CFO offers investors a unique “airbag” approach in that it can move to a cash position of up to 75% in the event of a significant market pullback. As stocks rebound from that hypothetical decline, CFO’s underlying index begins reducing cash and adding equity exposure, providing investors with the advantages of dollar-cost averaging.
Top-10 holdings in CFO’s underlying index include Dow components McDonalds (NYSE: MCD), Wal-Mart (NYSE: WMT) and Johnson & Johnson (NYSE: JNJ).
CDC tracks the CEMP U.S. Large Cap High Dividend 100 Long/Cash Volatility Weighted Index, also a passive index that is comprised of the ” highest dividend yielding stocks of the CEMP U.S. Large Cap 500 Volatility Weighted Index,” said Compass.
CDC also features the ability to move to up 75% its index experiences an 8% from its daily highest value. Since inception in September 2000, CDC’s index has outperformed the S&P 500 by seven-to-one, according to Compass data.
At the end of the first quarter, the CEMP U.S. Large Cap High Dividend 100 Long/Cash Volatility Weighted Index had a dividend yield of 3.54% with top-10 holdings including McDonald’s, Duke Energy (NYSE: DUK) and ConocoPhillips (NYSE: COP).
ETF Trends editorial team contributed to this post.