On Friday, the S & P 500 closed below its 200-day moving average for the first time since March 17.
If the total-return version of the index closes below that level for five straight days, then the $2 billion Pacer Trendpilot US Large Cap ETF (PTLC) will automatically sell some of its all-stock portfolio to shift to a 50-50 split between equities and Treasury bills.
And if the 200-day moving average itself then starts to fall, the fund will go to 100% T-bills.
Still, the fund's rule tied to the 200-day moving average is an example of how the move of a stock or index across a widely-followed indicator can cause volatility.
Year to date, the fund is up just under 5% — well below the gain of more than 11% for the SPDR S & P 500 ETF Trust (SPY) .
Persons:
rebalance, Sean O'Hara, O'Hara
Organizations:
Trust, ETF Distributors, Pacer, Nasdaq
Locations:
technologystocks