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This High Beta ETF Is Performing Well Amid The Trump Rally

Wednesday, November 23, 2016 11:41
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The recent rebound rally in tech-focused names has us thinking about “High Beta” stocks, and more specifically ETFs that are classified as “High Beta” to get a sense of how they are doing lately.

SPHB (PowerShares S&P 500 High Beta Portfolio Expense Ratio 0.25%) has been around since May of 2011, and has had a decent year thus far in 2016 by pulling in over $560 million in new assets via creation. After an impressive rally throughout the month of November the fund is presently trading at its highest levels since the spring of 2015, where the previous intraday trading high was $35.26 (SPHB has traded as high as $36.01 today).

When we break down the underlying sectors that have the heaviest weightings currently in SPHB and are responsible for the recent vault in performance, we see a considerable weighting to Financial Services (32%) followed by Energy (27%), with lesser weightings to Technology (15%) and Consumer Staples (7%), followed by other sectors. It is no secret that both Financial Services and Energy in general are among some of the best sector performers since the U.S. Presidential election results, and that this is clearly benefitting this particular fund in the short term.

When we look at top holdings within SPHB we see the following: 1) WMB (1.77%), 2) CHK (1.71%), 3) FCX (1.57%), 4) WDC (1.41%) and 5) APA (1.37%).

PowerShares had formerly offered two “High Beta” structured ETFs that target the International markets, namely EEHB (PowerShares S&P Emerging Markets High Beta Portfolio) and IDHB (PowerShares S&P International Developed High Beta Portfolio), but these funds have subsequently closed due to apparent lack of investor interest.

High Beta is often associated with “Momentum” in the stock picking world as well, which also has us looking at iShares’ MTUM (Edge MSCI USA Momentum Factor, Expense Ratio 0.15%, $1.8 billion in AUM) which has also had a prosperous 2016 in terms of raising new assets (over $664 million in) in spite of lagging performance when compared to a fund like SPHB.


Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch

paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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