We begin the week with an eclectic mix in Quant’s top 10 ranked funds. US broad market funds are joined by high and low risk foreign funds as well as three energy funds. You can see all the equity ETFs ranked each day on the ETFGsm Quant page but today we will look at the three energy funds. Readers are familiar with today’s 5th place SPDR S&P Oil & Gas Exploration & Production Fund (XOP) as it has spent most of 2013 in the top 10 even as it recovers from a 10% correction last month. Not as familiar to this space is the iShares Dow Jones U.S. Oil & Gas Exploration & Production Index Fund (IEO) which has spent most of the year in the top 100 with a handful of days in the top 10 where it has not matched today’s 3rd place since January 30th. Rounding out the group is the SPDR Energy Select Sector Fund (XLE) in 9th place today near where it has spent much of 2013.
Comparing all three in the ETFGsm Scanner, we see they all trade at discounts to the market which makes sense considering they have lagged the market this year. Clicking the Quant Report button shows that has not helped their Fundamental Scores too much because they usually trade at discounts. All three also have middling low 60s technical scores reflective of that performance. They get into the top 10 today on higher sentiment scores as the market expects them to continue to lag. Those bears are feeling some hurt over the last month with all three ahead of the market since their mid April corrections. If you think those corrections are over, you might prefer the more narrow E&P funds with higher risk ratings driven by high volatility and deviation scores. If you are looking to reduce risk but still have exposure to Quant’s favorite sector today then the broader XLE is a better choice with its lower overall 3.78 Red Diamond Risk Rating.
If energy does not fit your allocation needs, the Quant page will provide many other ideas in sectors and regions across a wide range of Risk Ratings, or you can sort the Scanner output by high Reward Ratings. Like it has all year, the overriding message of both models continues to favor US broad market funds; we have been waiting for a shift but cannot call it yet. If you have any questions about anything you see at ETF Globalsm, please let us know at firstname.lastname@example.org, we are here to help.