Large-Scale ETF Exit Signals Broader Concerns Over Trend-Following Strategies
MY Wealth Management Inc. has completely exited its position in the Pacer Funds Trust - Pacer Trendpilot 100 ETF ($PTNQ), according to a recent SEC filing. The investment advisor liquidated 128,858 shares valued at approximately $10.02 million during the first quarter of 2026, representing a full closure of what had been a significant holding in the fund. The position accounted for 8.8% of MY Wealth Management's assets under management, making this a material decision that underscores growing skepticism around trend-following investment strategies in an evolving market environment.
The decision to completely divest from $PTNQ comes at a time when active investment strategies are facing renewed scrutiny from both institutional and retail investors. MY Wealth Management's elimination of this substantial position—coupled with its public disclosure through SEC filings—signals that even professional advisors managing significant capital are reconsidering their exposure to niche, factor-based ETFs that have struggled to keep pace with broader market benchmarks.
The Performance Gap and Strategic Underperformance
PTNQ's trend-following methodology has been a consistent drag on returns relative to passive alternatives. The fund employs a quantitative approach designed to identify and capitalize on market momentum, yet this strategy has underperformed traditional passive index funds, particularly when compared to the Invesco QQQ Trust ($QQQ), which tracks the Nasdaq-100 and captures broad exposure to technology-heavy equities.
Key performance considerations include:
- Strategy Type: Trend-following, momentum-based approach versus buy-and-hold passive indexing
- Comparative Performance: Consistent underperformance versus $QQQ over extended periods
- Asset Base: $PTNQ manages significant assets, but the trend-following mechanism has not translated to competitive returns
- Fee Structure: Active management costs associated with trend-following strategies typically exceed those of passive alternatives
The gap between $PTNQ's performance and simpler passive alternatives like $QQQ reflects a fundamental challenge facing actively managed and factor-based ETFs: in diversified, technology-driven markets with strong long-term trends, the cost of sophisticated trend-detection algorithms and frequent trading often outweighs the benefits of tactical positioning. MY Wealth Management's decision reflects a pragmatic reassessment of whether the complexity and cost of trend-following justify their implementation within a diversified portfolio.
Market Context: The Ongoing Shift Away From Complex Strategies
This liquidation occurs within a broader market trend toward consolidation around core passive holdings. The investment advisory industry has experienced a multi-decade shift toward lower-cost index funds and ETFs, accelerated by technological advances that have made passive investing increasingly accessible and cost-effective.
The competitive landscape for specialty ETFs has become increasingly challenging:
- Passive dominance: Index funds and ETFs continue to capture growing market share, with firms like Vanguard, BlackRock ($BLK), and State Street ($STT) commanding dominant positions
- Factor-based performance: While factor-investing (including momentum) was popular in the 2010s, empirical evidence on long-term outperformance remains mixed
- Fee pressure: Higher fee structures associated with active and complex strategies face headwinds as investors prioritize cost efficiency
- Regulatory environment: SEC scrutiny of performance claims and fee justification has intensified, making it harder for niche ETF providers to defend premium pricing
Pacer Funds, the sponsor of $PTNQ, operates in a crowded segment where differentiation is difficult and performance claims are subject to intense investor scrutiny. The exit by MY Wealth Management—likely one of the more sophisticated institutional users of the fund—suggests that even professional allocators are concluding that trend-following doesn't deliver sufficient alpha to justify its role in modern portfolios.
The broader market environment has also shifted in ways unfavorable to momentum-based strategies. Extended bull markets, especially those driven by structural tailwinds in technology and artificial intelligence, reward patient buy-and-hold investors more consistently than tactical trend-followers who may exit positions prematurely or incur unnecessary transaction costs.
Investor Implications: What This Means for Market Participants
For investors holding $PTNQ directly or through advisory accounts, MY Wealth Management's decision carries several important implications:
Potential Outflows and Fund Pressure: Large institutional exits can signal broader fund outflows, which may result in increased portfolio turnover costs being borne by remaining shareholders. A material reduction in assets under management at $PTNQ could compress expense ratios further or accelerate investor redemptions.
Validation of Index Strategy: The move reinforces academic and practical evidence that passive, low-cost index funds remain the superior choice for most investors over longer time horizons. This validates the multi-decade thesis that has driven trillions into passive vehicles and away from active management.
Broader Implications for Specialty ETFs: This case exemplifies the headwinds facing niche ETF providers. Specialty funds must demonstrate persistent, risk-adjusted outperformance to justify their existence; when they fail to do so, even well-managed advisory firms will reallocate capital to simpler, cheaper alternatives.
Fees and Value Proposition: The liquidation underscores that professional advisors increasingly scrutinize whether complex strategies justify their cost structures. For investors or advisors evaluating their own holdings, this is a moment to rigorously assess whether factor-based or actively managed positions are earning their fees.
Looking Forward: Implications for the ETF Landscape
MY Wealth Management's complete exit from $PTNQ reflects a mature market making disciplined decisions about capital allocation. The decision sends a clear message: in an era where passive indexing has become optimized through technology and scale, specialty strategies must clear a high bar to justify their continued use in professional portfolios.
For the broader ETF industry, particularly providers of trend-following and momentum-based funds, this liquidation exemplifies ongoing competitive pressure. As institutional capital increasingly concentrates around core index positions, funds that cannot demonstrate consistent outperformance will face persistent redemption pressure and potential viability challenges.
Investors should view this exit as validation of a simple principle: cost and consistency matter more than complexity. Unless a fund can demonstrably deliver superior risk-adjusted returns over extended periods, the burden of proof lies with the fund sponsor and advisor to justify maintaining the position. MY Wealth Management's decision to close entirely, rather than reducing exposure gradually, suggests the firm concluded that $PTNQ no longer met its investment criteria—a determination that may resonate across the advisory industry and accelerate capital consolidation toward core passive holdings.