Sponsors of exchange traded funds (ETFs) are getting creative in the type of ETFs they create. Claymore/Zacks Sector Rotation (XRO) is a good example. Roger Nusbaum in TheStreet.com explains that the index overweights sectors with the potential to outperform the S&P 500.
XRO rebalances every quarter, which could give an investor more exposure to a sector than they want for their portfolio. Cycles don’t change significantly every three months, but there is the chance that the make up of the ETF could change. The ETF does focus on the largest 1,000 companies, so you know the allocation is large-cap.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.