As we celebrate Dow 15,000 Quant is looking for the next party. 4 foreign funds are in today’s top 10 which is reminiscent of last fall when foreign markets were leading. We have been sensing a shift for a couple of weeks but are hesitant to declare it yet as some US broad market funds still hold elite ranks such as today’s 1st place PowerShares Dynamic OTC Portfolio Fund (PWO) which has scored well all year with performance to justify. It is also today’s 10 Green Diamond fund for the 14th time in the past month.
Those foreign names are led by the 2nd place iShares MSCI Malaysia Index Fund (EWM) at its best score and rank all year. Markets have applauded the status quo elections there boosting the Behavioral Score which does better than the Fundamental but we are seeing a lot of that lately as world markets shrug off economic troubles and ride the wave of central bank liquidity. Canada is the opposite however with a lagging chart restraining the Behavioral metrics on 6th place EWC but its Fundamental Score is a healthy 73, albeit down from the low 80s in recent weeks. We wrote about France’s EWQ on Monday and it continues to score well in 7th place today driven by a high 90.2 sentiment score which suggest the technicals will also soon improve but we can only hope for its mediocre 63 Fundamental Score to see better days. Economic optimism may be more reasonable in Australia where EWA is tied at 7th place with similar scores led by its 88.5 sentiment score but middle of the pack technicals at 51.3 and a little better Fundamental Score of 67.7. Almost making the top 10 are Germany’s EWG and Switzerland’s EWL at 12th and 14th place with the former getting there on sentiment but the latter on fundamentals.
We have been getting tired of Quant’s US focus making it impossible for our top ranked funds to outperform the S&P 500 since December, so these international ideas are welcome. Those US funds have been leading world markets all year so as long as our users are happy we are happy. We will see how this international message develops over coming days so please check in each morning to stay abreast. The ETFGsm models have consistently identified the best performing equity ETFs for the intermediate term and are saying it may be time to venture off the US island in the storm.