New Pacer ETF Gives Investors Exposure To Private Equity, Venture Capital

In a move that broadens investor access to private market strategies, Pacer ETFs introduced the Pacer PE/VC ETF PEVC on Monday. The new fund seeks to track the total return performance of the FTSE PE/VC Index while maintaining a net expense ratio of 0.85%.

Between 50%-90% of the index’s weight is assigned to the FTSE Private Equity Buyout Index, while the remainder is allocated to the FTSE Venture Capital Index. The former tracks the returns generated by traditional private equity buyout strategies, whereas the latter tries to replicate performance within the venture capital space.

For instance, the buyout index spans industries such as consumer cyclical and noncyclical sectors (5.53% weightage), healthcare (6.71% weightage), technology (62.17%), financials (9.62%) and energy (2.7%). Meanwhile, the venture capital index emphasizes exposure to consumer services, materials, telecommunications, and software.

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To ensure a close tracking of the FTSE PE/VC Index, the PEVC ETF employs a full replication strategy. This means that the fund will maintain sector concentrations similar to those of its benchmark index. The management team expects the correlation between PEVC's performance and that of the FTSE PE/VC Index to exceed 95% over time.

"This fund offers a new way to tap into private market returns," said Sean O'Hara, president of Pacer ETF Distributors. "PEVC bridges the gap between the exclusivity of private equity and venture capital with the accessibility of ETF products."

Pacer ETFs has been steadily growing its presence in the U.S. market, now managing more than 50 funds. With the launch of PEVC, Pacer brings ETF-based access to private market strategies which has traditionally been an area reserved for institutional and ultra-high-net-worth investors.

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