Defensive Value ETF Races to New Highs

The combination of defense and value is proving alluring (and rewarding) to investors these days. Fortunately, there are plenty of exchange traded funds that blend those two traits and those ETFs have been hot as their growth counterparts have wilted.

Consider the Guggenheim Defensive Equity Index ETF (NYSEArca: DEF). Amid the recent resurgence of value ETFs, DEF is one of the standouts with a 4.7% gain over the past month. DEF also features some important hallmarks of value investing that conservative investors prize, including reduced volatility. DEF’s beta is just 0.56 with a standard deviation of 8.84%, which is nearly 330 basis points below the S&P 500. [Getting Defensive With Low Vol ETFs]

At the sector level, DEF maintains its status as a value investor’s dream. Guggenheim lists energy as DEF’s largest sector allocation at 22.4%, but when including master limited partnerships and integrate oil names, the ETF’s energy weight jumps over 44%.

DEF does have an element of sensitivity to interest rates as utilities and telecom stocks combine for over a third of the ETF’s weight. [The Right Sectors are Lifting This Dividend ETF]

DEF, which charges 0.65% per year, tracks the Sabrient Defensive Equity Index. That index allows for the inclusion of American depositary receipts, giving the ETF some international exposure as well.