Tuesday, March 26, 2013

A week ago we took a bird’s eye view of the sectors represented in the top 100 ranked equity ETFs, today we’ll look at the regions.  Quant continues to favor the broad US market with only 16 funds devoted to other regions making today’s top 100.  So let’s begin with our neighbors to the great white north.

The iShares MSCI Canada Index Fund (EWC) got into the top 10 for the first time this year on March 15th which happened to be the monthly selection day for our Dynamic indices.  It has managed to maintain 6th place today.  It’s the only non US fund in the ETFGQE10 but the Golden Dozen also has a couple of European funds this month. The SPDR DJ Euro STOXX 50 Fund (FEZ) and the iShares MSCI France Index Fund (EWQ) were both among the top 12 funds that met the Golden Dozen’s liquidity requirements on March 15th and rank at a respectable 22nd and 30th place today, we obviously have high hopes for them at least for the next month.  If you are tempted to pick up some exposure in Europe, Quant likes these and a few others.   Germany (EWG), Sweden (EWD), Switzerland (EWL) and Spain (EWP) see their iShares MSCI Index funds in 40th, 45th, 56th, and 57th place which aren’t great but do signal outperformance over the next few months.  If you want to keep it broad, the iShares MSCI EAFE Index Fund (EFA) is in 74th place but struggling to stay in the top 100 lately.  Moving to Asia, the iShares MSCI South Korea Index Fund (EWY) is at 18th place, its highest rank all year as Quant suggests its correction may be done.  The two China funds that performed so well for us last year are showing up again.  FXI and GXC have come down to their 200 day moving averages and up to 64th and 66th place.  It may not be Asia but it is Pacific and the iShares MSCI Australia Index Fund (EWA) ranks at 30th today, off from its recent higher ranks.  Some Asia-Pacific funds make the list that are notable for excluding one of Asia’s hottest stock markets. The iShares MSCI All Country Asia ex Japan Index Fund (AAXJ) barely makes the cut at 99th place but their Pacific Ex-Japan Index Fund (EPP) does better at 45th.  Emerging markets funds have not been scoring well this year but two make today’s top 100. The SPDR S&P Emerging Asia Pacific (GMF) is at 79th place but the iShares MSCI Emerging Index Fund (EEM) which did so well for us last fall ranks better at 61st.

So if you must invest outside of the US there are some ideas but Quant is still clearly saying the broad US market is poised to continue its outperformance.  It has been the right call all year but will bring our performance versus the S&P 500 down again when we compile our monthly performance reports next week.  With all three funds tracking that index in the top 25 and similarly broad US funds also ranking highly, we are just happy to be steering you to the best performers in the world of ETFs. 

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