Every day, one equity ETF earns the ETFGsm 10 Green Diamond Reward Rating. Today it’s the Powershares Dynamic MagniQuant Fund (PIQ) which may sound familiar because we highlighted it in our March 6th post about smart beta funds ranking well in Quant. It was in 11th place then and 7th today (Quant’s rankings differ slightly from the Diamond Ratings). You may also remember it from back in December when it held Quant’s top rank for three straight days. It actually earned 10 Green Diamonds on 8 different days in December and if you bought on any of them you are very happy today. Year to date, PIQ is up about twice as much as the S&P 500 and there aren’t many other ETFs that have done that.
Regular readers know these smart beta funds fill a niche between active and passive management in that they change their portfolios on a periodic basis, quarterly in this case. The portfolio that scored and performed so well back in December is not the same as the one that was reconstituted in February so concerns about it being overbought may be misplaced. A look at its tear sheet shows a very healthy Fundamental Score of 89.2 and its sector exposure covers all ten with more than half of AUM in consumer discretionary, financials, and industrials. The tear sheet also shows all 200 holdings crossing a wide range of market caps but sharing one common attribute, the US flag next to each one. Yes, the models still favor the US and PIQ’s Red Diamond Risk Rating of 3.99 keeps with the consistent low risk theme we have also been seeing.
We have high hopes for PIQ because it is a new constituent in our own smart beta ETFGsm Quant Equity 10 Index. Light trading disqualifies it from our Golden Dozen Index but its constituents trade enough to provide sufficient liquidity to meet most needs. Our 10 Green Diamond funds have an excellent record of outperformance and you can find them each day by clicking on the header to sort the Reward column on our scanner which is one more powerful ETFGsm tool to help you stay ahead of the markets. Thanks for reading and good luck this week, it looks like it could be a rocky one.