June 14, 2008 at 1:00 am by Tom Lydon
Exchange traded funds (ETFs) that employ non-traditional strategies are capturing investors’ imaginations.
By straying from tradition, the rules-based quant strategy ETF promises pumped up returns by hedging a portfolio or taking a directional bet on a sector, niche or market, explains Scott Martindale for Trading Markets.
This next generation of indexing uses a wide range of factors, including fundamental, technical and sentiment-oriented, to get a subset of top-ranked stocks within the index. This is accomplished through a multi-factor, quantitative indexing approach, which is transparent, back-testable and repeatable.
Some of the quant-based ETFs are:
- PowerShares Dynamic Large-Cap Value (PWV): down 8.4% year-to-date
- PowerShares Dynamic Industrials Report (PRN): down 2.6% year-to-date
- Claymore/Zacks Sector Rotation Portfolio (XRO): down 9.1% year-to-date
- Claymore/Sabrient Insider Portfolio (NFO): down 7.2% year-to-date
If you’re comfortable with the idea of these ETFs, want to break with a little tradition and these funds are above their trend lines, it will be nice to have these funds as an option.
Tags | Industrials
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