ProShares S&P 500® ex-Financials retains its Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and volatility exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The team managing this passive strategy earns a Below Average People Pillar rating. The strategy's parent organization is industry standard, albeit with some strong attributes like overall low fees and a favorable lineup success ratio. This earns the firm an Average Parent Pillar rating.

Analyst Rating

Microsoft

Apple

NVIDIA

Amazon

Alphabet

Eli Lilly

Broadcom

Exxon Mobil

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. ProShares S&P 500® ex-Financials earns an Above Average Process Pillar rating. The most notable contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Impressive risk-adjusted performance also bolsters the process. This can be seen in the fund's five-year alpha calculated relative to the category average, which suggests that the process was successful over that period. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 38%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

The investment strategy as stated in the fund's prospectus is:  The investment seeks investment results, before fees and expenses, that track the performance of the S&P 500® Ex-Financials and Real Estate Index (the "index").  Under normal circumstances, and the fund will invest at least 80% of its total assets in component securities of the index. The index and fund seek to provide exposure to the companies of the S&P 500® Index (the "S&P 500®") with the exception of those companies included in the Financials and Real Estate Sectors. 

 The portfolio is overweight in technology and consumer cyclical relative to the category average by 8.0 and 2.6 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and real estate, with financial services underweighting the average portfolio by 13.4 percentage points of assets and real estate similar to the average. The portfolio is composed of 401 holdings and is diversified among those holdings. In its most recent portfolio, 37.6% of the strategy's assets were concentrated in the top 10 fund holdings, compared to the category’s 48.8% average. And finally, in terms of portfolio turnover, looking at year-over-year movements, 8% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

ProShares’s team receives a Below Average People Pillar rating. The team benefits from the fund's structure. It tracks an index, which is helpful because historical data, such as Morningstar's Active/Passive Barometer, finds that index funds have generally outperformed their active counterparts, especially over the long term. However, the rating is held back by the parent firm's five-year success ratio of 32%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 58% also weakens the team.

Below Average

People

In a competitive industry, ProShares doesn't differentiate itself enough, leading to an Average Parent Pillar rating. One notable advantage of ProShares is its below-average fees. On average, the firm's open-end and exchange-traded fund fees fall in the second-cheapest quintile of category peers. The firm’s lineup has demonstrated industry-average durability. Its 10-year success ratio is 57%, meaning that 57% of strategies have both survived and beaten their respective category median. A firm's success ratio indicates relative performance and provides insight into a firm’s discipline around investment strategy and product development. ProShares has faced above-average manager turnover in the past five years. This is a concern, as long-term stability tends to support positive results.

Average

Parent

ProShares S&P 500 Ex-Financials ETF

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