PACER BENCHMARK REAL ESTATE SECTOR STRATEGIES - Institutional Presentation
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Institutional Presentation
PACER BENCHMARK REAL ESTATE SECTOR STRATEGIES
Thematic Growth
FOR INVESTMENT PROFESSIONAL USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC.PACER BENCHMARK REAL ESTATE SCTRSM INDEX SECURITIES SELECTION
The Pacer Benchmark Real Estate SCTRSM ETFs aim to hold global developed market companies that generate the majority of
their profits from real estate operations in specific sectors.
1
Benchmark Composite Real Estate SCTRSM
Index
The global developed equity market is screened for
companies generating at least 85% of revenues from
ETF Intraday real estate operations to develop the index universe.
Inception Benchmark Total Indicative Rebalanced &
ETF Name ETF Ticker Date Index Expenses Value Ticker CUSIP Reconstituted
Pacer Benchmark
FTSE Nareit
2
Data & Infrastructure
SRVR 5/15/2018 All Equity 0.60% SRVR.IV 69374H741 Quarterly Sector Screen
Real Estate SCTRSM
REITs Index Qualified companies are screened by:
ETF
• Property type
• Tenant type
• Revenue type
Pacer Benchmark FTSE Nareit To assign companies to their proper sector
Industrial Real INDS 5/14/2018 All Equity 0.60% INDS.IV 69374H766 Quarterly
Estate SCTRSM ETF REITs Index
3
The Index
• Companies must meet a market cap and liquidity
threshold
• Weighted by modified market cap
• Rebalanced and Reconstituted Quarterly
FOR INVESTMENT PROFESSIONAL USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC. 2THEMATIC GROWTH: 5G, CLOUD COMPUTING, AND E-COMMERCE
THE NEW TECHNOLOGY REVOLUTION
Buzz words like 5G, the Internet of Things, and the Cloud have been discussed for years. It is not until recently that this technology has started to take shape.
THE INTERNET BY 2022
More Internet More Devices & Faster Broadband More Video
Internet of Things Users Connections Speeds Viewing
Autonomous
Vehicles
AI
The Cloud 1.7 8.6 46.2 74% of
2017
5G Billion Billion Mbps Traffic
E-Commerce 2.6 13.1 98.8 84% of
2022
Billion Billion Mbps Traffic
Streaming
Source: Cisco VNI Global IP Traffic Forecast, 2017-2022
• 5G speeds will be 13 times higher than the average mobile
connection by 2023. The average 5G connection speed will reach 575 Mbps
by 2023.
• Internet of Things – the interconnection between everyday objects and your
computing devices. Your doorbell ringing can now be announced through your Amazon
Alexa or through an app on your phone.
• Autonomous Vehicles – a self-driving car that may not even need a human inside to TO SUPPORT THIS INTERNET DEMAND:
operate. • $230 Billion
• Artificial Intelligence – robots, computer systems, or other inanimate objects soon Global Data Center Infrastructure market is projected to grow at a CAGR (compound
will have the ability to perform human tasks. annual growth rate) of 6.79% reaching a total market size of US$230.169 billion in
• The Cloud – a place where data is stored and accessed by internet users. 2025 from US$155.201 billion in 2019.1
• E-Commerce – the online presence of buying, delivering and selling goods. • $325 Billion
• 5G – fifth generation wireless will allow for larger amounts of data to be transported Increase in infrastructure spending for 5G by 2025
in shorter amounts of time.
• Streaming – the act of downloading or receiving data, specifically audio and video
material, over an internet network continuously while the video plays.
www.researchandmarkets.com
(1)
FOR INVESTMENT PROFESSIONAL USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC. 3THE ECOSYSTEM OF TECHNOLOGY’S MISSION CRITICAL ASSETS
The economy relies on an increasingly sophisticated foundation of: Data Centers, Fiber Optic Networks and Wireless Towers to power cloud-based platforms, 5G
networks, and e-commerce.
Data Centers Fiber Optic Networks Wireless Towers Distribution Centers
The cloud physically exists in the form of Streaming providers buy bandwidth from Towers and antenna are key in Large warehouses, which contain
data centers. Massive warehouses are fiber optic networks to deliver content transferring data across the globe. distribution centers, exist all over
home to hundreds of servers, allowing to the service providers present in Today’s technology demands reliability the country and allow for e-commerce
for information to pass from device to individual networks. and speed. Now, wires are not needed to distributors to deliver goods to your door
device. transfer data. as quickly and efficiently as possible.
As soon as an online order is placed,
the surrounding infrastructure begins to
work.
Companies included in the Companies included in the
Benchmark Data & Infrastructure Real Estate SCTR Index enable: Benchmark Industrial Real Estate SCTR Index enable:
• Working from home • E-commerce distribution
• Streaming & Gaming • Cold storage
• Video Conferencing • Import and export of goods
FOR INVESTMENT PROFESSIONAL USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC. 4DATA AND INFRASTRUCTURE REAL ESTATE: THE BACKBONE OF TECH
In order for this new wave of technology to come to fruition, the digital and physical infrastructure must be built out.
THE SPENDERS THE RECEIVERS
A “spender” is the network operator and cloud computing provider that incur expense to provide: A “receiver” is the owner of the tech infrastructure, such as:
• 5G communication • Data centers
• Cloud services • Cell tower companies
• Data services
These companies earn lease revenue from the spenders. Each mobile network has driven a
A data center is the physical location of the cloud. As the demand for faster service escalates, higher level of spending. The 5G build out will require an increase in spending for Network
network operators and cloud computing providers have been tasked with this build out. The Carriers which may directly benefit the Cell Tower REITs.
growth in data center spending by leading cloud providers has driven higher revenue growth for
Data Center REITs.
DATA CENTER REVENUE AND CLOUD SPENDING 5G CELL TOWER REVENUE VS TELECOM SPENDING
$180,000 60.00 16,000
Capex of Major Companies Driving Data center-Related Capex 14,000 ATT/Verizon Spending 4G
$160,000 Estimated Capex of Major Companies Driving Data center-Related Capex 14,000
1G 5G 5G
Major Data Center REITs Revenue 50.00
$140,000
12,000 2G American Tower & Crown
12,000
Castle Revenue
Data Center Revenue (Million)
3G
AMT CCI Revenue (Million)
Revenue of Major Data
4G
ATT VZ CapEX (BIllion)
$120,000 Center REITs 10,000 40.00
10,000
ATT/Verizon Spending
CapEx (Million)
$100,000
8,000
30.00
3G 8,000
$80,000
6,000
2G 6,000
$60,000 20.00
4,000 4,000
$40,000
1G
10.00
2,000 2,000
$20,000 American Tower &
Crown Castle Revenue
$0 0 0.00 0
CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021E CY2022E 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
*Capex is based on estimation for 2020. Data center revenue is last 12 months as of September 2020.
Source: FactSet, RBC
FOR INVESTMENT PROFESSIONAL USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC. 5BENCHMARK DATA & INFRASTRUCTURE REAL ESTATE SCTRSM INDEX
Retrospectively calculated Benchmark Data & Infrastructure Real Estate SCTRSM Index performance is shown net of fees.
HYPOTHETICAL GROWTH OF $10,0001 HISTORICAL PERFORMANCE, VOLATILITY
3/16/2007 – 9/30/2021 COMPARISON AND UPSIDE/DOWNSIDE CAPTURE
(%)1
3/16/2007 – 9/30/2021
$70,000
Benchmark Data &
Benchmark Data & Infrastructure Real Estate SCTRSM Index Infrastructure Real FTSE Nareit All Equity
FTSE Nareit All Equity REITs Index Estate SCTRSM Index REITs Index
$60,000 Annualized
12.14 6.41
Average Return
$52,972 Annualized
24.51 33.20
$50,000 Volatility
Upside
86.71 100.00
Capture
$40,000 Downside
62.15 100.00
Capture
$30,000
$24,693
$20,000
$10,000
$0
3/16/2007 3/16/2009 3/16/2011 3/16/2013 3/16/2015 3/16/2017 3/16/2019 3/16/2021
All Indexes shown are Total Return Indexes.
(1)
Source: Benchmark and Bloomberg. Nasdaq is the independent index calculation agent. The hypothetical backtested index performance of the Benchmark Data & Infrastructure Real Estate SCTR Index is shown net of fees
and reflects the reinvestment of dividends. The annual total expense is 0.60%. The Index was released on 12/28/2017. Any data shown prior to this date is hypothetical, retrospectively calculated, and is based on rules-
based criteria applied retroactively with the benefit of hindsight and knowledge of factors that may have positively affected its performance, and cannot account for all financial risk or market and economic factors that may
affect the actual performance. The actual performance of the Index may vary significantly from the backtested index data. The results shown are hypothetical and do not reflect actual returns.
PAST PERFORMANCE (WHETHER RETROSPECTIVELY CALCULATED OR ACTUAL HISTORICAL) IS NOT INDICATIVE OF FUTURE RESULTS. YOU CANNOT INVEST DIRECTLY IN AN INDEX.
FOR INVESTMENT PROFESSIONAL USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC. 6BENCHMARK DATA & INFRASTRUCTURE REAL ESTATE SCTRSM INDEX
TOP 10 HOLDINGS
as of 9/30/2021
Company Sub-Sector Weight (%) Area it Effects
Equinix, Inc. Data Infrastructure 15.13 AI, Big Data, IoT
American Tower Corporation Tech Infrastructure: Telecommunications 14.68 5G, IoT, Mobile Data
Crown Castle International Corp Tech Infrastructure: Telecommunications 14.38 5G, IoT, Mobile Data
CyrusOne Inc. Data Infrastructure 4.87 AI, Big Data, IoT
Lamar Advertising Company Class A Tech Infrastructure: General 4.83 Media, Mobile Data
SBA Communications Corp. Class A Tech Infrastructure: Telecommunications 4.46 5G, IoT, Mobile Data
Iron Mountain, Inc. Data Infrastructure 4.41 AI, Big Data, IoT
Cellnex Telecom S.A. Tech Infrastructure: Telecommunications 4.37 5G, IoT, Mobile Data
Digital Realty Trust, Inc. Data Infrastructure 4.27 AI, Big Data, IoT
GDS Holdings Ltd. Sponsored ADR Class A Data Infrastructure 3.87 AI, Big Data, IoT
Total 75.27
INDEX CHARACTERISTICS SUB-SECTOR BREAKDOWN
as of 9/30/2021 as of 9/30/2021
9.91% Tech Infrastructure:
Weighted Average Market Cap ($mil) 47,468.21 General
Dividend Yield (%) 2.09
Price to Funds From Operations (FFO) 31.38
Source: FactSet, Benchmark
44.46% Data Infrastructure 45.63% Tech
Infrastructure:
Telecommunications
FOR INVESTMENT PROFESSIONAL USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC. 7INDUSTRIAL REAL ESTATE: RAPID GROWTH AND EXPANSION
Over the past decade, there has been significant incremental demand for space.
INCREMENTAL DEMAND FOR SPACE CONSUMPTION EVOLUTION
E-Commerce users require 3x the logistics space, or more, as compared with brick-and-mortar. Old Model New model
• Price-driven • Data-driven (Labor & Consumer)
Projected incremental 406 million square feet through 2022 needed to keep up with expected • Distribution-market focused • Consumption-market focused
growth in e-commerce sales1 and related supply chain reconfiguration.2 • Designed for big box retail • Designed for the consumer
• Rigid • Dynamic
200
Fulfillment Distribution Center Sortation Center
Typical range 500k - 1.0m SF Typical size 200k - 500k SF
155
150
134
Millions of Square Feet
117
100
100
60 64
49
50 38
42 Delivery Station Prime Now Hub
31 31 Typical size 50k - 200k SF Typical size 25k - 50k SF
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Assumes E-comm sales growth of 15%, which is consistent with the actual 2018 growth rate of 14% and actual 2019 growth rate of 15%.
(1)
Metric per CBRE, Cushman & Wakefield, NAIOP
(2)
FOR INVESTMENT PROFESSIONAL USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC. 8BENCHMARK INDUSTRIAL REAL ESTATE SCTRSM INDEX
Retrospectively calculated Benchmark Industrial Real Estate SCTRSM Index performance is shown net of fees.
HISTORICAL PERFORMANCE, VOLATILITY
HYPOTHETICAL GROWTH OF $10,0001 COMPARISON AND UPSIDE/DOWNSIDE CAPTURE
3/16/2007 – 9/30/2021
(%)1
3/16/2007 – 9/30/2021
$50,000
Benchmark Industrial
Benchmark Industrial Real Estate SCTRSM Index Real Estate SCTRSM FTSE Nareit All Equity
$45,000 FTSE Nareit All Equity REITs Index Index REITs Index
Annualized
9.96 6.41
$40,000 $39,797 Average Return
Annualized
34.13 33.20
$35,000 Volatility
Upside
108.21 100.00
$30,000
Capture
Downside
96.14 100.00
Capture
$25,000 $24,693
$20,000
$15,000
$10,000
$5,000
$0
3/16/2007 3/16/2009 3/16/2011 3/16/2013 3/16/2015 3/16/2017 3/16/2019 3/16/2021
All Indexes shown are Total Return Indexes.
(1)
Source: Benchmark and Bloomberg. Nasdaq is the independent index calculation agent. The hypothetical backtested index performance of the Benchmark Industrial Real Estate SCTR Index is shown net of fees and reflects
the reinvestment of dividends. The annual total expense is 0.60%. The Index was released on 12/28/2017. Any data shown prior to this date is hypothetical, retrospectively calculated, and is based on rules-based criteria
applied retroactively with the benefit of hindsight and knowledge of factors that may have positively affected its performance, and cannot account for all financial risk or market and economic factors that may affect the
actual performance. The actual performance of the Index may vary significantly from the backtested index data. The results shown are hypothetical and do not reflect actual returns.
PAST PERFORMANCE (WHETHER RETROSPECTIVELY CALCULATED OR ACTUAL HISTORICAL) IS NOT INDICATIVE OF FUTURE RESULTS. YOU CANNOT INVEST DIRECTLY IN AN INDEX.
FOR INVESTMENT PROFESSIONAL USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC. 9BENCHMARK INDUSTRIAL REAL ESTATE SCTRSM INDEX
TOP 10 HOLDINGS SUB-SECTOR BREAKDOWN
as of 9/30/2021 as of 9/30/2021
Company Sub Sector Weight (%)
Prologis, Inc. Industrial 15.01
18.62% Warehouse
Duke Realty Corporation Industrial 14.69
Life Storage, Inc. Warehouse 10.25
PS Business Parks, Inc. Industrial 4.82
Monmouth Real Estate Investment
Industrial 4.75
Corporation Class A
Terreno Realty Corporation Industrial 4.58
Lexington Realty Trust Industrial 4.56 81.38% Industrial
Innovative Industrial Properties Inc Warehouse 4.55
First Industrial Realty Trust, Inc. Industrial 4.50
STAG Industrial, Inc. Industrial 4.49
Total 72.20
INDEX CHARACTERISTICS
as of 9/30/2021
Weighted Average Market Cap ($mil) 20,472.62
Dividend Yield (%) 2.68
Price to Funds From Operations (FFO) 29.43
Source: FactSet, Benchmark
FOR INVESTMENT PROFESSIONAL USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC. 10COMPLEMENT AN EXISTING EQUITY POSITION
The Pacer Benchmark Real Estate Sector ETFs are designed as an alternative strategy for an existing equity portfolio.
As an alternative strategy alongside alpha and beta equities, investors may experience reduced volatility and downside risk.
SAMPLE PORTFOLIO ALLOCATION PROFILE OF USERS
Traditional alternative sleeve:
• Broad based real estate
40% • Real estate that is growth oriented
Bonds
50% 60%10%
Equity
Equity Alternatives Fixed income replacement:
• Potentially higher yield
• Not as sensitive to rising rates
Core equity holding:
1. REITs • Complement long only stocks
(Traded & Non-Traded) • Less volatility
10% Alternatives 2. Commodities • Potentially higher dividend yield
3. Hedge Funds
4. Private Equity
FOR INVESTMENT PROFESSIONAL USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC. 11LIVE PERFORMANCE
Total Returns (%) as of 9/30/21 Total Returns (%) as of 9/30/21
Total Fund Since Fund
Ticker Expenses Inception 1 Month 3 Month YTD 1 Year 3 Year 5 Year Inception
Pacer Benchmark Industrial Real NAV -6.82 2.17 20.27 32.74 22.70 N/A 20.82
Estate SCTR ETF
INDS 0.60% 5/14/18
Market Price -6.71 2.08 20.38 32.62 22.71 N/A 20.81
Benchmark Industrial Real Estate SCTR Index -6.90 2.25 20.87 33.63 23.71 N/A 21.73
Pacer Benchmark Data & NAV -6.86 -3.07 9.56 11.91 16.18 N/A 16.71
Infrastructure Real Estate SCTR ETF
SRVR 0.60% 5/15/18
Market Price -6.96 -3.22 9.70 11.75 16.10 N/A 16.66
Benchmark Data & Infrastructure Real Estate SCTR Index -6.78 -2.85 9.96 12.59 17.03 N/A 17.61
Returns less than 1 year are cumulative. Returns greater than 1 year are annualized.
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. Visit http://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.
NAV (net asset value) is the value of one share of the Fund calculated daily. The NAV return is based on the NAV of the Fund. It may not reflect the actual return for the investor.
Market Price is the price investors can buy and sell ETF shares for in the stock market and is used to calculate market return. It is based on the price at the NYSE listed exchange market close. This is when NAV is
determined for most ETFs. If shares trade at another time, the return may differ. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV
respectively.
BEFORE INVESTING YOU SHOULD CAREFULLY CONSIDER THE FUNDS’ INVESTMENT To learn more about the Index methodology, please visit www.investbenchmark.com or call 877-337-0500.
OBJECTIVES, RISKS, CHARGES, AND EXPENSES. THIS AND OTHER INFORMATION IS
IN THE PROSPECTUS. A COPY MAY BE OBTAINED BY VISITING DEFINITIONS OF CERTAIN DEFINED TERMS USED HEREIN:
WWW.PACERETFS.COM OR CALLING 1-877-337-0500. PLEASE READ THE Annualized average return represents the calculated hypothetical rate of return that, if cumulatively
applied to each relevant annual period during the time period indicated, would result in the actual cumulative
PROSPECTUS CAREFULLY BEFORE INVESTING. rate of return for the entire period.
An investment in the Funds is subject to investment risk, including the possible loss of principal. Pacer ETF Upside/downside capture ratio shows you whether a given fund has outperformed--gained more or lost
shares may be bought and sold on an exchange through a brokerage account. Brokerage commissions less than--a broad market benchmark during periods of market strength and weakness.
and ETF expenses will reduce investment returns. There can be no assurance that an active trading market Annualized volatility is based on monthly returns from the most recent date indicated on the page and
for ETF shares will be developed or maintained. The risks associated with this fund are detailed in the expressed as a standard deviation percentage. Standard deviation is a measure of volatility and illustrates the
prospectus and could include factors such as calculation methodology risk, concentration in real estate risk, extent of variation (whether higher or lower) that exists from the average given set of results. A low standard
currency exchange rate risk, equity market risk, ETF risks, foreign securities risk, geographic concentration deviation indicates that the results tend to be very close to the average result (a low degree of volatility). In
risk, international operations risk, large and mid-capitalization investing risk, limited operating history, contrast, a high standard deviation indicates that the results are spread out over a large range of outcomes
non-diversification risk, passive investment risk, real estate companies risk, REIT investment risk, small- (a high degree of volatility). Because the standard deviation is based on historical data, it may not predict
capitalization companies risk, tax risk, tracking risk, and/or special risks of exchange traded funds. variability in annualized performance of the Pacer ETFs in the future.
Price to funds from operations is a measure of the cash generated by a REIT; real estate companies use
Benchmark Data & Infrastructure Real Estate SCTR Index and Benchmark Industrial Real Estate SCTR Index FFO as an operating performance benchmark. FFO is calculated by adding depreciation and amortization to
are trademarks of Benchmark Investments, LLC and have been licensed for use by Pacer Advisors, Inc. The earnings and then subtracting any gains on sales.
Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF and Pacer Benchmark Industrial Real Estate
SCTR ETF are not sponsored, endorsed, sold or promoted by Benchmark Investments, LLC and Benchmark
Investments, LLC makes no representation or warranty regarding the advisability of investing in this Pacer
Benchmark Data & Infrastructure Real Estate SCTR ETF and Pacer Benchmark Industrial Real Estate SCTR
PACER ETFs
ETF.
Distributor: Pacer Financial, Inc., member FINRA, SIPC, an affiliate of Pacer Advisors, Inc.
FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR USE WITH THE INVESTING PUBLIC.
NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED 877-337-0500 § www.paceretfs.com
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