The ProShares Pet Care ETF (CBOE: PAWZ) hit another all-time high Wednesday, pushing its year-to-date gain to 20%, proving pet care isn’t going by the wayside during the coronavirus pandemic.
PAWZ, the first and only dedicated pet care, and retail ETF seek 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.
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.
“Pets are part of the family and—due to strong industry tailwinds like growing pet ownership and increased spending—also a potentially compelling opportunity for investors,” said ProShares in a recent note.
Purrfect PAWZ
PAWZ provides investors with the opportunity to gain broad exposure to public companies in the global pet care industry. It tracks the FactSet Pet Care Index, which is comprised of 24 companies that provide exposure to potential growth within the pet care industry.
FactSet identifies the company’s principal business as being pet care related. The index will tap into eight FactSet pet care subindustries, including pet food manufacturing, veterinary services, veterinary pharmaceuticals, pet supplies manufacturing, internet pet/supply retail, veterinary product distributors, pet supply stores, and veterinary diagnostics.
“According to the American Pet Products Association (APPA), 67% of U.S. households have a pet, up from 56% in 1988. Similar trends are at work globally, with the number of pet owners increasing in both developed and emerging nations,” notes ProShares.
PAWZ isn’t a gimmicky ETF. It’s backed by an array of strong fundamental tailwinds.
“From 2013-2018, America’s pet spending increased 50% while annual income only increased by 23%,” according to ProShares. “Global pet industry sales are forecast to grow from $190 billion in 2018 to $270 billion by 2025.”
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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.