Friday, January 25, 2013

We’ve been following Quant’s US focus in this space all month but have also promised a look at the other countries scoring well, so let’s take a tour of Quant’s world this morning.  Most of the international funds come out of iShares so we will conserve time and space and just use tickers.

Bundle up because we begin in the Great White North where Canada’s EWC is at its highest rank all month in 40th place on high sentiment readings.  When it's dark here the sun rises Down Under where Elizabeth is the Queen of Australia, the country occupying Quant’s 16th place with EWA tied as the highest scoring foreign fund, again mostly driven by rising sentiment measures. Australia is also well represented in a couple of Developed Asia funds.  The country comprises almost 64% of 55th place EPP and a lesser 26% of 70th place VPL.  China’s FXI did so well for us throughout the fall and is still scoring well in 35th place.  Just because it dropped out of the top 10 doesn't mean it needs to be sold; as this post suggests, the top 100 have a good record of outperformance even though this one is lagging slightly YTD.  The same could be said for Emerging Markets fund EEM in 59th place today.  While we’re in the neighborhood, Indonesia is the only foreign country with two funds in today’s top 100, EIDO in 52nd place and IDX in 64th. Both of them see fundamental scores driving them into the top decile.  Neighboring Malaysia does even better with EWM in 49th place on strong fundamentals and rising sentiment readings.  Moving up the development chart but down in rank brings us to South Korea where EWY barely makes the cut ranking 98th on a Sentiment Score of 84.5.  That’s a coiled spring that could provide a trading opportunity for you more aggressive readers.  You also need an aggressive investment view to put money in Russia and if that is you, consider RSX in 80th place, also with a high sentiment reading of 82.8.  Mario Draghi is giving Europe a boost with some friendly commentary out of Davos today.  Quant was ahead of him as Europe has been gaining in rank recently.  While 48th place EFA is mostly Europe, 23rd place FEZ and IEV in 88th place are all Europe and the better scoring two get there again on strong sentiment readings.  Looking more specifically at a couple of weak sisters in Spain and France see their respective EWP and EWQ in 30th and 33rd place also on strong Sentiment Scores but Spain sees a good Fundamental Score of 74.2 as well.  Germany’s EWG comes in 38th place today also on bearish sentiment readings that score well in Quant’s contrarian algorithm.  It’s a different story with Switzerland’s EWL which was highlighted Tuesday and still ranks in 16th place, tied with EWA as Quant’s highest ranking foreign fund.  Good old technicals and fundamentals keep it up in those elite ranks.  Some people consider it Europe and readers will remember that Turkey’s TUR was a great performer for us since it began scoring well around Thanksgiving.  It is still outperforming and giving us a good example that  funds ranked as low as this one’s 81st place still tend to outperform the market.

Today’s top 100 also see 8 funds classified as global and mostly focused in the basic materials sector.  The most notable characteristic of today’s group of 100 is that 75 of them are US funds, a number that usually falls closer to 50.  So Quant still likes the US but the high sentiment readings for some of those foreign funds suggest they could be due for a pop.  Thanks for reading and have a nice weekend.

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