The Perfect ETF for a Rising Rate Environment

The ETF has a 28.6% tilt toward financials, followed by 27.6% oil and gas, 17.4% industrials, 16.3% basic materials and 10.1% technology.

Each sector will hold 10 stocks for inclusion, with each stock exhibiting the strongest correlation of over performance compared to the increase in 10-year U.S. Treasury yields based on a weekly observation over the past three years. If there aren’t enough large-cap stocks that meet the requirement, then the index may include top ranked mid-cap stocks.

Top holdings include SVR Financial Group, Andeavor, Marathon Oil, Zions Bancorp and Charles Schwab.

For more information on alternative index-based strategies, visit our smart beta category.