As we begin
the week that ends July, international markets are bracing for economic data
and earnings in a difficult macro environment. Asian markets are adding to
declines from last week but 3 China funds remain in the upper ranks. GXC, FXI and FCHI rank 4, 2, and 12 in
Quant and 1, 2, 3 in the Green Diamond Reward model. China’s Shanghai Composite Index looks ugly
for the last couple of weeks but these ETFs sport nice charts leading the US
market over the period. The difference
is US dollar weakness.
The difference
between Quant and the Green Diamond Reward Ratings is the latter model is comprised
of Quant’s two dominant categories, Behavioral and Fundamental, while much of
the Global Theme and Quality calculations are incorporated in the Red Diamond
Risk Ratings. Behavioral is half of the
Reward Rating and evenly split between technical and sentiment. All three funds get decent high 60s technical
scores with short term leading intermediate and long. FXI has the highest sentiment score of the
three at 82.1 but GXC saw its jump from 42.1 on Friday to 72.6 today accounting
from heavy put buying. That was enough
to steal today’s 10 Green Diamond Rating away from FXI. There are no options available on FCHI so it
gets a default 50 put/call score but its short interest and implied volatility
are enough to get it a 71.1 sentiment score.
On the
Fundamental side, all 3 get high 90s price/cash flow scores where GXC and FCHI
are sharing the wealth with 100 yield scores, FXI’s 61.6 yield score means it
has had a higher yield about a third of its life. FXI does better on the PE score with 62.4
compared to 56.6 for GXC and 51.6 for FCHI. Price book scores are closer in the low to mid 60s for all 3. The group has above average Red Diamond Risk Ratings in the high
5s with differences resulting from quality metrics as well as
differences in country weights (Hong Kong scores higher than mainland China).
Leading the
ranks does not mean these 3 funds will be up today or tomorrow but that they are
likely to outperform most other funds over the next couple of months. GXC and FXI have ranked highly before and performed
very well so we have high hopes this time too.
Thanks for checking in to ETF Global® and good luck this week.
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