Friday, November 16, 2012

Yesterday we took a deep dive into how Quant analyses two high ranking China funds, today we want to take a deep dive into other parts of ETF Global.  Our most popular offering has been our tear sheets, enter any ticker in the upper right search box and you will get a concise document that you can print or email as a PDF.  Check with your compliance department before sending to clients but it’s fine with us, we appreciate getting our name out there.  All products get a Red Diamond Risk Rating based on dozens of daily measures regarding the product’s composition, historical trading history and quality.  All equity ETFs also get a Green Diamond Reward Rating based on our Quant model that has proven adept at identifying relative outperformance.  Both ratings are on a scale of 10 and like any investment you want high reward and low risk.  Or maybe you think the market is about to rally and you want a high risk product that is likely to move by a higher magnitude.  In that case make sure to check out the Red Diamond Risk Rating page under the Research button.  You can search by a particular fund or ticker and sort by any of the columns to make it easier to see which have high volatility or deviation and low risk in the other structural categories.  One risk to consider when building a position is the durability of the product, tracking error can spike when a product announces a closure so it’s best to avoid that.  Under the Risk Analytics button you will find our Liquidation Watch List which is compiled monthly by screening all products by three measures which are explained on the report.  Appearing on the list does not guarantee closure nor does absence from the list ensure a fund will stick around, but checking for inclusion is a good step in any advisor’s diligence process.  For your individual equities, you will want to check any stock’s exposure to the world of exchange traded products.  Our Grey Market report is accessed by entering a stock ticker in that same upper right search box.  You will not only see all the funds that own the shares, but also all those leveraged and inverse products that track an index which includes the stock and its implied exposure based on their particular leverage ratio.   You won’t find this kind of data anywhere else.  We continue to add functionality to our ETF Scanner so if you are looking for a product with certain characteristics play around with all the choices you have available.  If you wish to screen by something not available please let us know, your feedback is helping to constantly enhance our offerings.

This brings us to the heart of ETF Global, Quant.  The algorithm measures dozens of daily data points on every equity fund using cutting edge behavioral finance and traditional fundamental analysis.   Our top rankers have an excellent record of outperformance exemplified by the two China funds, FXI and GXC that have been leading the pack for months and hold 1st and 2nd place today.  They have seen some selling over the past couple of weeks but are still above their September levels which few other funds can say.  The pan European SPDR DJ EURO STOXX 50 Fund (FEZ) has been scoring well and today it has risen 21 positions back into the top 5 at 4th place.  Other European funds are also scoring well today as they have recently so look over recent blog posts for those ideas or look at the whole list under the ETFG Quant button.  A quiet riser that we haven’t highlighted yet is the Powershares Dynamic MagniQuant Fund (PIQ), a quant fund that tracks the Dynamic MagniQuant Intellidex Index, it holds 14th place today.  The fund is down like the rest of the market so its Behavioral Score is a middling 51.4 but the selloff has driven its Fundamental Score up to a very impressive 97.1 meaning it’s about as cheap as it’s ever been.  Better price action would drive its Behavioral Score higher so we will keep our eye on this one.  Please keep your eyes on all that ETF Global has to offer and feel free to contact your sales rep or for more help.  Please keep the feedback coming, we are here to serve you.

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