New ETF From Pacer Looks at Private Equity & Venture Capital

PEVC looks to provide similar results to the total return performance of the FTSE PE/VC Index. This fund has a net expense ratio of 85 basis points. 

The FTSE PA/VC Index offers mixed exposure to private equity buyout and venture capital strategies. Between 50% to 90% of the index’s weight is allocated toward the FTSE Private Equity Buyout Index. The remaining assets for the index are then allocated to the FTSE Venture Capital Index. 

The FTSE Equity Buyout Index attempts to create similar returns to private equity buyout strategies. Meanwhile, the FTSE Venture Capital Index looks to do the same with the venture capital industry. 

To do so, these indexes invest in liquid assets that provide exposure to specific investment sectors. For example, the buyout index includes consumer cyclical and noncyclical, healthcare, technology, financials, and energy, among others. For the venture capital index, asset focus includes sectors such as consumer services, materials, telecommunications, and software.

To gain close exposure to the FTSE index, PEVC generally uses a full replication strategy. As such, the fund will hold similar sector concentrations to that of its underlying index. As time goes on, the fund’s management team expects PEVC to have the correlation in performance between the fund and the index at 95% or higher. 

“This fund offers a new way to tap into private market returns,” noted 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 currently has more than 50 funds listed in the United States. One of the largest Pacer funds is the Pacer US Cash Cows 100 ETF (COWZ A-). This fund has well over $25 billion in assets under management. 

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