Monday, November 12, 2012

Happy Veterans Day to all those who have served, your country salutes you.  We thought we would use the occasion to highlight two funds devoted to the defense industry, the iShares Dow Jones U.S. Aerospace & Defense Index Fund (ITA) and the SPDR S&P Aerospace & Defense Fund (XAR).  Both have had a tough few days since the election but XAR has held up a little better and is still above its 200 day moving average giving it a 69.1 Technical Score to ITA’s 65.9, both good scores but significantly lower than a week ago.  If you are looking to buy in quantity, ITA is the more liquid choice as XAR has quite a few zero volume days, that gives ITA a higher Quality Score.  Volume may not be too important if you put in small trades so maybe consider that XAR’s 35 positions are more evenly weighted with the largest, Precision Castparts Corp. at 4.85% of AUM, where ITA has almost 9% in United Technologies.  Fundamentally, XAR edges slightly higher than ITA at 66.1 vs 65.7 but ITA has a slightly better Sentiment Score of 56.4 vs 56.1 for XAR.  Not surprisingly, these two funds are also very closely ranked in Quant today at 122nd for ITA and 128th for XAR.  Again, not bad ranks but they have been moving down which you don’t want to see.  The lower ranked XAR actually gets a higher Green Diamond Reward Rating of 8.09 to ITA’s 7.99 but it comes with a higher Red Diamond Risk Rating of 4.36 to ITA’s 3.78.  Whether or not you think the companies in these funds will be thrown over the fiscal cliff may determine your prerogative on them, we just wanted to show some props to those who have served our country.

If you are looking for ideas, Quant’s higher ranks are a better place to search.  China rules those ranks as the county chooses its new ruler, FXI and GXC are back in 1st and 2nd today.  Things are heating up in the Middle East and the little plastic thermometer is popping out of the iShares MSCI Turkey Investable Market Index Fund (TUR), it has a low Global Theme Score of 51.9 but that’s offset by the rest of the measures averaging in the respectable 70’s.  It’s been ranking well recently but not as well as today’s 8th place.  Another climber is the WisdomTree Emerging Markets High-Yielding Fund (DEM) rising 53 positions on higher Behavioral Scores to 11th place.  The move confirms other emerging markets funds scoring well such as iShares’ EEM remaining in the top ranks at 5th place today.  That one broke into the top 10 after Bernanke announced QE3 and has stayed there almost the entire time since.  While the market has lost about 5.5% since then, EEM is only down by 2.1%, another example of Quant’s ability to keep you in the right names through good times and bad.  We’ll save some other new high rankers for tomorrow, until then thanks for reading us and thank you to all those who have served our country, especially those fighting today to preserve our freedom.

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