The ProShares Pet Care ETF (CBOE: PAWZ) debuted last November as the first exchange traded fund (ETF) dedicated to the pet care industry and related investment opportunities. While PAWZ does not have a lengthy track record, it is already proving to be a durable ETF amid increased equity market volatility.
Last month, the S&P 500 slid 5.67%, but PAWZ lost just 1.51%. With a roughly 39% weight to stocks that would be considered healthcare names and some consumer staples exposure, PAWZ is defensive at the sector level. Even with that defensive posture, there are significant growth opportunities among pet-related investments.
Veterinary care is “estimated to rise 4.8% this year to $19 billion. Vet visits are becoming more frequent, diagnostic and therapy choices are expanding, and pets are living longer,” reports Jack Hough for Barron’s.
PAWZ seeks investment results, before fees and expenses, that track the performance of the FactSet Pet Care Index. The fund seeks to invest substantially all of its assets in the securities included in the index. Under normal circumstances, the fund will invest at least 80% of its total assets in the component securities of the index. The index consists of U.S. and non-U.S. companies that potentially stand to benefit from interest in, and resources spent on, pet ownership.
Inside PAWZ ETF
One PAWZ companion, Trupanion (NASDAQ: TRUP), a provider of pet health insurance, is up 15.20% this year and analysts love the stock.
Trupanion “sells pet health plans to cover those rising vet bills. Next year, Wall Street expects the company to swing to profitability as revenues rise 20% to $447 million. All nine analysts who cover it say to buy,” according to Barron’s.
Data support long-term growth for PAWZ and its constituents. The U.S. is witnessing a proliferation in pet ownership. According to the American Pet Products Association (APPA), around 68% of U.S. households have pets, compared to 56% in 1988. There are even more households that have pets than have children.
Investors have added almost $5 million to PAWZ this year.
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