ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF Spotlight: Spin-Off ETF (CSD)
News
Share

ETF Spotlight: Spin-Off ETF (CSD)

Daniela Pylypczak-WasylyszynMay 06, 2015
2015-05-06

The vast majority of the most popular ETFs offer investors access to a broad, diversified group of equities. But for those looking for a unique twist on the equity space, the Spin-Off ETF (CSD C) may be a compelling option.

Inside CSD's Strategy

picture of bull

Guggenheim’s Spin-Off ETF (CSD) offers investors unique access to a particular subset of the IPO market — spin-offs. The fund obtains its objective by tracking the Beacon Spin-off Index, which is comprised of U.S.-listed stocks that have spun-off within the past two years (but not more recently than six months prior to the applicable rebalancing date). Though these spin-offs are primarily small- and mid-cap companies with market capitalization of less than $10 billion, the index does not place limitations on market capitalization.

The theory behind this strategy is quite simple. Spin-offs are created by companies that have separated and sold off a portion of their business as a new entity. Generally, these spin-offs are quite successful and profitable, as smaller, more targeted companies are quicker to adapt to changes and typically dedicate all of their resources toward core operations.


Content continues below advertisement

CSD's Portfolio

CSD’s portfolio consists of approximately 40 individual holdings which represent the highest ranking stocks from the universe of spun-off companies. These securities hold the highest composite scoring of several growth-oriented, multi-factor filters. Because of the fund’s methodology, it is important to note that CSD’s portfolio may change significantly: the fund rebalances semi-annually, though if there are not enough new spin-offs to populate the index, a rebalance may be delayed.

As of 5/5/2015, CSD’s portfolio consisted primarily of small- and mid-cap stocks from a wide array of sectors including consumer cyclicals, health care, real estate, industrials, consumer defensive, and technology.

Considerations on CSD's Performance

Given the fund’s rather shallow portfolio, it is important to note that the top ten securities receive hefty allocations (roughly 50% of AUM is allocated to the top 10 holdings) , meaning the performance of CSD is greatly dependent on the performance of only a handful of companies. Additionally, CSD’s tilt toward small- and mid-cap firms should also be weighed, as these companies are inherently riskier than their large-cap counterparts.

How to Use CSD in a Portfolio

For those looking for a cheap and efficient way to capitalize on the spin-off market, the Spin-Off ETF (CSD C) is a compelling option – not to mention the only option that specifically targets this corner of the IPO market. While the fund’s portfolio is relatively diverse, CSD may be more appropriate for those investors with higher risk tolerances, as spin-offs are inherently more volatile than traditional large-cap companies. CSD is, however, a nice middle ground to any investors looking for superb growth opportunities, as spin-offs are generally more stable than traditional IPOs.

CSD charges an expense ratio of 0.66%.

The Bottom Line

The Spin-Off ETF (CSD C) is a unique option for those looking to gain direct access to companies that have recently spun off. Additionally, its unique rules-based methodology offers investors great potential for capital appreciation. As always, be sure to do your own research in order to determine whether or not this ETF fits into your overall strategy before making an allocation.

Follow me on Twitter @DPylypczak.

Disclosure: No positions at time of writing.

» Popular Pages

  • Tickers
  • Articles

Feb 03

Main Management Market Note: February 3, 2023

Feb 03

SPYI, a High-Income ETF Within Equities, Up 10%

Feb 03

Navigating Exchange FOMO for Advisors

Feb 03

In 2022, Main Supply of EU Electricity Was Renewable

Feb 03

VettaFi’s ETF Rising Stars: January 2023

Feb 03

Big Tech Is No Longer Certain; Consider Active

Feb 03

Equal-Weight Cloud Computing ETF WCLD Hits Buy Signal

Feb 03

American Century's KORP, VALQ Hit 5-Year Mark

Feb 03

Bitcoin Opens 2023 Strong, Outperforms Bonds

Feb 03

These 2 ETFs Show Growth Is Back in Style

QQQ

Invesco QQQ Trust

SPY

SPDR S&P 500 ETF Trust

VOO

Vanguard S&P 500 ETF

VGT

Vanguard Information...

SMH

VanEck Semiconductor ETF

XLK

Technology Select Sector SPDR...

VTI

Vanguard Total Stock Market...

SOXX

iShares Semiconductor ETF

BLOK

Amplify Transformational Data...

META

Roundhill Ball Metaverse ETF


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X