Hello, ETF fans! Following the great engagement from our last video, we’re back with another deep dive into a reader-requested ticker. A special shout-out to Dan Ives for sharing our previous analysis, which brought in a wave of new requests. Keep them coming! Share the tickers you’re curious about on our social media channels, and we’ll continue to break them down, one trading day at a time.
Today’s request comes from “The Godfather” on X, who asked for an under-the-hood look at a newer offering from Pacer: the Data and Digital Revolution ETF, ticker symbol TRFK. Let’s jump right in.
Sizing Up the Competition in Disruptive Tech
To get a feel for where TRFK fits in the market, we started in our ETF dashboard, navigating to the “Equity Thematic” category. TRFK sits within the “Disruptive Tech” segment, a space with 59 ETFs and over $243 billion in assets.
Specifically, it’s categorized under “Broad-Based Disruptive Tech.” The Pacer Data and Digital Revolution ETF currently holds about $159 million in assets under management (AUM).
To see how unique TRFK is, we used our overlap analyzer tool to compare it with 14 other funds in the same subgroup. The results were fascinating.
- It shares 13 names (a 22% overlap) with J-TECH.
- It has 10 names in common (nearly 30% overlap) with the Dan Ives ETF we analyzed previously.
- The overlap with other funds like TEKX is minimal, at under 2%.
What’s truly striking is the diversity within this “disruptive tech” space. Out of all the holdings across these 15 ETFs, only one company is held in 14 of them. Meanwhile, a staggering 242 companies are held in only one of the 15 funds. This highlights just how varied the strategies are in this corner of the market.
A Closer Look at TRFK’s Portfolio
The Pacer Data and Digital Revolution ETF is a rules-based strategy that follows the Pacer Index. It uses a modified market-cap weighting to identify companies that generate significant revenue from data-centric and disruptive technologies like AI.
A quick glance at its recent flows shows growing interest. The fund saw $42 million in new inflows last month and has already attracted another $10 million this month.
Using the portfolio visualizer, we can see the fund’s composition. Breaking it down by industry reveals:
- Semiconductors: 35%
- Software: 30%
- Communications Equipment: and other related tech industries make up the rest.
Valuations: What’s Under the Hood?
For high-growth and disruptive tech funds, looking beyond standard price-to-earnings (P/E) ratios is crucial. One of my preferred metrics is the forward price-to-sales (P/S) ratio, as it can provide a clearer picture of valuation when companies are reinvesting heavily and may not have substantial current earnings.
We set up a filter to identify companies within TRFK’s 81 holdings that are trading at a forward P/S ratio of 10 or higher—a level where valuations can start to look stretched.
The results were eye-opening.
- 15 of the 81 companies in the portfolio have a forward P/S ratio greater than 10.
- These 15 companies account for 46% of the portfolio’s total weight.
This isn’t necessarily a red flag—high-growth spaces often command premium valuations. However, it’s a critical piece of information for any potential investor to be aware of. It underscores that this is a portfolio positioned for aggressive growth, and with that comes higher valuation risk.
Your Turn!
I hope this breakdown of TRFK was insightful. It’s another great example of how you can use portfolio visualization tools to look past the marketing and understand what you’re really buying.
If you enjoyed this analysis, give it a like and share it! Most importantly, if there’s an ETF you want us to put under the microscope next, drop the ticker on our social media channels. As long as the requests keep coming, we’ll keep the analysis flowing.
Have a great weekend, everyone!
