Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you like the idea of investing in spun-off companies because many of them are being spun off to unlock value, the Guggenheim Spin-Off ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The spinoff ETF's expense ratio -- its annual fee -- is 0.65%. That's a bit higher than that of many ETFs, but also considerably lower than that of most stock mutual funds. The ETF is small, too, so if you're thinking of buying, beware of occasionally large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.
This ETF has performed reasonably well, roughly matching the S&P 500 over the past five years, on average, and beating it over the past three. But it's also very young, with just a few years on the books. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
With a low turnover rate of just 2%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Plenty of past spinoffs had strong performances over the past year. Philip Morris International
Not every spinoff was a winner, though. Lender Processing Services
The big picture
A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.