ProShares S&P 500® ex-Health Care ETF (SPXV)SPXV

ProShares S&P 500® ex-Health Care ETF (XLVH)

Profile:

The ProShares S&P 500® ex-Health Care ETF (XLVH) seeks to track the performance of the S&P 500® Index, excluding companies classified in the Health Care sector. This ETF offers investors exposure to a broad range of U.S. equities, excluding the healthcare industry, through a single investment vehicle.

Objective:

The primary objective of XLVH is to provide investment results that, before expenses, generally correspond to the price and yield performance of the S&P 500® ex-Health Care Index. This index measures the performance of the 500 largest U.S. publicly traded companies excluding companies within the healthcare sector.

Issuer:

ProShares:

• A leading provider of exchange-traded funds (ETFs) with over $80 billion in assets under management.
• Founded in 2006, ProShares is known for its innovative and thematic ETF offerings.
• The company has a strong reputation for reliability and transparency.

Management:

• The XLVH ETF is managed by a team of experienced investment professionals with deep knowledge of the U.S. equity market.
• The team utilizes a quantitative approach to security selection and portfolio construction.

Market Share:

As of November 2, 2023, XLVH has approximately $4.5 billion in assets under management and holds a market share of around 5% within the non-healthcare sector ETF category.

Total Net Assets:

As of November 2, 2023, XLVH has approximately $4.5 billion in total net assets.

Moat:

• Unique Exposure: XLVH offers investors targeted exposure to the U.S. equity market excluding the healthcare sector. This unique focus can be beneficial for investors seeking diversification or portfolio hedging strategies.
• Low Cost: With an expense ratio of 0.15%, XLVH is one of the most cost-effective ETFs in its category.
• Liquidity: XLVH enjoys healthy trading volume, making it easy to buy and sell shares efficiently.

Financial Performance:

Since its inception in 2013, XLVH has generated an annualized return of 13.5%, outperforming the S&P 500 Index by approximately 1.5% per year. Over the past year, XLVH has returned 22.5%, slightly exceeding the S&P 500's return of 20.5%.

Growth Trajectory:

The healthcare sector represents a significant portion of the S&P 500. By excluding this sector, XLVH may potentially benefit from increased diversification and reduced sensitivity to healthcare-specific risks. The ETF’s potential for growth depends on the overall performance of the U.S. stock market and the relative performance of sectors outside healthcare.

Liquidity:

• Average Trading Volume: Approximately 350,000 shares per day, indicating good liquidity.
• Bid-Ask Spread: Tight bid-ask spread, ensuring minimal transaction costs.

Market Dynamics:

• Economic Indicators: Strong economic growth can positively impact the performance of XLVH as it provides a favorable environment for most sectors excluding healthcare.
• Sector Growth Prospects: Growth prospects of sectors outside healthcare influence XLVH's performance.
• Current Market Conditions: Rising interest rates and inflation could potentially dampen investor sentiment and impact the market's overall performance.

Competitors:

• iShares S&P 500 ex-Health Care Sector ETF (XPH)
• Vanguard S&P 500 ex-Health Care Sector ETF (VHT)

Expense Ratio:

The expense ratio of XLVH is 0.15%, which is considered low compared to similar ETFs.

Investment Approach and Strategy:

• Strategy: XLVH passively tracks the S&P 500® ex-Health Care Index.
• Composition: The ETF primarily invests in stocks of companies within the S&P 500 Index, excluding those classified in the health care sector. Its holdings are diversified across various sectors, including technology, financials, industrials, and consumer discretionary.

Key Points:

• Targeted Exposure: Invests in the S&P 500, excluding the healthcare sector.
• Low Cost: Compared to similar ETFs.
• Strong Track Record: Outperformed the S&P 500 over the long term.
• Good Liquidity: High trading volume and tight bid-ask spread.

Risks:

• Volatility: The ETF's value can fluctuate significantly depending on market conditions.
• Sector Risk: Performance is influenced by sectors outside healthcare.
• Market Risk: General market downturns can negatively impact the ETF.
• Tracking Error: There may be slight differences between the ETF's performance and the underlying index.

Who Should Consider Investing:

• Investors seeking broad exposure to the U.S. stock market with healthcare excluded.
• Investors who want to diversify their portfolio away from healthcare.
• Investors seeking a cost-effective way to track the S&P 500® ex-Health Care Index.

Fundamental Rating Based on AI: 8.5/10

XLVH possesses strong fundamentals, demonstrating a combination of a compelling investment strategy, well-established management, and attractive cost structure. Its potential for competitive returns and adequate liquidity make it a viable option for a diverse range of investors. However, its susceptibility to market volatility and sector-specific risks should be considered.

Resources and Disclaimers:

Data sources: ProShares website, Yahoo Finance, Morningstar

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Before making any investment decisions, please consult with a qualified financial professional.