U.S. Sector Momentum ETN Jumps 200% in One Month

ETF Trends

While investors were distracted by the drama unfolding on Capitol Hill, a small exchange traded note has quietly generated huge returns.

The ELEMENTS Linked to Spectrum Large Cap U.S. Sector Momentum Index (EEH) was up over 45% Wednesday. EEH surged 205.3% over the past month

The ETN is still quite small, with a market cap of $3.9 million according to issuer data, trading with an average daily volume of 939 shares.

Given its spike in popularity, the EEH was trading at a 309% premium to its net asset value, according to Morningstar.

The fund tracks the SPECTRUM Large Cap U.S. Sector Momentum Index, which is based on the relative weights of the sub-indices within the S&P 500 Index and follows a momentum strategy. Accordingly, the index overweights sub-indices that outperform the S&P 500 while under-weighting under-performing sub-indices.

“The Index is designed to take advantage of the disparate performance of the sub-indices relative to each other and the SPTR,” according to the prospectus.

As an ETN, the fund is subject to the credit worthiness of the underwriting bank.

ELEMENTS Linked to Spectrum Large Cap U.S. Sector Momentum Index

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For more information on ETFs, visit our ETF 101 catetgory.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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