Planned ETF To Target Pet Industry

May 22, 2018

ProShares has filed for an ETF that will allow investors to specifically target the products and services that are part of the $70 billion pet industry. The ProShares Pet Care ETF will track an equal-weighted index provided by FactSet.

The underlying benchmark will consist of domestic and foreign companies that generate at least half of their revenues from businesses related to pet-care-related or veterinary-related products and services.

These businesses can include the manufacture of pet food and supplies; stores selling those products; pharmaceuticals and diagnostics associated with veterinary care; and the provision of veterinary products and services. The index’s methodology includes minimum thresholds for size and liquidity, according to the prospectus.

Methodology Workaround

The index must have at least 21 components. However, the methodology includes a workaround if there are not enough eligible companies under which companies with at least $1 billion in annual revenue from pet-care-related businesses are selected based on how much those businesses represent of their total revenue. The index selects the top firms from the ranked list until the 21-component minimum is met, according to the document that notes that, as of the end of April, the index included 22 components.

The index is equally weighted and rebalances on a monthly basis, the prospectus says. It does not include an expense ratio, ticker or listing exchange.

An exchange-traded managed fund (ETMF) from Gabelli NextShares is currently in registration and will be brought to market on the Nasdaq. ETMFs are similar to ETFs but are actively managed in a nontransparent manner and considered to be ETFs by the SEC. The Gabelli Pet Parent Fund – Companion Pets, Their Parents, and The Ecosystems will have a very similar focus to the proposed ProShares fund.

Contact Heather Bell at [email protected]

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