Wednesday, November 14, 2012

Quant has a clear message today, avoid the USA.  Nine of today’s top 10 are foreign funds and the sole US name is the iShares Dow Jones Transportation Average Index Fund (IYT) in 3rd place.  Those transports will apparently benefit from delivering all that money in planes, trains and trucks to the foreign markets.  The further you can get from home the better. Europe still has a few names in the upper echelon with France (EWQ), Turkey (TUR), and Spain (EWP) coming in 7th, 9th and 10th place.  China gets the familiar 1st and 2nd place ranks with GXC and FXI respectively.  The iShares MSCI EAFE Index Fund (EFA) ties the transports for 3rd place with about half its assets in the UK, Japan and Australia; and the iShares MSCI Australia Index Fund (EWA) comes in 6th place.  EWA has more than a third of its assets in banks suggesting a destination for all those transports carrying our money overseas. Some of that money looks to be going into Hong Kong real estate which comprises almost 30% of the iShares MSCI Hong Kong Index Fund (EWH) which is tied with France at 7th place today.  Rounding out the top 10 in 5th place is the iShares MSCI Emerging Index Fund (EEM) which has been in that group for most of the past couple of months.  Like most investments, it’s down since its September 14 high but only by 3.8% which is about a third less than the S&P 500’s 6.2% correction, another example of Quant delivering outperformance for your investment dollars.  Despite America’s meager representation in the top 10 today, Quant does have a hopeful message for Washington, the next ten positions in the ranks are mostly US funds.

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