ETF Spotlight on the Direxion All Cap Insider Sentiment Shares (NYSEArca: KNOW), part of an ongoing series.
Assets: $22.6 million
Objective: The Direxion All Cap Insider Sentiment Shares ETF tries to reflect the performance of the Sabrient Multi-Cap Insider/analyst Quant-weighted Index, which is comprised of 100 of the top publicly-traded companies in the S&P 1500 index that reflect positive sentiment among those “insiders” closet to the company’s business.
Holdings: Top holdings Lexmark International (NYSE: LXK) 2.6%, Symantic Corp (NasdaqGS: SYMC) 2.5%, Cisco Systems (NasdaqGS: CSCO) 2.4%, CenturyLink (NYSE: CTL) 2.4% and Cablevision Systems Corp (NYSE: CVC) 2.4%.
What You Should Know:
- Direxion Investments sponsors the fund.
- KNOW has a 0.65% expense ratio.
- The ETF has 100 holdings and the top ten components make up 23.5% of the overall portfolio.
- Sector allocations include basic materials 2.4%, consumer discretionary 14.5%, financials 12.7%, real estate 6.2%, telecom 4.8%, energy 13.0%, industrials 6.4%, tech 16.9%, consumer staples 1.1%, healthcare 15.8% and utilities 6.2%.
- Market capitalization includes mega-caps 13.7%, large-caps 37.3%, medium 43.0% and small-cap 6.0%.
- The fund is up 1.4% over the past month, up 7.3% over the last three months and up 10.9% year-to-date.
- KNOW is 9.2% above its 200-day exponential moving average.
- The ETF lets investors track stocks that corporate insiders are accumulating.
- The underlying index makes a monthly review to rebalance toward strong insider buying and favorable analyst ratings.
- The argument for shadowing insider moves makes sense since company officers and executives tend to have the most information on their companies’ outlook.
Next page: The latest news
The Latest News:
- U.S. stocks weakened Thursday, following worries centered on Espirito Santo Financial Group.
- “People will shoot first and ask questions later when news like this hits,” Lawrence Creatura, a fund manager at Federated Investors Inc., said in a Bloomberg article. “The concern of an event like this is always determining whether it’s occurring in isolation or whether it’s the first domino. It’s a classic flight to safety across the equity, commodities and bond markets.”
- Nevertheless, the positive fundamentals in the U.S. economy remain, so the recent bout of volatility is only seen as an excuse to sell off the recent highs.
- “The reality is that we had a 6% rally in just six weeks, and markets were looking for an excuse to correct. Nothing has changed fundamentally, neither in the U.S., nor in Europe,” Steven Wieting, global chief investment strategist at Citi Private Bank, said in a MarketWatch article. “Rising markets tend to ignore single data points, but in falling markets, fear gets amplified that someone else will sell.”
Direxion All Cap Insider Sentiment Shares
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.