Pacer American Energy Independence ETF Stock Price, News & Analysis

Pacer American Energy Independence ETF (USAI) is an exchange-traded fund listed on the NYSE Arca that follows a rules-based strategy. According to Pacer ETFs, the fund is designed to give investors exposure to the growth opportunity associated with U.S. energy independence by focusing on midstream energy infrastructure in the United States and Canada.

The fund targets midstream energy companies that Pacer describes as benefiting from increasing demand for reliable domestic energy processing, transportation, storage and distribution. The strategy emphasizes midstream businesses that use a contract-based business model, which Pacer notes can potentially generate steadier and more predictable cash flows than models tied more directly to upstream production or downstream refining and marketing.

Investment focus and underlying index

USAI seeks to track the American Energy Independence Index, which is owned by SL Advisors, LLC and calculated and maintained by S&P Opco, LLC, a subsidiary of S&P Dow Jones Indices LLC. Pacer states that the ETF is not sponsored, endorsed, sold or promoted by SL Advisors, and that SL Advisors makes no representation or warranty regarding the advisability of investing in the fund. The index relationship is intended to give investors a transparent, rules-based reference for the fund’s exposure to midstream energy infrastructure related to American energy independence.

Pacer highlights that the fund’s focus on midstream energy infrastructure can reduce its correlation to oil price volatility compared with strategies more concentrated in upstream or downstream segments. By concentrating on contract-based midstream companies, the ETF is positioned by Pacer as a way to seek consistent income from energy infrastructure even when broader energy markets experience disruption.

Role of U.S. and Canadian midstream energy

The companies targeted by USAI are described by Pacer as U.S. and Canadian midstream energy businesses that support domestic energy independence. These companies are involved in the processing, transportation, storage and distribution of energy, which are key functions between production and end use. Pacer notes that demand for U.S. energy infrastructure has been supported by the power needs of AI-driven data centers, which require significant and reliable energy supplies.

By focusing on this part of the energy value chain, USAI is intended to give investors access to businesses that Pacer characterizes as benefiting from structural demand for domestic energy infrastructure. The emphasis on midstream operations and contract-based revenue arrangements is central to how Pacer describes the fund’s investment approach.

Income characteristics and distributions

Pacer ETFs has announced that the Pacer American Energy Independence ETF pays monthly distributions. In a Business Wire release, Pacer stated that USAI’s monthly distribution was increased by $0.04, from $0.12 to $0.16, effective January 2025. Pacer links the fund’s ability to deliver consistent income to its focus on midstream energy infrastructure and contract-based business models, while also emphasizing that an investment in the fund is subject to investment risk, including the possible loss of principal.

As with other ETFs, USAI’s shares can be bought and sold on an exchange through a brokerage account, and Pacer notes that brokerage commissions and ETF expenses will reduce investment returns. The firm also highlights that there can be no assurance that an active trading market for ETF shares will be developed or maintained.

Issuer background and fund family context

Pacer American Energy Independence ETF is part of the broader Pacer ETFs lineup. Pacer describes itself as a strategy-driven exchange-traded fund provider with multiple fund families, including the Pacer Trendpilot Series, Pacer Cash Cows ETF Series, Pacer Custom ETF Series, Pacer Leaders ETF Series, Pacer Factor ETF Series and Pacer Swan SOS ETF Series. Within this context, USAI represents Pacer’s approach to energy infrastructure and American energy independence through a rules-based, index-tracking ETF.

Pacer notes that it is the U.S. issuer of a range of ETFs and that its products are distributed by Pacer Financial, Inc., a member of FINRA and SIPC and an affiliate of Pacer Advisors, Inc. The American Energy Independence Index is identified as a trademark of SL Advisors, LLC, and Pacer states that the index is calculated by S&P Dow Jones Indices under contract with SL Advisors.

Risk considerations

Pacer emphasizes that investing in USAI involves risks detailed in the fund’s prospectus. The disclosures identify potential risk factors such as concentration in the energy infrastructure industry, currency exchange rate risk, ETF-specific risks, equity market risk, foreign securities risk, geographic concentration risk, index provider risk, risks related to master limited partnerships (MLPs), non-diversification risk, passive investment risk, sector risk, small and mid-sized company stock risk, tax risk, tracking error risk and special risks of exchange-traded funds. Pacer also notes that the fund is not insured by the FDIC, may lose value and is not bank guaranteed.

Because USAI is described as a passive, index-based strategy, it is subject to the performance and construction of the American Energy Independence Index. Pacer’s disclosures indicate that the index provider and calculation agent have no responsibility for managing the fund and do not guarantee the results of investing in USAI.

Use cases for investors

According to Pacer’s description, investors may consider USAI if they are looking for ETF exposure to U.S. and Canadian midstream energy infrastructure linked to American energy independence. The focus on contract-based midstream companies is intended to align the fund with businesses that Pacer associates with steady cash flows and income potential, while the index-based, rules-driven approach provides a defined methodology for selecting and weighting holdings tied to the American Energy Independence Index.

Pacer’s disclosures stress that prospective investors should carefully review the fund’s investment objectives, risks, charges and expenses in the prospectus before investing, and that an investment in the fund can result in the loss of principal.