Monday, July 22, 2013

Large US names are back up top and we are not referring to Phil Mickelson.  Atop today’s Quant leader board is the SPDR S&P Metals and Mining Fund (XME) followed by SPDR’s S&P Oil & Gas Exploration & Production Fund (XOP).  iShares has two US sector funds in the top 10 with their Dow Jones US Technology and Telecommunications Funds (IYW and IYZ) in 5th and 7th place.

The SPDR funds get 1st and 2nd place for different reasons with XME driven by a solid 75.9 Fundamental Score and XOP getting there on a 73.3 technical score and stronger, though lesser weighted, Global Theme and Quality Scores.  XOP has been a market leader since the spring and XME has been doing better since the beginning of the month after breaking back into the top 10 in early June.  The iShares funds are also more disparate than their close ranks suggest.  The tech names in IYW have a very strong 82.5 Fundamental Score which may come down when some recent earnings declines hit the data stream but they are still cheap on a historical basis.  The fund’s technicals have come down with poor price action last week but that has brought out the bears to boost its sentiment score with the two combining for a middling 57.7 Behavioral Score.  The telecoms in IYZ have seen their technical scores jump on the AT&T acquisition of Leap Wireless sending money flowing to the sector in hopes of similar deals.  It seems a realistic premise as the fund carries a solid 76.3 Fundamental Score and a Behavioral Score better than IYW at 61.2.

The four US large cap funds have brought the average Red Diamond Risk Rating of the top 10 down to 4.66, a little above today’s all equity ETF average of 4.49.  The SPDR funds have higher Risk Ratings with XME and its industrial metal constituents at 5.33 and XOP in line with the average at 4.48. The tech and telcom funds carry lower risk with IYW at 3.62 and IYZ at 3.32 Red Diamonds.  The big dogs have not completely displaced some of the newer names we have seen scoring well as the upper ranks still show a wide variety to choose from.  Congratulations to Phil Mickelson on winning the British open, the Brits don’t mind as they are focused on Duchess Kate.  Good luck to her today and good luck to you this week.

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