ETF Spotlight on the ProShares Large Cap Core Plus (NYSEArca: CSM), part of an ongoing series.
Assets: $205.1 million
Objective: The ProShares Large Cap Core Plus fund tries to reflect the performance of the Credit Suisse 130/30 Large Cap Index, which overweights attractive stocks while taking a short position in unfavorable stocks.
Holdings: Top holdings include Apple (NasdaqGS: AAPL) 2.0%, Exxon Mobil (NYSE: XOM) 1.6%, Berkshire Hathaway Inc. Class B (NYSE: BRK-B) 1.3%, Wells Fargo & Co (NYSE: WFC) 1.3% and Microsoft (NasdaqGS: MSFT).
What You Should Know:
- ProShares sponsors the fund.
- CSM has a 0.45% expense ratio.
- The fund is long 280 companies, and the top ten make up 12.3% of the overall portfolio.
- Market capitalization breakdown includes mega-caps 30.8%, large-caps 35.1% and mid-caps 33.8%.
- Sector allocations include basic materials 4.1%, consumer cyclical 11.0%, financial services 17.3%, real estate 3.0%, telecom services 3.6%, energy 9.5%, industrials 9.4%, tech 16.3%, consumer defensive 10.2%, healthcare 9.8% and utilities 5.8%.
- The ETF is up 4.6% over the past month, up 3.7% in the last three months and up 28.3% year-to-date.
- The underlying index overweights long positions in stocks with a favorable outlook but caps it to 30% overweight.
- The index also takes short positions in stocks with an unfavorable outlook but limits it to 30% short.
- CSM essentially takes a 130% long position and a 30% short position in a basket of large-cap stocks.
- The index reconstitutes holdings on a monthly basis.
Next page: The latest news
The Latest News:
- The equities rally is currently slowing on weak corporate earnings after hitting new record highs.
- The S&P 500 index, though, is experiencing its best rally in 16 years.
- “You have to pay attention to momentum in markets and that’s what this calendar year is showing,” Jeff Mortimer, director of investment strategy for BNY Mellon Wealth Management, said in a Bloomberg article. “Clients asked me, ‘Why don’t I take profit now?’ My theory is you can sell a lot higher later.”
- Fed President, though, cautions investors on stock valuations.
- “If you look at the valuation of stocks today compared to earnings and dividends and relative to historical averages, it’s not obvious that the stock market is overvalued,” San Francisco Fed President John Williams, said in a MarketWatch article. “In fact a lot of models will tell you that it’s undervalued given how strong profits have been.”
ProShares Large Cap Core Plus
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.