Tuesday, July 9, 2013

Regular readers are familiar with Quant’s fondness for energy this year as today’s 1st place SPDR S&P Oil & Gas Exploration & Production Fund (XOP) has spent almost all of 2013 in the top 10.  It has lagged the S&P 500 but has turned in solid performance.  Two other energy related funds have emerged into the upper ranks and they may even appeal to those who choke on the carbon producing kinds.

News report yesterday said nuclear power companies have applied for permits to Japan’s new regulatory agency as the country is ready to re-embrace the energy source that has powered its economy for decades.  Quant noticed the iShares S&P Global Nuclear Energy Index Fund (NUCL) paid its largest dividend on July 2nd boosting its yield score up to 100.  Its other fundamental scores are not great averaging in the mid 50s, but its sentiment and technical scores come in a little better in the mid 60s.  It is all good enough to generate a Total Score of 68 and 12th place with an 8.72 Reward Rating and 5.71 Risk Rating.

Con Edison recently replaced our electric meter with a digital one from Itron which apparently makes it easier for them to generate brownouts on very hot days.  We notice Itron Inc. is the 9th weighted position in today’s 3rd place First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID), a smart beta product that adjusts its portfolio quarterly.  This global infrastructure fund reached the double digit ranks for the first time after also paying its largest dividend on June 28th.  If you want to get your hands on some of that stimulus money, this may be your way as it sports a 97.5 price/cash flow score.  Other fundamental scores are in the 50s with better scores in other categories to generate a total score of 70 and a Reward/Risk spread of 9.42/5.56.  We hope Con Ed spends more money at other companies in the fund, NYC needs a smarter grid.

Bloodshed in the Middle East usually boosts oil prices and it is splashed across our front pages this morning.  Higher oil prices make innovation and alternatives more attractive and both of these global funds should benefit from such a trend as much as XOP.  We try to bring you timely ideas here at ETFG Daily Perspectives and Quant has provided some this morning.  Thanks for checking in.  

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