Pacer agrees deal to use Citi indices for future ETFs

Aug 1st, 2017 | By | Category: ETF and Index News

Pacer ETFs has announced a deal with Citi to license Citi’s proprietary indices for use in exchange-traded funds. Under the agreement, Pacer will use Citi’s indices to offer ETFs that provide institutional investors with strategy-driven solutions for risk management and long-term growth.

Pacer agrees deal to use Citi indices for future ETFs

Sean O’Hara, president of Pacer ETFs.

Sean O’Hara, president of Pacer ETFs, commented: “Pacer ETFs is excited about the opportunity to license indices from Citi. Utilizing Citi’s indices will provide new opportunities in the institutional space for Pacer.”

Pacer has accrued over $1 billion in assets under management (AUM) in two years through two suites of ETFs: the Trendpilot Series and the Cash Cows Index Series.

The Trendpilot Series uses a trend following strategy that seeks to participate in the equity market when it is trending up, maintain some equity exposure during short-term declines, and move into fixed income when the equity market trends down. Pacer currently has four Trendpilot ETFs, the largest of which is the Pacer Trendpilot 750 ETF (Bats: PTLC) which was launched in June 2015 and has $515 million in AUM with a total expense ratio (TER) of 0.60%.

The Cash Cows Index Series employs a selection process to identify top companies in an index universe based on their free cash flow yield. Pacer currently has four funds in the Cash Cows family, the largest being the Pacer Global Cash Cow ETF (Bats: GCOW) which was launched in February 2016 and has AUM of $93m with a TER of 0.60%.

It is unclear if the deal will see Pacer extend its range to include fixed income products. The seven Europe-listed ETFs currently available that track Citi indices all offer exposure to fixed income. The largest is the iShares Global Government Bond UCITS ETF (LON: IGLO) which tracks the Citigroup World Government Bond G7 Index and has $920m in AUM with a TER of 0.20%.

Joe Thomson, founder and president of Pacer Financial, said: “At Pacer ETFs, our goal is to offer investors strategies that add value to their portfolios. Our new agreement with Citi will allow us to provide our ETFs to the institutional market. We continue to look for new avenues for growth and innovation to help financial advisors and their clients and now institutions to meet their investment needs.”

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