Intellectual Property Makes ETF Look Smart

This would be consistent with the back-test done before the fund first listed. Over the life of the back-test (1997 through Nov. 30, 2006), the underlying index outperformed by an average of 3% per year, and it had a better year than the S&P 500 only half the time.

OTP does have one big problem: It has very little volume and assets (1,350 shares per day and $10 million in assets, according to Yahoo! Finance). Claymore shut down 11 funds a few months ago for lack of assets and trading volume. I doubt it wants to shut down more funds so soon, but this risk does exist. The potential consequence to investors is a taxable event: When a fund closes, it pays out the net assets as of the last day. So, in other words, investors don't lose all their money.

Looking beneath the hood in this manner is probably only useful for people who are willing to take a more tactical approach to investing. I believe OTP shows that tactical success can be achieved with broad-based products, as opposed to just with individual stocks, country funds or sector funds.