Exchange traded funds (ETFs) are a lot like books. Remember the saying "Don’t judge a book by its cover," which can be applied to so many instances? The Claymore/Sabrient Defender ETF (DEF) doesn’t provide a lot to look at yet, it is meant to perform well in down markets.
Roger Nusbaum of TheStreet.com says not to dismiss this ETF just because it appears gimmicky. The specifics of the methodology are proprietary, but generally DEF is rebalanced quarterly based on the prior quarter and what did well on down days. In actuality, it let’s past quarterly performance and current events dictate it’s composition.
The sector make-up is currently financials, discretionary, and telecom. There are 100 equal-weighted stocks that re-balance every quarter. Funds deserve a chance to prove themselves before they can be dismissed.
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.