When world markets were leaving the US in their dust last Fall,
Quant made a shift away from those foreign funds that so dominated its upper
ranks into the US that at the time was mired in the fiscal cliff “debate”. It had been a good ride on a wave that was about
to crest and readers know Quant has been hanging most of its ten toes over the
edge of a US longboard since then. It’s
been another good ride as the US market catches up with those international
markets that provided so much outperformance for the model. We have been saying it’s going to be
difficult to keep outperforming the S&P 500 because Quant is currently
favoring those same US issues.
A good example is today’s new entry into the top 10, the 6th
place iShares Russell 1000 Fund (IWB). Wedged between its small cap and broad market
cousins in 5th and 7th place today, the 1000 represents
the large cap slice of the US market and not surprisingly, is tightly correlated
with the S&P 500. Having almost 1000
constituents makes it a little less exposed to any one company but Apple still
makes up more than 3% of AUM so it may stall a bit today. It floats up into the top 10 for the first time
since early November with nicely balanced scores in the mid to upper 60s which
we like to say is better than if those scores were on your kid’s report card. Except for its 95 Quality Score which would
make any parent proud. It may have been
early in November but the fund has outperformed the MSCI ACWI since it began to score
well again in late December. Within its
69.4 Behavioral Score are very nice Technical Scores led by its Short Term measure
of 85.2, this one is tube riding right now.
It doesn't look as sweet fundamentally but its appreciating valuation is
supported by a 98 yield score.
In our short history since last July, the ETFG models have proven
very adept at dropping in on the sweetest waves. It’s been a gnarly market since then and
Quant has found the sections you wanted to ride and for now that’s still the
good ole USA. So don’t be a kook getting
rag dolled by a choppy market. Check the
ETFG rankings each day and hang-loose with the swells.
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