A corporate spin-off occurs under a variety of circumstances. Perhaps management has decided of their own accord that separating a non-related or non-essential business from the parent company will unlock shareholder value. Or maybe management’s hand was forced by a large, activist investor. Either way, spin-offs are a mundane events, but the post-separation returns can be anything but boring for investors.

Of course, that is assuming investors own shares in a company that Wall Street deems as more attractive after jettisoning a cumbersome business or if the spun off entity becomes a darling stock. Using the Guggenheim Spin-Off ETF (NYSEArca: CSD) rather than trying to stock-pick among spin-offs has proven to be a very rewarding option over the years. Since its debut in late 2006, CSD is up nearly 56% and currently resides with in pennies of a new all-time high. [Spin-Off ETF Keeps Spinning Higher Returns]

CSD, which tracks the Beacon Spin-off Index, has achieved that stunning level of alpha generation against the S&P 500 with just a small number of holdings. Three years ago, CSD had 40 holdings. In mid-June, CSD had 27 stocks. The number was down to 25 as of August 8.

The reason CSD, which can technically be considered a “broad market” ETF, does not hold hundreds of stocks as some true broad market ETFs do is that spin-offs are not everyday events. Roughly 30 companies a year engage in spin-offs, according to Kiplinger’s. Through the end of May 2013, just 15 U.S. companies had spun off businesses. Just three more spin-offs are currently scheduled for the rest of this year, according to StockSpinOff.com.

CSD is a passively managed ETF, so Guggenheim, the fund’s issuer, is not engaged in stock-picking for the ETF on an active level. However, the fund has clearly benefited this year from its index’s methodology, which culls constituents from a universe of comapnies “that have been spun-off within the past 30 months (but not more recently than six months prior to the applicable rebalancing date), without limitations on market capitalization,” according to Guggenheim.

That methodology has led to some excellent selections. CSD’s top-10 holdings include TripAdvisor (NasdaqGM: TRIP) and Starz (NasdaqGM: STRZA), which are up an average of 79% this year. Even supposedly boring staples spin-offs Post (NYSE: POST) and Kraft (NasdaqGM: KRFT) are up an average of 26%. China’s Phoenix New Media (NYSE: FENG), CSD’s largest holding, has more than doubled year-to-date. [Spin-Off ETF Making Gains]