hope to provide a unique fixed income strategy for advisors looking for an attractive solution in a low-return environment, especially a -note the world.
Joe Thomson, Founder and Chairman of Pacer Financial, added: âWe are delighted to be working with Pacific Asset Management to improve the fund’s strategy and deliver a single ETF to a wider audience of advisors and investors.