NEW YORK (TheStreet) -- The history of the ETF industry includes some very off the wall fund concepts including one from the early days with the Guggenheim Spin-Off ETF (CSD) which began trading in late 2006 as the Claymore/Beacon Spin Off ETF. It was so off the wall I didn't even bother writing about it when it first came out.The fund will celebrate its seventh anniversary in December and its long term performance has been stellar. It has only lagged behind the SPDR S&P 500 ( SPY) for one calendar year in 2008 since its inception. Similarly it only lagged the SPDR S&P Mid Cap 400 ETF ( MDY) in that same year. CSD is more of a mid-cap fund so the comparison to MDY is more appropriate. The basic idea is that CSD owns 24 spun off companies. A stock is eligible for inclusion in the fund from month six through month 30 after the spinoff. A spinoff is defined as a distribution of stock by a parent company or a carve-out where the parent sells only a portion of the subsidiary. The current makeup of the fund allocates 23% to industrial stocks, 22% to consumer discretionary, 17% to energy and several other sectors with smaller weightings including 4% to financials and no exposure to health care. There are no market cap restrictions but the Guggenheim web page for the fund notes that it will focus on small and midcap stocks. Some of the holdings will be familiar like Trip Advisor ( TRIP) which was spun off from Expedia ( EXPE) and AMC Networks ( AMCX) from Cablevision ( CVC). Some will be less familiar like NovaCopper ( NCQ) which came from Novagold ( NG). It is important to note that the makeup of the fund can change over time. In a year or two the sector weightings could be much different and certainly in two years many of the holdings will no longer be in the fund due to the 30 month restriction. The one year that the fund lagged behind the broad market was the crisis year of 2008. While there can be no assurances about future performance a seven year track record is meaningful. The idea behind spinoff investing is that the market will reward the attributes of the new spinoff as a stand-alone company more so than when part of a conglomerate as has been the case with AMCX which is up 90% since its spinoff in June 2011 while CVC has declined 35% over the same period. Waiting for six months before being eligible for inclusion is strategically significant. There can be an effect on spin offs where they initially trade lower due to not being a constituent of the index that the parent firm is in or fundamental investors only wanting to own the parent and not the spin off. An example of this is CSD holding Huntington Ingalls Industries ( HII) which was spun off from Northrup Grumman ( NOC) in April 2011 and went on to decline 38% in its first five months of trading. Since that decline however HII is up 176%. Obviously it will not always work out this way. When Pfizer ( PFE) spun off Zoetis ( ZTS) earlier this year it immediately went up 11% in its first month and is down 6% since then. As a broad based fund CSD could be thought of as a potential core holding. Its strategic overlay makes it similar to the so called smart beta funds discussed in recent articles but like any other smart beta fund with a sound strategy, there can be no assurances that the strategy will always succeed. At the time of publication the author held no positions in any of the stocks mentioned. Follow@randomroger This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.