Sales growth is back and investors are interested in gaining exposure to this trend according to recent article in Money.
Editor Paul LaMonica writes that the RevenueShares Large Cap ETF (RWL) is tied to an index of large cap stocks that is weighted by revenue instead of the more traditional approach of market-cap weighting. Top holdings in the fund include WalMart, Exxon Mobil and GE.
ETFs that invest in small cap stocks and are weighted on a revenue basis are outperforming the more traditionally market-cap weighted small cap stocks.
In the column, Post-rally, Investors Ask: Where’s the Revenue?, the WSJ’s Donna Kardos Yesalavich writes that the RevenueShares Small Cap Fund (RWJ) outperformed the S&P 600 by 24 percentage points for the year through September 30.
As the gap between revenue-weighting and market-cap weighting is growing, revenue appears to be a better way to pick stocks in an economic recovery.
Revenue weighting appears to also be working for mid-cap ETFs and large-cap ETFs as well. Yesalavich points out that the RevenueShares Mid Cap Fund (RWX) has outpaced the S&P 400 by 14 percentage points and the RevenueShares Large Cap Fund (RWL) is besting the S&P 500 by 4 percentage points year to date.
