As for growth, yes, SLDR has that. Just look at the ETF’s consumer discretionary holdings, which include Priceline (NasdaqGS: PCLN) and Chipotle (NYSE: CMG). Or its consumer staples holdings, which represent a departure from the staples names that dot so many ETFs. SLDR’s staples constituents include Whole Foods (NasdaqGS: WFM) and Keurig Green Mountain (NasdaqGS: GMCR). [Dancing Dow Dogs to Start 2015]
SLDR’s healthcare holdings are equally as compelling. Eschewing blue chip pharmaceuticals names, the new ETF’s five healthcare constituents are comprised of three biotechs, Cigna (NYSE: CI) and Edwards Lifesciences (NYSE: EW).
While SLDR is obviously in its infancy, the new ETF has potential to deliver outperformance for investors. Consider the following: Over the past three years, the S-Network Sector Leaders Index sported EPS growth of 135.5% compared to 56% for the S&P 500, according to ALPS data. Additionally, the index’s debt-to-equity ratio of 54.4% was nearly 2,400 basis points below the S&P 500’s over that time.
Chart Courtesy: ALPS