Friday, June 28, 2013

With Ride of the Valkyries blaring from loudspeakers, Bill Dudley flew the Fed’s helicopter to its lower Manhattan fortress with the message that investors don’t get it, easy money is here for a long time so get on your surfboards, it’s risk on!  As you paddle out to pick your wave, ETF Globalsm is here with analytics and selections which have been keeping you on the sweetest rides for the last year.  We covered the countries in Quant’s top 100 ranked funds yesterday and will look at the sectors today.

8 energy funds appear on the list with three (OIH, XOP, XLE) in the top 10 giving the sector the highest average Quant Score of 69.9.  Their average Red Diamond Risk Rating comes in barely below 4 but those three are all above that level.  Technology gets 6 funds on the list with IYW and VGT both in the top 10.  The sector scores slightly lower on average Quant Score but with a higher average Green Diamond Reward Rating and a 3.5 average Risk Rating.  Industrials get the next highest average Quant Score within the top 100 at 68.7 and an even lower average Risk Rating of 3.35.  The sector’s highest ranked fund is PSCI in 12th place.  When we did this exercise last month, basic materials was Quant’s favorite sector driven by the gold mining funds, proving even an algorithm as good as ours is going to take some occasional incoming fire.  4 of them are among the sector’s 8 funds on today’s list led by GDX in 16th place.  The average Quant Score of the 8 is 67.3 with a high average Risk Rating of 6.48. 

Health care has been a strong sector this year but has not been among Quant’s favorites even though 6 ETFs make today’s top 100. Three of them are biotech funds, 22nd place PBE, 25th place IBB, and FBT tied at 99th.  Only 2 financial funds appear today, XLF in 26th place and IYF in 83rd.  The consumer sectors have also done well without catching Quant’s affection but 1 of each appear on our list, Vanguard’s Consumer Staples Sector Fund (VDC) tied at 99th place and the cyclical EGShares Emerging Markets Consumer Fund (ECON) in 33rd place.  There is one utilities fund, UGEM in 61st place, but no telecomm funds in today’s top 100.

Today is the last day of our first year and our monthly performance updates will show it to be a propitious one.  ETF Globalsm has brought you quantitative models that have heretofore been the exclusive province of billion dollar hedge funds and we thank you for placing your trust with us.  Please send any questions to and have a nice weekend.

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