Categories: Exchange Traded Funds (ETFs)U.S. Investing

Small-Cap Fund Shows Big Results

Although success has been difficult to find in the market for the first half of 2015, some exchange-traded funds (ETFs) have eked out impressive gains. Following the last ETF Talk about the #1 U.S. equity performer in that time frame, this week will highlight the silver medalist: the Guggenheim S&P SmallCap 600 Pure Growth ETF (RZG).

This fund tracks a subset of the S&P SmallCap 600 index. It chooses its holdings based on sales growth, earnings increases and, like the most successful fund of the half, momentum.

The small-cap stocks chosen by this method have been performing admirably so far this year. In the first half of the year, RZG increased in value by 11.43%. The fund also provides a small 0.61% yield to go along with its 0.35% expense ratio. Assets managed for this fund come in at about $196 million.

The chart below shows the performance that earned the fund a place in this column. Since tracking began in January, it achieved its stellar results simply due to superior growth, not a well-timed dip.

RZG’s holdings are most concentrated in the healthcare, financial services and consumer discretionary sectors. Its top 10 holdings account for 16.52% of its managed money.

Some favorite holdings include Lannett Co. (LCI), 2.26%; Taser International Inc. (TASR), 1.96%; Gentherm, Inc. (THRM), 1.75%; Take-Two Interactive Software (TTWO), 1.71%; and Repligen Corp. (RGEN), 1.55%.

If this impressive performance and strategy pique your trader’s senses, investing in Guggenheim S&P SmallCap 600 Pure Growth ETF (RZG) may pay off for you.

Watch for my description of the third-ranked U.S. equity fund for the first six months of 2015 in my next column.

Exclusive 10 Reasons to Day-Trade with Mentors in a Virtual Room

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF 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 it, I encourage you to read my e-letter column from last week about the best-performing ETF of 2015’s first half. I also invite you to comment in the space provided below.

Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/