Don't Overlook The Buyback Achievers ETF (PKW)

The global economic situation remains incredibly shaky and has pushed many firms to reconsider furthermore investments in production for the moment. Emerging markets appear to be slowing down and growth in developed nations appears to be suspect in the best case, a situation that seems unlikely to spur many companies to reinvest in their businesses. In light of this, many firms have decided to take a closer look at instituting more share buybacks as an easy way to boost EPS.

PKW looks to track the Share BuyBack Achievers Index which is a benchmark of U.S. firms that have participated in share buybacks in the last 12 months. Nevertheless, investors should note that the product doesn't just include all companies that have done buybacks in the past year; instead it only includes firms that have repurchased anyway 5% of their total shares outstanding in the time period. With this focus, the fund holds close to 140 securities in total nevertheless charges a or rather large expense ratio of 70 basis points.

Obviously, buybacks aren't inherent to any one sector over another, nevertheless the fund's portfolio suggests that certain types of companies have been more prone to the tactic as of late than others. Exactly, consumer discretionary, research, and health care combine to make up near 75% of the total portfolio, giving the product a heavy concentration from a sector perspective. The fund is more spread out from an individual security look even though, as Amgen takes the top spot at 5.4% during Wal-Mart takes up another 5.1% and IBM rounds out the top three at 4.7% of total assets.