Anyone want to get back on that gold bandwagon? As fear is gripping world markets, those gold mining sisters are getting sweet kisses, each jumping more than 5% yesterday with a long way to still recover their recent declines. Their return to Quant’s top 10 is indicative of subtle changes in the rankings recently. We covered the countries in Quant’s top 100 Wednesday and today we will cover the 35 sector funds among that group.
Energy is no longer the clear favorite but still has XOP and IEO in 2nd and 6th place with 5 other funds bringing the sector’s average Quant score within the top 100 to 67.39. Technology has 8 funds in the top 100 led by IYW and VGT tied for 7th place. The sector has 1 more fund and a higher average Green Diamond Reward rating but lower average Quant Score of 66.6. When we did a similar sector look on April 26th we saw 9 basic materials funds but only 5 today. However the aforementioned mining sisters, GDX and GDXJ have moved up to 3rd and 4th place closely followed by industrial metal fund XME in 5th place. Two other mining funds give the sector the best average rank of 24, best average Quant Score of 69.2 and best average Reward Rating of 8.83, among the top 100. So it looks like the mining sub sector of basic materials is Quant’s favorite today.
There are 5 industrial funds on our list but only PRN makes the top 25 at 18th place. The consumer staples sector has 3 funds led by VDC also making the top 25 at 23rd place which is slightly better than health care with 3 funds but the highest ranking is IHI at 44th. Telecomm only has 1 fund in the top 100 but IYZ is in 10th place scoring 69.2. Offering something for everyone today, the remaining three sectors are also represented with XLF as the best financial fund in 59th place and utilities at 95th with VPU. Consumer staples also has 1 fund but it is Chinese based CHIQ ranked 87th today.
Quant’s top 100 ranked funds have an excellent record of outperforming the S&P 500 and all ten sectors represented in that group today signals a transitioning market; precious metals funds scoring so well suggests fear is playing a role in the transition. The economy can probably handle long term rates above 2% but can all the leveraged bond managers? Maybe it’s Japan’s inability to bring rates down despite massive liquidity or maybe it’s the Mets sweeping the Yankees – something feels amiss. Fortunately Quant doesn’t have feelings, just proven objective analysis so check in each day to see what the ETFGsm models have to say. Thanks for reading and stay cool this weekend.