Fewer than 50 ETFs and ETNs are sitting on second-quarter gains of 10% or more. With just one day left in the quarter, it is safe to say that number will not change too much. Strip out inverse and leveraged products and the “at least 10% up” club falls drastically in membership.

One member, the PowerShares Fundamental Pure Mid Growth Portfolio (NYSEArca: PXMG), serves as a reminder that there advantages to alternatives to traditional market cap-weighted ETFs. PXMG, which debuted in March 2005, is one member of an extensive lineup of PowerShares ETFs that track fundamentally-weighted indexes constructed by Research Affiliates. [ETF Sponsors Focus on Alternative Indices]

PXMG tracks the RAFI Fundamental Mid Growth Index, which is “comprised of common stocks of ‘mid growth’ US companies, including real estate investment trusts (REITs), from a universe comprised of the 2,500 largest US companies based on fundamental weight,” according to PowerShares, the fourth-largest U.S. ETF sponsor.

PXMG highlights the fact that a move away from cap-weighted funds can sometimes serve investors well. The ETF is up 17.2% this quarter and 29.1% over the past year, creating staggering performance differentials with the rival iShares Russell Midcap Growth Index Fund (NYSEArca: IWP). IWP is up just 3.8% in the second quarter.

PXMG is well distributed at the sector level and could be a credible option in the event of a legitimate cyclical rotation. Financial services and energy names combine for a third of the fund’s weight while consumer discretionary and technology combine for almost 26%. Top-10 holdings include hard disk driver maker Western Digital (NYSE: WDC), fertilizer producer Mosaic (NYSE: MOS) and energy exploration firm Noble Energy (NYSE: NBL). [Cyclical ETFs Can Perform When Rates Rise]

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