ETF Pulse Check Evaluating the Pacer Lunt Large Cap Alternator ETF ALTL
ETF EdgeSaturday, Jun 14, 2025 8:10 pm ET

The Pacer Lunt Large Cap Alternator ETF (ALTL) distinguishes itself by alternating exposure between low volatility and high-beta US stocks, effectively leveraging a strategy that capitalizes on momentum within US large-cap equities. This ETF tracks the Lunt Capital U.S. Large Cap Equity Rotation Index, which dynamically shifts its composition monthly between two sub-indices: the S&P 500 Low Volatility Index and the S&P 500 High Beta Index. This alternating methodology is based on a proprietary relative strength model, aiming to optimize the risk-adjusted returns by focusing on stocks with significant volatility or high sensitivity to market movements. Currently, the fund is gaining attention due to the evolving economic landscape that demands strategic agility to navigate both stability and growth prospects in large-cap US equities.
Basic Information
The Pacer Lunt Large Cap Alternator ETF (ALTL), issued by Pacer Advisors, was launched on June 24th, 2020. It carries an expense ratio of 0.60%, which is relatively high compared to its peers. The ETF's top 15 holdings include companies such as , , and , with individual weights ranging from 1.11% to 1.47%. This ETF exhibits a diversified sector exposure, predominantly in Consumer Staples at 7.04%, followed by Health Care at 3.52%, and Communication Services at 2.58%. has experienced negative net flow ratios over the past week and month at -0.52% and -0.84%, respectively. Its average returns reflect a challenging performance: -2.82% over six months, 3.65% over one year, and -4.56% over three years, with volatility metrics registering at 6.79%, 8.58%, and 9.68% for the same periods.
News Summary
Recent developments in the consumer staples sector highlight its performance resilience amid economic uncertainties. Data indicates a rise in emergency savings among U.S. adults, suggesting a shift toward financial security, which could bolster demand for essential consumer goods, benefiting ALTL's holdings like Procter & Gamble and Coca-Cola. Additionally, geopolitical tensions impacting crude oil prices could influence consumer staples through increased production costs. Trade negotiations between the US and Vietnam also pose potential challenges with tariff implications for retail giants such as Costco and Walmart within ALTL's portfolio. These macroeconomic factors underscore the strategic importance of sector-specific adaptations in the current market environment.
Analyst Rating: Strong Sell
The Pacer Lunt Large Cap Alternator ETF (ALTL) faces significant challenges that warrant a conservative investment stance. The fund's expense ratio of 0.60% is high, potentially detracting from net returns. Capital flows have been negative, with investor interest waning as reflected in the 7-day and 30-day net flow ratios. Performance over the short and medium-term is concerning, with negative returns over six months and three years, although the ETF managed a modest recovery over the past year. Despite its diversified holdings, the fund's concentration in specific sectors may not fully mitigate broader market risks, leading to a strong sell recommendation.
Backtest Scenario
A backtest of the Pacer Lunt Large Cap Alternator ETF (ALTL) from 2020 to 2023, during periods characterized by increased emergency savings, reveals insights into its performance dynamics. ALTL's strategy of rotating between high-beta and low-volatility stocks positions it to potentially benefit from both market growth and stability. However, the economic disruptions during this period, marked by the pandemic and shifts in consumer behavior, posed challenges. The ETF's unique methodology aimed at adapting to these conditions, yet broader market trends and sector rotations influenced its outcomes. Comparative analysis with benchmarks like the S&P 500 Index provides a nuanced understanding of ALTL's effectiveness during times of economic uncertainty.
Risk Outlook
The Pacer Lunt Large Cap Alternator ETF (ALTL) encounters a complex array of risks, particularly with its significant exposure to consumer staples, a sector sensitive to geopolitical and economic factors. Rising energy costs could inflate operational expenses for key holdings, while trade tensions pose risks of increased tariffs, potentially compressing margins for retail-heavy components like Walmart and Costco. Although the current low inflation environment stabilizes borrowing costs, unexpected geopolitical shifts or changes in trade policies could introduce volatility. Additionally, persistent negative net flow ratios suggest liquidity challenges, impacting overall investor sentiment and stability.
Conclusion
The Pacer Lunt Large Cap Alternator ETF (ALTL) presents a strategic investment opportunity for those seeking exposure to large-cap equities with a dynamic rotation approach between low volatility and high-beta stocks. While its strategy may appeal to aggressive investors, the current market conditions and the ETF's performance metrics suggest caution. Investors should closely monitor sector-specific developments and macroeconomic shifts to assess the fund's alignment with their risk tolerance and investment objectives.
Basic Information
The Pacer Lunt Large Cap Alternator ETF (ALTL), issued by Pacer Advisors, was launched on June 24th, 2020. It carries an expense ratio of 0.60%, which is relatively high compared to its peers. The ETF's top 15 holdings include companies such as , , and , with individual weights ranging from 1.11% to 1.47%. This ETF exhibits a diversified sector exposure, predominantly in Consumer Staples at 7.04%, followed by Health Care at 3.52%, and Communication Services at 2.58%. has experienced negative net flow ratios over the past week and month at -0.52% and -0.84%, respectively. Its average returns reflect a challenging performance: -2.82% over six months, 3.65% over one year, and -4.56% over three years, with volatility metrics registering at 6.79%, 8.58%, and 9.68% for the same periods.
News Summary
Recent developments in the consumer staples sector highlight its performance resilience amid economic uncertainties. Data indicates a rise in emergency savings among U.S. adults, suggesting a shift toward financial security, which could bolster demand for essential consumer goods, benefiting ALTL's holdings like Procter & Gamble and Coca-Cola. Additionally, geopolitical tensions impacting crude oil prices could influence consumer staples through increased production costs. Trade negotiations between the US and Vietnam also pose potential challenges with tariff implications for retail giants such as Costco and Walmart within ALTL's portfolio. These macroeconomic factors underscore the strategic importance of sector-specific adaptations in the current market environment.
Analyst Rating: Strong Sell
The Pacer Lunt Large Cap Alternator ETF (ALTL) faces significant challenges that warrant a conservative investment stance. The fund's expense ratio of 0.60% is high, potentially detracting from net returns. Capital flows have been negative, with investor interest waning as reflected in the 7-day and 30-day net flow ratios. Performance over the short and medium-term is concerning, with negative returns over six months and three years, although the ETF managed a modest recovery over the past year. Despite its diversified holdings, the fund's concentration in specific sectors may not fully mitigate broader market risks, leading to a strong sell recommendation.
Backtest Scenario
A backtest of the Pacer Lunt Large Cap Alternator ETF (ALTL) from 2020 to 2023, during periods characterized by increased emergency savings, reveals insights into its performance dynamics. ALTL's strategy of rotating between high-beta and low-volatility stocks positions it to potentially benefit from both market growth and stability. However, the economic disruptions during this period, marked by the pandemic and shifts in consumer behavior, posed challenges. The ETF's unique methodology aimed at adapting to these conditions, yet broader market trends and sector rotations influenced its outcomes. Comparative analysis with benchmarks like the S&P 500 Index provides a nuanced understanding of ALTL's effectiveness during times of economic uncertainty.
Risk Outlook
The Pacer Lunt Large Cap Alternator ETF (ALTL) encounters a complex array of risks, particularly with its significant exposure to consumer staples, a sector sensitive to geopolitical and economic factors. Rising energy costs could inflate operational expenses for key holdings, while trade tensions pose risks of increased tariffs, potentially compressing margins for retail-heavy components like Walmart and Costco. Although the current low inflation environment stabilizes borrowing costs, unexpected geopolitical shifts or changes in trade policies could introduce volatility. Additionally, persistent negative net flow ratios suggest liquidity challenges, impacting overall investor sentiment and stability.
Conclusion
The Pacer Lunt Large Cap Alternator ETF (ALTL) presents a strategic investment opportunity for those seeking exposure to large-cap equities with a dynamic rotation approach between low volatility and high-beta stocks. While its strategy may appeal to aggressive investors, the current market conditions and the ETF's performance metrics suggest caution. Investors should closely monitor sector-specific developments and macroeconomic shifts to assess the fund's alignment with their risk tolerance and investment objectives.

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