Should ProShares S&P 500 Ex-Technology ETF (SPXT) Be on Your Investing Radar?

The ProShares S&P 500 Ex-Technology ETF (SPXT) is a passively managed large-cap blend fund tracking the S&P 500 Ex-Information Technology & Telecommunication Services Index, offering diversified exposure to the US equity market while specifically excluding the IT sector. With over $214.90 million in AUM and a low 0.09% expense ratio, SPXT has returned 8.88% year-to-date and 13.44% over the past year. Its portfolio is heavily weighted in Financials (20.9%) and includes top holdings like Amazon, Meta, and Alphabet, providing a medium-risk option (beta 0.91) for investors aiming to mitigate direct information technology sector concentration within their broad market exposure.

Analysis

The ProShares S&P 500 Ex-Technology ETF (SPXT) provides investors with a strategic tool for gaining large-cap US equity exposure while specifically carving out the Information Technology sector. With a competitive expense ratio of 0.09% and assets under management of $214.90 million, the fund has demonstrated solid performance, returning 8.88% year-to-date and 13.44% over the last year. Its portfolio construction results in a significant overweight to the Financials sector, which constitutes 20.9% of its holdings. A crucial detail for investors is that despite its 'ex-tech' mandate, the fund's top holdings include mega-cap stocks such as Amazon, Meta Platforms, and Alphabet, reflecting their GICS classification outside of Information Technology. These top 10 holdings represent 26.96% of total assets, indicating a degree of concentration even within a diversified fund of 436 holdings. The fund's risk profile is characterized by a beta of 0.91, suggesting slightly lower volatility than the broader market, which aligns with its objective of excluding a historically volatile sector. The Zacks ETF Rank of 2 (Buy) provides a positive third-party validation based on momentum and cost factors.

Key Decisions for Investors

• Investors seeking to tactically reduce their portfolio's concentration in the Information Technology sector, while maintaining broad large-cap exposure, should consider SPXT as a core holding.
• Be aware that an 'ex-tech' strategy does not eliminate exposure to all 'big tech' firms, as SPXT maintains significant positions in names like Amazon, Meta, and Alphabet, which fall under Consumer Discretionary and Communication Services.
• Given the fund's beta of 0.91, it may be a suitable option for those looking to slightly de-risk their equity allocation relative to the S&P 500, particularly if they anticipate near-term volatility in the tech sector.
• While SPXT's 0.09% expense ratio is low, investors for whom cost is the absolute primary driver might note that broad-market alternatives like VOO or IVV are cheaper at 0.03%, though they lack the specific sector-exclusion feature.