Why Are Pets Generating a Buzz on Wall Street?


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With concerns over a possible recession, the stock market has been pretty volatile over the past few months. However, a new pet-focused investment opportunity has stood out for its success. The ProShares Pet Care “PAWZ” exchange traded fund is dependent on the performance of major pet companies and has experienced growth in the past year.

An exchange traded fund (ETF) is a bundle of investments such as bonds or stocks. They can have different themes, and the PAWZ ETF is the first one focused on the pet sector. It contains stocks from major pet companies related to all different aspects of the industry, from retailers to manufacturers to veterinary pharmaceuticals. Familiar names in the fund include Chewy, Freshpet and Central Garden & Pet Co.

Using statistics from The American Pet Products Association, Simeon Hyman, global investment strategist at ProShares, has cited demographic trends like increasing pet ownership among baby boomers and millennials as being justification for a pet-themed ETF. PAWZ was founded to invest in companies that stand to benefit from these increases in pet ownership as well as improvements in animal care.

“Dog owners increasingly treat their animal companions like members of the family—one of the drivers that has seen the pet care business experience twice the percentage growth of GDP in the U.S. since 2007, including through the Great Recession,” says Hyman. “Industry insiders don’t see any signs that pet owners will become any less willing to open their pocketbooks on pet care.”

ProShares predicts that the pet care industry could near $203 billion in global sales by 2025 and is looking to help investors capitalize on that growth. So far, PAWZ has outperformed other ETFs, including the biggest healthcare fund, and is up 10% on its yearly return.

 

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