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The Autopilot ETF Series

PAEU

Pacer Autopilot Hedged European Index ETF

A strategy driven Eurozone exchange traded fund that alternates between a hedged and unhedged position on a monthly basis and aims to take advantage of the Euro/U.S. Dollar (EUR/USD) exchange rate.

A currency hedge uses a financial contract to reduce the risk associated with changes in currency exchange rates.

  • When an index is unhedged, international investments are calculated in the foreign currency and converted back to U.S. Dollars. Investors benefit when the foreign currency strengthens and lose when the foreign currency weakens.
  • When an index is hedged, international investments are calculated in the foreign currency. Investors do not lose or gain value from currency fluctuation.


Currency Impact on International Investment (12/31/93 - 12/31/15)

The graph below shows the relationship between the Euro1 and the U.S. Dollar over a 20+ year period. The EUR/USD ratio is constantly fluctuating. When the dollar weakens, return on international investment increases. When the dollar strengthens, return on international investment decreases.


(1)The Euro was introduced on Jan 1, 1999. Before that it was known as the European currency unit, which consisted of a basket of underlying currencies of EU members. Each currency was weighted based on their share of EU output.
Source: Bloomberg.


Pacer Autopilot Hedged European Strategy Overview

The strategy is designed to alternate between a hedged and unhedged position on a monthly basis in an effort to take advantage of the fluctuation in exchange rates.

◾ EUR/USD 20 Day Simple Moving Average (20 Day SMA)

◾ EUR/USD 130 Day Simple Moving Average (130 Day SMA)


The graph above illustrates the Pacer Autopilot Hedged European Index methodology based on hypothetical movements. This does not demonstrate historical data, and is not an indication of how the methodology will perform in the future.


Strengthening U.S. Dollar Trend/Weakening Euro = Hedged Position

When the 20 day simple moving average of the EUR/USD exchange rate is below its 130 day simple moving average for 5 consecutive business days, the Index will track the hedged version of the underlying index.



Weakening U.S. Dollar Trend/Strengthening Euro = Unhedged Position

When the 20 day simple moving average of the EUR/USD exchange rate is above its 130 day simple moving average for 5 consecutive business days, the Index will track the unhedged version of the underlying Index.



Exposure changes are evaluated on the second to last day of the month and are dependent upon the most recent trend of at least five consecutive days. The Index is rebalanced monthly.


FTSE Eurozone Characteristics:

  • Derived from the FTSE Global Equity Index Series (GEIS), covering 98% of the world’s investable market capitalization, providing coverage to 11 developed markets in the Eurozone. They include:  Austria, Belgium and Luxembourg, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, and Spain
  • Includes large- and mid-cap stocks screened for liquidity and investability
  • Reviewed semi-annually in March and September

 

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Performance (%)

as of 9/30/16

 

  Since Fund Inception (12/14/15) YTD 1-Year 3-Year 5-Year
Pacer Autopilot Hedged European Index ETF Market Price 4.13 0.32 - - -
Pacer Autopilot Hedged European Index ETF NAV 3.87 -0.35 - - -
Pacer Autopilot Hedged European Index 5.50 0.73 - - -
FTSE Eurozone Total Return Index (Hedged to USD) 3.17 -1.49 4.76 7.00 12.98
FTSE Eurozone Total Return Index (USD) (Unhedged) 3.66 0.84 4.56 0.36 8.46

This is a new Fund and therefore has limited performance to report. Performance quoted represents past performance and does not guarantee future results. Investment return and principal value will fluctuate, so shares may be worth more or less when redeemed or sold. Current performance may be lower or higher than the performance quoted. The index returns are calculated gross of any foreign tax withholding. Visit www.paceretfs.com for the most recent month-end performance. Index returns are for illustrative purposes only. Index performance does not reflect any management fees, transaction costs or expenses. You cannot invest directly in an index.

 

Current Exposure

Tracking: Hedged Position

Current Holdings

Daily Holdings

 

Top 10 Holdings (%)

as of 9/30/16

 

Current Holdings

Daily Holdings

 

Ticker Holding Weight
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Pacer Autopilot Hedged European Index ETF Sector Breakdown (%)

as of 9/30/16

 

Sector Weight

Index Characteristics

as of 9/30/16

 

  FTSE Eurozone Total Return Index
Weighted Average Market Cap ($mil) 49,439.90
Dividend Yield (%) 3.49
P/E Ratio 12.96

Weighted average market cap is the sum of each company’s weight multiplied by its market cap.
Dividend yield is calculated using the gross dividend of a security (i.e., before any applicable withholding tax). Special cash dividends, unless they are paid for three consecutive years, and capital repayments are excluded from the dividend yield calculation.
Price to earning ratio (P/E ratio) is a fundamental measure used to determine if an investment is valued appropriately. Each holding’s P/E is the latest closing price divided by the latest fiscal year’s earnings per share. Negative P/E ratios are excluded from this calculation.

FTSE International Limited (“FTSE”) © FTSE 2015. FTSE® is a trade mark of London Stock Exchange Plc and The Financial Times Limited and is used by FTSE under license. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

 

Distributions

 

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Past distributions are not indicative of future distributions.
*Ordinary income is composed mainly of wages, salaries, commissions and interest income from bonds, and it is taxable using ordinary income rates.

 

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