Thursday, November 8, 2012

Was it the election or the weakening German economy?  Whatever the cause, stormy weather returned to Wall Street yesterday as all asset classes took hits.  Our benchmark ETF Global 1000 Index lost 1.3% on the day that every Asset Class, Geographic and Sector index lost value in the worldwide selloff.  While the S&P 500 lost 2.37%, Quant’s top 25 from the day before had an average one day decline of a lesser 2.07%.  The familiar top 2 rankers, iShares’ FTSE/Xinhua China 25 Index Fund (FXI) and the SPDR S&P China Fund (GXC) were not immune from the day’s foul weather but each have gained about 6% since the S&P 500 began its current correction of about -5% thus far. Both funds remained in the top ten for almost the entire 2 months of selling and still occupy 1st and 2nd place.  Despite its 5% loss, the S&P 500 is still up 9.11% from its June 1st low, although down from its 14.69% peak.  Quant’s top 25 from June 1st included FXI (GXC made the top 50) and have an average return of 13.13% as of last night and they got as high as 19.68% at the peak.  Outperforming a rallying and correcting market by 34% and 44% respectively is what sophisticated institutions look for in their models, so take a look at Quant and all the other ETF Global offerings if that’s what you’re looking for too.

As for how the selloff affected Quant’s equity ETF rankings, today we see more US based funds gaining the top ranks on higher Sentiment and Fundamental scores.  Vanguard provides three examples of such funds joining the top 10.  Their Information Technology Sector Fund (VGT), Growth Fund (VUG) and S&P Mid-Cap 400 Growth Fund (IVOG) find themselves in 4th, 5th and 7th place this morning after each one gained more than 25 positions.  The funds that moved aside for them tend to populate the international markets that Quant has been favoring over recent weeks.  Regarding our candidate proxies, Obama’s XLV was only down 1.7% on the day where Romney’s KOL lost 5.5%, both saw their Quant ranks drop a little bit, but KOL still ranks higher at 37th place compared to XLV's 80th.  With US funds ranking higher today, maybe Quant is saying our politicians will come to their senses and avert the fiscal cliff, or maybe Quant doesn't know US politics.  Time will tell but as the prior paragraph attests, Quant’s message deserves any equity investor’s attention.  The weather looks better today so enjoy the snow if you are in the NY metro area.  As long as you still have a warm home awaiting your return.

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