E Revenue Shares Financial ETF 22% Outperformance Since 2008 Over XLF

Revenue Shares Financial Sector ETF (RWW) is a financial ETF that is weighted based on company revenues, not the usual market capitalization.  This subtle difference has created an ETF that has substantially outperformed the S&P Financial ETF (XLF) since its inception in Oct 2008 – even though both hold the same stocks just different allocations. 

Revenue Shares Financial Sector favors financial stocks that represent the largest revenue generators in the sector, regardless of the sub-class or market capitalization.  This focus leads to an interesting portfolio of large financial stalwarts.  The weighting concentrates the portfolio with 85 stocks, but the top six positions comprise 41% of assets and the top 11 comprise 60% of assets.  Below is the latest portfolio of the top six stocks:

Berkshire Hathaway               13.33%

JPMorgan Chase                     7.29%

Bank of America                     6.35%

Wells Fargo & Co                    6.16%

MetLife Inc                              4.87%

American Insurance Group     4.61%

Rounding out the top 11 positions, Prudential Financial (PRU), Goldman Sachs Group (GS), Morgan Stanley (MS), Allstate (ALL), and American Express (AXP) each comprise between 2% and 3% of assets.

According to Morningstar, a $10,000 investment in 2008 would be worth almost $27,000 today compared to $21,000 for a similar investment in S&P Financial ETF XLF.