Monday, January 28, 2013

Last Thursday we wrote about the large cap iShares Russell 1000 Fund (IWB) catching a wave into Quant’s top 10 as an example of US funds dominating the elite ranks.  Several small cap funds have also been scoring near the top and today we see some mid caps getting their turn in the top 10.

If you take the smallest 800 constituents out of that Russell 1000 fund you get the Russell Midcap Index. The iShares fund that tracks it, IWR, is one of today’s biggest movers jumping 39 positions into 10th place.  Big moves like that often result from big moves in the Sentiment Score and this one went from 49.2 on Friday to 69.1 today, option activity is most responsible there.  Its technical scores are very nice led by an 84.3 short term score as mid caps are showing up on a lot of leader lists.  Like much of the US market, the rally is stretching valuations but these mid caps get support from recent dividends boosting the yield score.  Enjoying similar but slightly better scores across the board is iShares’ other mid cap fund, IJH, this one tracking S&P’s MidCap 400 index.  It has half the number of constituents but twice the AUM at over $14 billion.  The weightings look a little different so take a look at each tear sheet and see which pie charts best align with your other investing themes.  IJH’s higher scores get it up to 6th place which is 17 positions higher than Friday, another nice move attributable to option activity boosting its Sentiment Score.

Those option traders have moved on from the aforementioned IWB.  Despite its better valuation and high short interest, lack of option activity and a low volatility score have knocked it down to 52nd place.  That doesn’t mean it should be sold as those ranks provide plenty of outperformers, it just suggests to wait for an opportunity with better buying characteristics.  Sentiment Scores are Quant’s more volatile ones but through all the noise the US theme remains clear.  Within that, we see energy, technology and materials continuing to score well.  Whatever size or sectors you may be considering, check in with ETFG and Quant will let you know which is just right each day.  Thanks for reading and good luck this week.

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