ETF Risk Report: IHE Buyer beware: Every ETF holds the full risk of its underlying equities Disclosures in the best interest of investors iShares US Pharmaceuticals ETF Gray Swan Event Risks exist for every equity held by IHE. Gray swan events include accounting fraud, management failures, failed internal controls, M&A problems, restatements, etc. These risks occur infrequently, but Gray Swan Event Factor for IHE 2.72% consistently for all equities. Equities account for 99.86% of IHE’s assets. Most investors ignore these risks until after they are disclosed; whereupon a stock’s price drops precipitously. Just as insurance companies can predict likely costs for a driver’s future car accidents based on the driver’s history, Watchdog Research contacts each ETF asking how they notify investors about we predict the likely cost (price drop) for IHE following accounting governance risks in equities in their fund. We will publish their response gray swan disclosures within its holdings. The expected when received. price decrease across the IHE equity portfolio is 2.72%. However, individual equity risks vary signi cantly. This report helps investors know their risk exposure.
Inception Date: 05/01/2020 Year-to-Date Return: -0.64% The iShares U.S. Pharmaceuticals ETF tracks the investment results of the Dow Jones U.S. Select Net Assets: $355m 1-Year Return: 33.74% Pharmaceuticals Index, composed of U.S. equities in the pharmaceuticals sector. The Fund uses a passive or Price: $177.65 3-Year Return: 7.84% indexing approach and invests by sampling the Index, Net Asset Value (NAV): $177.38 5-Year Return: 6.78% holding a collection of securities that approximates the full Index in key investment characteristics (such as Net Expense Ratio: 0.42% Yield: 1.23% market capitalization and industry weightings), fundamentals (such as return variability and yield), and As of: 03/31/2021 liquidity.
Company Ticker Held Current GSEF Category Value Top Holdings by Value
Johnson & Johnson JNJ Long 2.34% Mid $85.4m This table shows Gray Swan Event Factors for the top ten equity holdings by dollar-value, as of Sep 24, 2021. P zer Inc. PFE Long 3.27% Mid $68.6m Investors should invest in ETFs only when they adequately Zoetis Inc. ZTS Long 2.31% Mid $18.1m understand an ETF’s risks. Buyer beware. ETF prospectuses generally acknowledge that ETF managers Merck & Co., Inc. MRK Long 3.34% Mid $18m do NO traditional risk analysis on equities in their fund. Elanco Animal Healt... ELAN Long 1.95% Low $17.6m Our Gray Swan Event Factors are meant to inform investors of signi cant traditional accounting and Bristol Myers Squib... BMY Long 2.24% Mid $17.5m managerial risks for the equities in each ETF.
Eli Lilly And Company LLY Long 2.99% Mid $17.4m ETF Risk Reports are published quarterly on dedicated Catalent, Inc. CTLT Long 3.42% Mid $17.3m platforms like Factset, Re nitiv, Capital IQ etc. Weekly updates are available for a paid subscription. Jazz Pharmaceutical... JAZZ Long 6.04% High $16m For more details contact: [email protected] Viatris Inc VTRS Long - NA $15.9m
Company Ticker Held Current GSEF Category Value Riskiest Holdings
Jazz Pharmaceutical... JAZZ Long 6.04% High $16m This table shows the individual Gray Swan Event Factors for this ETF’s most at-risk equities as of Sep 24, 2021. Endo International ... ENDP Long 4.64% Mid $1.63m The average equity GSEF across 6,500 public equities is Amneal Pharmaceutic... AMRX Long 3.90% Mid $878k 1.25%. Equities with a GSEF between 5% and 10% are considered high risk. Equities with a GSEF above 10% are Provention Bio, Inc. PRVB Long 3.74% Mid $677k extreme risks. Ironwood Pharmaceut... IRWD Long 3.72% Mid $3.12m Gray Swan Event Factors are derived from skilled analysts charting 15 years of negative gray swan event disclosures Spectrum Pharmaceut... SPPI Long 3.68% Mid $906k against stock price declines following such disclosures. A Gray Swan Event Factor is an assessment of the Catalent, Inc. CTLT Long 3.42% Mid $17.3m likelihood of, and 12-month price risk for, gray swan Merck & Co., Inc. MRK Long 3.34% Mid $18m events for each equity.
Chemocentryx, Inc. CCXI Long 3.34% Mid $1.01m
P zer Inc. PFE Long 3.27% Mid $68.6m
Watchdog Research, Inc. • www.watchdogresearch.com • [email protected] • (855) 820-6272 This table lists the equity holdings for iShares US Pharmaceuticals ETF ranked by highest GSE Factor (riskiest rst). We list all equities (US and foreign) for this ETF. However, some foreign listings only show via a ticker.
To further evaluate risks, you can access details for each company by opening its Brief Watchdog Report available for viewing and pdf download. The report is free to readers for their personal consumption and it includes the executive summary data pulled from the full Watchdog Report.
To learn more about the full Watchdog and GSEF Reports go to last page or visit watchdogresearch.com.
Company Access Details Ticker Held Current GSEF Category Value
Jazz Pharmaceuticals Plc. Watchdogresearch.com/watchdog/$JAZZ JAZZ Long 6.04% High $16m
Endo International Plc. Watchdogresearch.com/watchdog/$ENDP ENDP Long 4.64% Mid $1.63m
Amneal Pharmaceuticals, Inc. Watchdogresearch.com/watchdog/$AMRX AMRX Long 3.90% Mid $878k
Provention Bio, Inc. Watchdogresearch.com/watchdog/$PRVB PRVB Long 3.74% Mid $677k
Ironwood Pharmaceuticals Inc. Watchdogresearch.com/watchdog/$IRWD IRWD Long 3.72% Mid $3.12m
Spectrum Pharmaceuticals Inc. Watchdogresearch.com/watchdog/$SPPI SPPI Long 3.68% Mid $906k
Catalent, Inc. Watchdogresearch.com/watchdog/$CTLT CTLT Long 3.42% Mid $17.3m
Merck & Co., Inc. Watchdogresearch.com/watchdog/$MRK MRK Long 3.34% Mid $18m
Chemocentryx, Inc. Watchdogresearch.com/watchdog/$CCXI CCXI Long 3.34% Mid $1.01m
P zer Inc. Watchdogresearch.com/watchdog/$PFE PFE Long 3.27% Mid $68.6m
Eli Lilly And Company Watchdogresearch.com/watchdog/$LLY LLY Long 2.99% Mid $17.4m
Collegium Pharmaceutical, Inc. Watchdogresearch.com/watchdog/$COLL COLL Long 2.90% Mid $1.25m
Phathom Pharmaceuticals, Inc. Watchdogresearch.com/watchdog/$PHAT PHAT Long 2.80% Mid $664k
Reata Pharmaceuticals Inc. Watchdogresearch.com/watchdog/$RETA RETA Long 2.53% Mid $5.64m
Johnson & Johnson Watchdogresearch.com/watchdog/$JNJ JNJ Long 2.34% Mid $85.4m
Zoetis Inc. Watchdogresearch.com/watchdog/$ZTS ZTS Long 2.31% Mid $18.1m
Innoviva, Inc. Watchdogresearch.com/watchdog/$INVA INVA Long 2.31% Mid $1.26m
Bristol Myers Squibb Co. Watchdogresearch.com/watchdog/$BMY BMY Long 2.24% Mid $17.5m
Corcept Therapeutics Inc. Watchdogresearch.com/watchdog/$CORT CORT Long 2.23% Mid $3.45m
Theravance Biopharma, Inc. Watchdogresearch.com/watchdog/$TBPH TBPH Long 2.19% Mid $1.11m
Amphastar Pharmaceuticals, Inc. Watchdogresearch.com/watchdog/$AMPH AMPH Long 2.03% Mid $1.11m
Vanda Pharmaceuticals Inc. Watchdogresearch.com/watchdog/$VNDA VNDA Long 2.00% Low $1.79m
Elanco Animal Health Incorporated Watchdogresearch.com/watchdog/$ELAN ELAN Long 1.95% Low $17.6m
Perrigo Co. Plc. Watchdogresearch.com/watchdog/$PRGO PRGO Long 1.94% Low $9.16m
Axsome Therapeutics, Inc. Watchdogresearch.com/watchdog/$AXSM AXSM Long 1.75% Low $2.69m
Arvinas, Inc. Watchdogresearch.com/watchdog/$ARVN ARVN Long 1.71% Low $3.78m
Atea Pharmaceuticals, Inc. Watchdogresearch.com/watchdog/$AVIR AVIR Long 1.71% Low $397k
Ngm Biopharmaceuticals, Inc. Watchdogresearch.com/watchdog/$NGM NGM Long 1.65% Low $705k
Zogenix, Inc. Watchdogresearch.com/watchdog/$ZGNX ZGNX Long 1.59% Low $1.44m
Pacira Pharmaceuticals, Inc. Watchdogresearch.com/watchdog/$PCRX PCRX Long 1.58% Low $3.99m
Cara Therapeutics, Inc. Watchdogresearch.com/watchdog/$CARA CARA Long 1.50% Low $919k
Revance Therapeutics, Inc. Watchdogresearch.com/watchdog/$RVNC RVNC Long 1.47% Low $2.95m
Aerie Pharmaceuticals Inc. Watchdogresearch.com/watchdog/$AERI AERI Long 1.43% Low $1.12m
Madrigal Pharmaceuticals, Inc. Watchdogresearch.com/watchdog/$MDGL MDGL Long 1.42% Low $1.45m
Intra Cellular Therapies, Inc. Watchdogresearch.com/watchdog/$ITCI ITCI Long 1.41% Low $4.36m
Phibro Animal Health Corp. Watchdogresearch.com/watchdog/$PAHC PAHC Long 1.04% Low $879k
Therapeuticsmd, Inc. Watchdogresearch.com/watchdog/$TXMD TXMD Long 0.90% Low $628k
Watchdog Research, Inc. • www.watchdogresearch.com • [email protected] • (855) 820-6272 Company Access Details Ticker Held Current GSEF Category Value
Omeros Corp. Watchdogresearch.com/watchdog/$OMER OMER Long 0.83% Low $1.38m
Catalyst Pharmaceuticals, Inc. Watchdogresearch.com/watchdog/$CPRX CPRX Long 0.78% Low $828k
Relmada Therapeutics, Inc. Watchdogresearch.com/watchdog/$RLMD RLMD Long 0.74% Low $673k
Amicus Therapeutics Inc. Watchdogresearch.com/watchdog/$FOLD FOLD Long 0.63% Low $3.83m
Antares Pharma, Inc. Watchdogresearch.com/watchdog/$ATRS ATRS Long 0.62% Low $1.01m
Prestige Brands Holdings, Inc. Watchdogresearch.com/watchdog/$PBH PBH Long 0.44% Low $3.89m
Viatris Inc Watchdogresearch.com/watchdog/$VTRS VTRS Long - NA $15.9m
Organon & Co. Watchdogresearch.com/watchdog/$OGN OGN Long - NA $11.4m
Royalty Pharma Plc Watchdogresearch.com/watchdog/$RPRX RPRX Long - NA $5.3m
Nuvation Bio Inc Class A - NUVB Long - NA $880k
Watchdog Research, Inc. • www.watchdogresearch.com • [email protected] • (855) 820-6272 This is a story about four people investing in ETFs. They are named Everybody, Somebody, Anybody and Nobody.
Everybody wanted to buy ETFs because ETFs are such great investments. “Not so fast,” said Somebody. “Nobody should buy an ETF without rst understanding the accounting and disclosure risks for the ETF’s basket of stocks.”
Everybody scoffed: “Don’t be silly! What could go wrong? Let’s just BUY immediately! Somebody at the ETF must have done that work for us.” Anybody explained how Everybody was wrong in their thinking: “Most ETF prospectuses speci cally say Nobody at the ETF actually does traditional stock risk analysis.” Everybody read many ETF prospectuses, and, sure enough, Anybody was right! So, while Everybody should know the risks before buying an ETF, Nobody was actually doing it.
Until this report was created.
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