If you don’t know the significance of June 6th, ask an old man. If he’s in his 90s he will tell you about the Normandy Landings and how it marked the birth of the US superpower. America’s technology industry is most responsible for our modern superpower status and two tech funds dominate the Quant rankings this morning. We call it India-Yankee-Whisky, the 1st place iShares Dow Jones U.S. Technology Index Fund (IYW), and today’s 10 Green Diamond fund. In 2nd place is the Vanguard Information Technology Fund (VGT) with a 9.33 Green Diamond Reward Rating, and like IYW, a low Red Diamond Risk Rating below 4.
Both funds rank so high thanks to very strong Fundamental Scores in the 90’s as the technology sector is the rare one where fundamentals have outpaced price gains. Part of the reason is their price gains have trailed the monster rally this year although both are leading the S&P 500 on the last leg up since April 19th, as well as the current leg down since May 21st. That helps their technical scores which each come in around 70. Their weakest scores result from the common knowledge that these finest companies in the world are also among the world’s best values, leading to identical but middling sentiment scores of 53.1.
The 2nd place VGT does better on the Quality Score due to its 82.2 diversification score and a look at its Tear Sheet explains why. Its 416 constituents with Apple weighted at 13.64% score better than IYW’s 136 with Apple weighing 16.44%. Beyond that you might be more interested in the Industry Group exposure showing VGT with 52.2% of AUM in software and services and 34% in hardware while IYW has less software and more hardware. The popular ETFGsm pie charts even give you detail down to the sub-industry exposures.