Last Friday was Valentine’s Day and as amorous spenders know, it’s big business for retail. In fact, the National Retail Federation (NRF) forecast that 2020 Valentine’s Day spending would was likely to increase 32% year-over-year.

Valentine’s is also big businesses for pets so it may not have been a coincidence that the ProShares Pet Care ETF (CBOE: PAWZ), the first ETF dedicated to the pet care industry and related investment opportunities, jumped 1.56% last week.

PAWZ includes sectors such as veterinary pharmaceuticals, diagnostics, services, and product distributors; pet and pet supply stores, and pet food and supply manufacturing. Healthcare and retail stocks make up a significant portion of the PAWZ roster and the ProShares ETF has the potential to outperform traditional funds tracking those sectors.

Paw Over Pet Care Love

Data confirm that PAWZ was a credible Valentine’s Day play.

“People are expected to spend $1.7 billion on their furry Valentines this year, according to the National Retail Federation, up 17% from what these animal lovers were dropping in 2010,” reports Nicole Lyn Pesce for MarketWatch.

Data confirm that 2020 could be a big year for PAWZ and its components. One of the more compelling data points indicates about two-thirds of American households have at least one pet.

“The NRF notes that more than one in four people (27%) will treat their pets to a Valentine’s Day gift this year, which is the highest figure in the history of its survey. The average person has earmarked roughly $12.21 for their pets’ Valentines, on average, which is almost double last year’s $6.94,” according to MarketWatch.

Related: Pet Care ETF Poised to Perk up Due to Favorable Fundamentals 

Those looking for a more practical catalyst for PAWZ can find one in the form of Zoetis (NYSEARCA: ZTS), one of the ETF’s marquee holdings.

Zoetis’ “companion-animal unit should get a boost from the Simparica Trio, a chewable triple combination parasiticide for dogs that has received regulatory approval in the European Union and Canada. Zoetis is expecting to receive U.S. approval for the product in the first quarter,” reports Lawrence Strauss for Barron’s.

In pet terms, Simparica Trio could be a blockbuster, generating as much $150 million in sales for Zoetis over the last nine months of 2020.

For more on core investing strategies, visit our Core ETF Channel.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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