MALVERN, PA — Pacer ETFs is bringing autocallable investment strategies into exchange-traded funds through two actively managed products designed to generate monthly income while spreading investors’ exposure across multiple market entry points.
The Pacer Metaurus High Income Autocallable ETF (Nasdaq: ACBH) and Pacer Metaurus Enhanced Core Income Autocallable ETF (Nasdaq: ACBE), developed with Metaurus Advisors LLC, began trading Sept. 10.
Both funds gain exposure to an index designed to replicate a theoretical portfolio of autocallables with staggered entry points. The structure is intended to reduce the timing risk associated with investing through a single autocallable while producing a more consistent stream of income.
Each autocallable is linked to the Metaurus US Large Cap VolPath Index, but the two ETFs carry different thresholds for maintaining coupon payments and principal protection.
ACBH uses 70% coupon and maturity barriers. Coupons and principal protection therefore depend on the underlying reference index remaining at or above 70% of its initial level on the applicable observation date or at maturity.
ACBE uses 50% barriers, allowing the reference index to decline further before those protections are lost.
Both strategies have monthly observation dates, five-year maturities and an initial six-month period during which the autocallables cannot be called. They also include a coupon-memory feature under which missed coupons can potentially be paid later if required conditions are subsequently met.
“The outcome of a single autocallable can depend heavily on its terms and when an investor enters the market,” Pacer ETF Distributors President Sean O’Hara said. “By bringing these strategies into an ETF, we’re giving investors a more accessible way to pursue the income potential of autocallables while reducing reliance on a single entry point.”
The products extend Pacer and Metaurus’ partnership beyond dividend-focused strategies and into structured investment exposure.
The firms already work together on the Pacer Metaurus US Large Cap Dividend Multiplier 400 ETF (QDPL), which seeks to provide four times the dividend yield of the S&P 500, and the Pacer Metaurus Nasdaq-100 Dividend Multiplier 600 ETF (QSIX), which targets six times the ordinary dividend yield of the Nasdaq-100.
The new funds give Pacer another vehicle for targeting investors and financial advisers seeking portfolio income, while packaging an autocallable strategy within the tradable ETF structure.
“This launch builds on more than five years of collaboration, combining Metaurus’ structuring and derivatives expertise with Pacer’s powerful distribution platform,” Metaurus Chief Investment Officer Rick Silva said.
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