Under The Hood: King CONG?

The word consistent has been left for dead in the world of investing this year. Frankly, the only thing that has been consistent is, well, inconsistency. So what about an ETF that implies that it gives investors a leg up when it comes to consistency? Well, if nothing else, it would make for a fine “Under The Hood” candidate and that's exactly what we're doing with the newly minted Russell Consistent Growth ETF CONG. Remember, this usually is the time of year to be involved with growth stocks, so the Russell Consistent Growth ETF might just be worth a look right now. Like any other stock or ETF with the growth label, CONG has struggled in terms of performance this year, slumping almost 8% since its May debut. However, let's give credit where it is due and mention that CONG has sharply outperformed the growth stock-heavy Nasdaq since inception. And it should be noted that CONG has done a fine job of attracting assets under management. In a challenging environment for growth stocks, CONG has raked in almost $23 million in AUM. The 176-stock ETF features an expense ratio of 0.37%, which can be characterized as decent for this spectrum of ETF. Not surprisingly, tech names account for almost 30% of the ETF's weight while consumer durables and consumer discretionary stocks each get allocations approaching 18%. Staples, health care and energy all have weights above 7%. To be sure, CONG does blend growth and consistency among its holdings. Apple AAPL and Google GOOG certainly fit the growth label while other top-10 holdings such as Dow components Coca-Cola KO and McDonald's MCD along with PepsiCo PEP fit the consistency label. One quibble: Cisco Systems CSCO is also a top-10 holding in CONG, but this isn't a growth stock and the only thing consistent about it is disappointing performance. On the other hand, we'll give CONG credit for not being too heavy on financials. That sector represents less than 7% of the ETF's weight and accounts for less than 10 of 176 holdings. For investors looking for a more conservative approach to the tech sector and/or growth stocks, CONG represents a solid option. After all, it has proven to be a better bet this year than a Nasdaq Index Fund. The ETF would show improving technicals on a move above $48.