As investors look for new ways to build out their investment portfolios, many have turned to smart beta or alternative index-based exchange traded funds that can potentially diminish risks or enhance returns.
For example, the Direxion All Cap Insider Sentiment Shares (NYSEArca: KNOW) has been a quietly outperforming. Since its inception in December 2011, the fund has returned 16.5% annually.
According to Morningstar data, KNOW has ranked in the 5th percentile over the five-year period, generating a 16.1% average annualized return, compared to the S&P 500’s 13.8% average return.
Helping ETF investors capture higher returns, KNOW provides “insider” access to stocks that are being most heavily accumulated by corporate officers, directors and major shareholders and serves as intelligent overlay that isolates stocks that are expected to outperform, according to a note.
Using a quantitative screening methodology that focuses on open market purchases along with positive analysts valuations, the ETF provides access to a disciplined rules-based approach based on positive corporate insider transactions and favorable analyst ratings, with investors “in the know” to pursue excess portfolio returns.