80 years ago today, FDR said “the only thing we have to fear is fear itself.” Life was simpler back then, today we have to fear bad meat, planes falling from the skies, unsupervised children, starving old folks and other calamities brought on by a 2.3% reduction from the expected level of federal spending. Like it was during the last crisis 2 months ago, Quant is unmoved by this one. The S&P 500 still leads the ranks with SPY and IVV in 1st and 2nd place. Energy continues to be the favorite sector with XOP and XLE in 3rd and 4th. Quant is also unmoved from its low risk stance with today’s top 10 having an average Red Diamond Risk Rating of only 3.78 compared to 4.6 for all equity ETFs. Is there something else to fear like China or Italy?
One low risk fund that has been climbing the ranks recently is the SPDR Utilities Select Sector Fund (XLU) getting into the top 50 at 49th place today. It got up around this level when it continued to rise as the S&P faltered over the last two weeks. That has helped it achieve a decent 75.3 technical score with its short term 85.3 leading those categories. Fundamentals are good but not great at 66.7 with a similar sentiment score leaving plenty of room for all to improve. The metrics are good enough to earn a solid 8.36 Green Diamond Reward Rating and if there are darker hours ahead you can rest easy with its very low 1.39 Red Diamond Risk Rating.
Only a foolish optimist can deny the dark realities of the moment but Quant thinks the S&P 500 will remain as the place to be in coming months. Those S&P 500 and energy funds have been holding top ranks since late last year and they have led the world equity markets since then. That will bring our comparison to that benchmark down when we publish the monthly updates but we are proud to be directing you to the sweet spots of the market on a consistent basis. Financial professionals have registered a mandate that they want direct and clear ratings based on vigorous analytics. ETFGsm is providing the leadership the industry is calling for. Thank you for reading and good luck with the sequester.