An exchange traded fund (ETF) that tracks an index of stocks with predominant insider buying sounds like a smart idea. Claymore/Sabrient Insider (NFO) is the first ETF that utilizes this theory. This is one of the first ETFs sponsored by Claymore that launched in September.
Insiders can be directors or those who own at least 10% of shares. Sabrient Systems created the 100-stock insider sentiment index based on data from public filings from corporate insiders, Trang Ho of Investors Business Daily reveals. The portfolio is equally weighted and re-balances every quarter.
Since owners sell shares for many reasons, insider selling is not considered predictive of performance as buying. Insiders are valuable because they know their company, and understand future prospects, regarding products, services or competitors.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.