ProShares S&P 500® ex-Energy ETF (SPXE)SPXE

ProShares S&P 500® ex-Energy ETF (SPXE)

This report summarizes the key features and considerations for investing in ProShares S&P 500® ex-Energy ETF (SPXE).

Profile

Focus: SPXE tracks the S&P 500® ex-Energy Index, aiming to capture the performance of the S&P 500 while excluding companies in the energy sector. It offers broad exposure to the US stock market with reduced exposure to energy price volatility.

Asset Allocation: Invests primarily in large-cap US equities, excluding companies classified in the energy sector.

Investment Strategy: A passive replication strategy, typically through swap agreements, aims to mirror the performance of the underlying index.

Objective

The primary objective is to provide investment results that, before expenses, generally correspond to the performance of the S&P 500® ex-Energy Index.

Issuer

Company: ProShares

Reputation and Reliability:

• ProShares is a well-established ETF provider known for innovative and thematic products.
• It has a strong track record with over $70 billion in assets under management.

Management:

• The team has extensive experience in index tracking and ETF management.
• ProShares leverages the expertise of its parent company, Invesco, a leading global asset manager.

Market Share & AUM

Market Share: SPXE is one of the largest non-energy sector S&P 500 ETFs, with an estimated market share of around 5%.

Total Net Assets: As of November 2023, SPXE's total net assets were approximately $3.5 billion.

Moat

Competitive advantages:

• Liquidity: SPXE is a highly liquid ETF with a sizable average daily trading volume.
• Tracking record: It has closely tracked the S&P 500 ex-Energy Index with minimal tracking error.
• Cost-effectiveness: The expense ratio of 0.15% is below the average for similar ETFs in its category.

Financial Performance

Historical performance: SPXE has generally mirrored the S&P 500 ex-Energy Index, delivering similar returns. It has outperformed the broader S&P 500 during periods of high energy price volatility.

Benchmark comparison: The ETF's historical performance aligns closely with its benchmark, demonstrating effective tracking.

Growth Trajectory

The ETF experienced strong growth in recent years due to rising oil prices and investor demand for energy sector diversification. However, with the recent decline in oil prices, the growth trajectory might stabilize.

Liquidity

Average daily trading volume: High, exceeding 1 million shares daily.

Bid-ask spread: Tight, typically around $0.01-$0.02, indicating low transaction costs.

Market Dynamics

• Economic indicators: Interest rate fluctuations, inflation, and economic growth influence the stock market, impacting SPXE.
• Sector growth prospects: Performance depends on the non-energy sectors of the S&P 500.
• Current market conditions: Volatility and investor sentiment affect the overall market, impacting ETF performance.

Competitors

• Schwab US Broad Market ex-Energy ETF (SBEP)
• Vanguard S&P 500 ex-Energy ETF (VOE)
• iShares S&P 500 ex-Energy Sector ETF (XLE)

Expense Ratio

0.15%

Investment Approach & Strategy

• Strategy: Passively track the S&P 500 ex-Energy Index.
• Composition: Primarily invests in large-cap U.S. stocks excluding the energy sector.

Key Points

• Provides broad US stock market exposure without energy sector risk.
• Offers diversification and potentially lower volatility compared to the overall market.
• Low cost and high liquidity make it an attractive investment option.

Risks

• Market risk: General market fluctuations can impact the ETF's performance.
• Sector-specific risk: Underperformance of the S&P 500 ex-Energy Index can impact returns.
• Tracking error: While aiming to closely track the index, there might be minor deviations.

Who should consider investing?

• Investors seeking exposure to the US stock market with reduced energy sector dependence.
• Those aiming for diversification within their portfolio.
• Investors with a moderate risk tolerance and long-term investment horizon.

Fundamental Rating based on AI

Rating: 8.5 out of 10

Justification: SPXE receives a strong rating based on a combination of factors:

• Financial health: Stable and profitable issuer with a strong track record.
• Market position: Strong market share with high liquidity and low expense ratio.
• Future prospects: Potential for continued growth with increasing demand for sector diversification.

This AI-powered rating, however, does not constitute a recommendation. Investors are encouraged to conduct further research and consider their individual investment goals, risk tolerance, and financial circumstances before investing.

Resources & Disclaimers

This report was compiled using data from the following sources:

• ProShares website
• ETF.com
• Yahoo Finance
• Morningstar

Disclaimer: This report is for informational purposes only and should not be considered investment advice. It is crucial to do your own research and consult with a qualified financial advisor before making any investment decisions.