Friday, July 26, 2013

It turned out the shift in yesterday’s elite ranks was not quite as remarkable as we remarked.  If you are among those wondering why the ranks we quoted here in Daily Perspectives were not reflected on our Quant page, let us explain.  After we posted, but before the market opened, we noticed some missing data in our calculations.  When we corrected the problem, 2 more US funds made the top 10 and 3 of the 6 we mentioned dropped about a dozen ranks and HAO landed in 20th from 12th (138th today).  The message is still remarkable however as the emerging markets and China continue to score and rank well.

As we drink our coffee and settle in at our desks, we see 2 China funds and 2 Emerging Markets funds in the top 10 and many more among the top 50.  So Quant may not be saying to avoid the US but if you are looking for international exposure it has plenty of Asian ideas for you.  Today’s top ranked China funds, 4th place FXI and FCHI in 10th lead the Green Diamond model where FXI is today’s 10 Green Diamond fund and FCHI is a close 2nd with 9.99.  Emerging Markets funds ADRE and DEM each get Reward Ratings above 9.5 and are ranked 5th and 9th in Quant.  All 4 saw yesterday’s action favor their technical scores but 3 saw a ding to their sentiment score.  Yesterday’s other message was that the group saw elevated implied volatility scores and that remains the case today.  We mentioned that being an excellent secondary screen which means we have found that among the top ranks, the names with the best IV scores tend to outperform the others.

Yesterday’s hiccup was a rare enough event that we trust the ranks will look the same by the time you read this.  The quoted funds’ scores didn’t change much; it was more a factor of other funds scoring better when we re-ran the data.  As we gather all the vibes of the international equity markets, Quant has an uncanny ability to sort through the noise and highlight the best equity ETFs for the intermediate term.  There are plenty of twists, turns and bumps along the way but the message of the models has provided a sweet song for our users.  Thanks for being among them and have a nice weekend.

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