There is an abundance of broader market
on the market today and the roster goes well beyond basic
concepts such as those funds that track major indexes like the
S&P 500 and the Russell 2000.
Investors can now choose from a plethora of more focused,
niche ETFs are arguably more exciting and obscure than basic
funds like the SPDR S&P 500 (NYSE:
Not all these different broader market funds are worth
investors' hard-earned capital. Some use opaque concepts while
others have higher-than-average fees. However, there are a few
that have long-standing track records
of beating their tradition peers
Finding the best of the best of the non-traditional broader
market ETF lot is not too difficult. Investors can start with
these three ideas in the hunt for potentially market-beating
Guggenheim Spin-Off (NYSE:
) It might be a bit of a stretch to call the Guggenheim Spin-Off
a "broad market" ETF because the fund holds just 27 stocks
whereas many traditional broader market funds hold hundreds,
sometimes over 1,000 stocks. So perhaps we are taking some
liberties with the fact that CSD is not an explicit sector play.
Rather, the ETF is heavily allocated to three sectors - energy,
industrials and consumer discretionary.
Those groups combine for nearly two-thirds of the ETF's weight
and give CSD leverage as a cyclical rotation play. CSD's
constituents have an average market cap of $5.9 billion, which
indicates the ETF could be a fine alternative to a traditional
mid-cap index fund.
The returns affirm that notion. In the past 12 months, CSD is
up 39.1 percent compared to 25.9 percent for the SPDR S&P
MidCap 400 ETF (NYSE:
PowerShares DWA SmallCap Technical Leaders Portfolio (NYSE:
) DWAS has recently been on the receiving end of ample praise
highlighting the ETF as an alternative
to run-of-the-mill small cap funds. It appears some investors are
buying into that because DWAS traded higher on Friday on volume
that was roughly 30 percent above average.
One day is just one day, but seeing above average turnover on
the day after a holiday is an accomplishment, particularly for an
ETF that is not even a year-old yet. DWAS allocates about 60
percent of its combined weight to discretionary, health care and
financial services names and the recent track record highlights
the fact that this ETF can beat its traditional peers.
In the past 90 days, DWAS is up 11.5 percent, good for one of
the best performances among U.S.-focused broad market small-cap
ETFs over that time.
Interestingly, CSD and DWAS combine for barely more than $230
million in assets under management. However, DWAS has raked in
$34.6 million in new assets over the past month,
according to Index Universe data
. That is about 27 percent of the fund's current AUM tally.
For more on ETFs, click
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