The ETF can add stocks six months after the parent company spins them out and they can remain in the fund for two years thereafter. [Changes for the Spin-Off ETF]
The weight-and-see methodology has helped CSD dodge some spin-off duds, but that isn’t a guarantee CSD will be laggard-free.
SPUN tracks the performance of the Horizon Kinetics Global Spin-Off Index, which equally weights components. Specifically, SPUN will build a position in the early stages after a spin-off occurs, capitalizing on short-term selling pressure to buy low. Additionally, index components will be held for five-years to capture any potential long-term opportunities. [Inside the Global Spin-Off ETF]
SPUN, which debuted in June, can add and remove holdings on a quarterly basis.
Market Vectors Global Spin-Off ETF
