Monday, December 10, 2012

A couple of recent top 10 members are back in that group as iShares sees its MSCI Spain and Emerging Markets Index Funds (EWP and EEM) back at 8th and 9th place this Monday morning. In 10th place is the iShares Dow Jones US Technology Index Fund (IYW) which has been quietly climbing the Quant ranks for the last couple of months.  The fund has about 85% of its assets evenly split between the Software & Services and the Hardware & Equipment industry groups.  You could consider Apple Inc. to also straddle those groups and it comprises almost 22% of the fund, and similarly straddling IBM comprises 8.51%.  Microsoft is trying to become a hardware provider and it takes 8.42% of IYW. Having almost 40% of its assets in 3 names doesn't leave much room for the other 142 constituents to effect the performance so make sure you like those companies before buying this fund.  Another 8 Green Diamond fund this morning is considered a tech fund and has almost 60% of its assets split between software and hardware but the rest is allocated to the consumer and health care.  That would be today’s 17th place Powershares QQQ Trust Fund (QQQ) tracking the NASDAQ 100.  Apple and Microsoft have lesser 17% and 7.5% weightings and no NYSE listed IBM.  This one has also been climbing quietly over recent months.  Besides those big positions, both funds share very strong Fundamental Scores in the 90s but very weak Technical Scores in the 20s.  It is rare to see such weak Technical Scores in the top ranks but these two have high Sentiment Scores boosting their overall Behavioral Scores which will hopefully boost those technicals soon.  A third technology fund scoring well today has also been a quiet riser and is beginning to outperform the general market.  That one is the iShares PHLX SOX Semiconductor Sector Index Fund (SOXX) in 15th place today. No straddles in this industry specific fund and no Apple either but we do see 3 constituents accounting for more than a quarter of AUM.  The largest, Taiwan Semiconductor Mfg, has gotten a lift on hopes it could replace Samsung as Apple’s primary chip supplier.  Fundamentals here score a very respectable 81.1 and the Behavioral Score is more evenly divided between technicals and sentiment both scoring in the mid 60s.  Its P/E is higher than the other two but its other fundamental measures compare more favorably.  All three funds get 8 Green Reward Diamonds and 4 Red Risk Diamonds but SOXX actually has a lower 3.81 Risk Rating.  Other than that we are seeing higher risk ratings creep into Quant’s higher ranks with the top 10 having an average Risk Rating of 4.7, higher than the top 100 average of 4.26 but still lower than the all equity ETF average of 4.8 Red Diamonds.  We will follow this rising risk theme and thank you for following us, please share any questions or feedback with us at and have a nice week.

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