Friday, June 21, 2013

Traders thought it was the last two days, but today is the year’s longest, happy summer solstice.  Recent volatility forces us to shine some sunlight on our portfolios to see what has held up best.   ETFs are accounting for a larger percentage of market volume and ETF Globalsm has identified the best ones through a few shifts over the past 12 months.  It was Europe last summer and emerging markets in the fall before our predictive models focused on US broad market funds since last December.  Those have been among the best on the way up as well as the correction over the last month and managers using our selections are outperforming their peers.  Our sector selections have been mostly limited to energy and technology and while the former have lagged somewhat, the technology names have mostly outperformed.  No other ETF has dominated our Green Diamond Reward model like the PowerShares Dynamic OTC Portfolio Fund (PWO) which is today’s 10 Green Diamond fund again.

With half of AUM in technology, this smart beta fund makes quarterly selections from the NASDAQ  and our June 12th post takes you through the various times we have highlighted it.  It got its first 10 Green Diamond rating on January 4th and has almost doubled the S&P 500’s return since then.  You would be hard pressed to find a time from any of its 51 days atop the Diamond model when it has not outperformed the market.  On many of those days, it dominated the model so much that there were no 9 Green Diamond funds, forcing us to shine some sunlight to make sure we were calculating correctly.  It dominates to a similar extent today as there are only a few 9s which you can see by sorting the ETFG Scanner output by Reward.  A typical distribution would see about a dozen 9s. 

If you have yet to consider a smart beta product, PWO is worth a look.  Check out the ETFG Tear Sheet for it or any exchange traded product and as you shine some sunlight on your equity ETFs, see how they score in Quant and our Green Diamond Reward models.  You won’t be disappointed with their proven selection processes. Please send questions you have on anything you see at ETFGsm to, we are here to help.   Have a nice weekend, we have all earned it this week.

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