At mid-day, the Merill Lynch B2B Internet HOLDRs (BHH) is up over 12% while the general markets are down. What gives? Looking under the hood you can see that 90% of the fund is invested in five stocks. Checkfree (CKFR), BHH’s largest holding, represents over 60% of the fund.
Today Checkfree is up over 18% on news that their quarterly profits more that doubled.
In addition, BHH will now be one of the top performing ETFs year-to-date. Conclusion: know what you’re buying. ETFs are promoted as being diversified. In this case it worked well for the few shareholders holding the fund, but it could have worked out the other way.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.