Fundamental Context The CFRA Focus ETF for May is Health Care Select Sector SPDR (XLV). In rating equity ETFs, CFRA combines fund-level attributes, including performance and costs, with holdings-level risk and reward analysis to provide a second opinion on what is inside the fund. XLV is appealing to CFRA as we look forward. Sam Stovall, CFRA’s Chief Investment Strategist, noted that the S&P 500 Index has typically struggled during the seasonally weak May-October period of the year, rising only 2.2% on average since 1990. However, the S&P 500 Health Care sector was the best performing sector gaining 4.8%. The S&P 500 Health Care sector, which XLV seeks to replicate is diversified across key health care industries. Health Care Equipment & Supplies (29% of assets), Pharmaceuticals (27%), Health Care Providers & Services (20%) are the largest, but the ETF has meaningful exposure to Biotechnology (14%) and Life Sciences Tools & Services (9%) as well. The ETF is market-cap weighted with 51% of assets invested in the top-10 securities such as Abbot Laboratories (ABT), Johnson & Johnson (JNJ), and United Health Group (UNH). Yet, the fund has slight exposure to more moderately sized health care companies such as Perrigo (PRGO) and United Health Services (UHS 146 ****).