How Guggenheim Paints a Unique Exchange-Traded Fund Portfolio Picture

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

An exchange-traded fund (ETF) provider with a name more recognizable from the world of art, rather than investments, is Guggenheim. But Guggenheim Investments, a subsidiary of Guggenheim Partners, also is one of the legacies of the Guggenheim family, which first made its wealth in silver mining before later generations championed the visual arts, including the creation of three premier museums of modern and contemporary art.

However, any dealings with Guggenheim Investments are not likely to involve a pure play in silver or other commodities, or even difficult-to-measure alternative investments such as art. Roughly half of Guggenheim Investments’ 60 ETFs are either Equal Weight ETFs or BulletShares Bond ETFs.

Equal Weight ETFs contain each component of the fund equally at the time of inception and periodic rebalancing. An Equal Weight ETF also may capture some of the benefits of small-cap investing, since such small-capitalization companies outperform large-cap firms historically.

In turn, BulletShares are a fixed income investment, matching the performance of a group of bonds that mature in a specific year. The use of an ETF avoids the inconvenience of actually tying up your money for a period of years. The use of an ETF also allows you to buy or sell the investment in a liquid market, just as you could with a widely traded stock.

The current least mature BulletShares ETF is the Guggenheim BulletShares 2022 Corporate Bond ETF (BSCM). With an inception date of July 16, 2013, BSCM has been trading steadily above its 50-day moving average ever since it reached 50 days of trading history. So far in 2014, BSCM has gained 2.56%. The fund also issues a regular monthly dividend; since September 2013, the dividend has averaged $0.057.

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If you’re not interested in a fixed income or Equal Weight ETF, Guggenheim also has other strategies for diversifying your portfolio and increasing your exposure to an array of market segments, including several small-cap, developing market and strategic ETFs. No matter which path you pursue, Guggenheim Investments has alternative methods for investing in traditional assets.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed them, I encourage you to read my articles from previous weeks about ETF providers PowerShares, WisdomTree, First Trust, ProShares,  Vanguard, iShares and State Street. I also invite you to share your thoughts below.

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As most of us expected, the Fed announced today that it was tapering its bond-buying program by $10 billion per month; however, there was a significant change in the central bank’s forward guidance.

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