Jan

12

For a core holding component of your portfolio, that is, if you run a "core and satellite" strategy like we generally employ at Chippewa Partners, you will want to own the Rydex S&P Equal Weight ETF. This fund weights its portfolio in equal amounts vs. rewarding larger positions to companies with the biggest market capitalization. This difference means that the smaller members of the S&P 500 can influence returns just as much as its largest constituents like General Electric, Microsoft, or WalMart. And that adds up: This exchange-traded fund has returned 12.5% over the last three years, two-and-a-half percentage points better than the S&P 500. I pitch this name to everyone, everywhere, in every meeting, in every seminar. When I tell stockbrokers or financial planners to own it, they usually look at me with the same blank stare that I get when somebody mentions the word "calculus" to me. It is a market beater. Do the math, run the historical returns. Small beats big over time, even in the S&P names.


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