That was quite a Santa Claus rally that saw the ETF Global Equity Index rise 1.37% and the benchmark all region and all asset class ETF Global1000 Index rise by 1.09% in Friday’s shortened session. The US based Russell Funds we wrote about Friday morning all participated but lagged the one day equity returns. Today’s new entrants into the top 10 suggest something else may be at play. The iShares MSCI Australia Index Fund (EWA) and the iShares S&P North American Natural Resources Index Fund (IGE) both jump into that group today at 5th and 7th place respectively and what they share is a lower than average Red Diamond Risk Rating. They share that attribute with those Russell funds bringing the average Risk Rating for the top 10 down to 4.43, lower than the average for the first decile of 4.51 and the all equity fund average of 4.94 Red Diamonds. We often remind you that Quant does not predict gains or losses but relative performance of equity ETFs over the intermediate term. Quant’s behavioral scores pick up movement of the smart money into the bomb shelters as they perform better than the higher risk names. So when the model ranks low risk funds more highly it could suggest trouble for the broader equity market. Indeed, it was big gains in the behavioral scores that drove EWA and IGE into today’s top 10 as it was those same categories that drove the Russell funds into that group on Friday morning. We hate to take any bounce out of Santa’s step as we enter the strongest season for equities but the question for the remainder of the fourth quarter will be whether Santa’s sleigh can scale the fiscal cliff. Only time will tell if the next month becomes the most wonderful time of 2012, Quant suggests we keep one eye on risk and one on reward.