An exchange traded fund (ETF) that will track and research the market for you?
While it might sound too good to be true, such an ETF does exit. The Claymore/Zacks Sector Rotation (XRO) tracks the performance of the Zacks Sector Rotation Index that is rebalanced quarterly and rotates its investments between sectors. This ETF is the first of its kind and has shown a generally healthy performance since its launch last year in September. XRO is currently up 3.5% year-to-date.
XRO’s holdings are 100 stocks pulled from 1,000 of the largest companies on U.S. exchanges. Research is based upon weighting returns, price, growth, estimates, and other macroeconomic factors. Companies on the list are expected to have a better risk-return than the S&P 500. Although no stock makes up more than 5% of XRO, a sector can take up as much as 45%, reports Joanne Von Alroth Investor’s Business Daily. That means targeting the right sector at the right time is essential, and this ETF does the work for you. As of July 3, XRO had 26% of its assets in finance, 17% in oil/energy and 13% in retail. Just because this ETF does the heavy lifting, investors still need to do research to know what is in it and if it continues to fit in their portfolio.
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.