Tuesday, August 13, 2013

GXC Skews the Curve

On April 12th we noticed a potential problem in our Green Diamond model as there were no 9 Diamond funds that day and the issue repeated the next day.  When it happened again in May, we knew it was not a problem but a case where the 10 Green Diamond fund dominated the model to such an extent that its next closest ranker could not get above 8 Green Diamonds.  The PowerShares Dynamic OTC Portfolio Fund (PWO) went onto to skew the model in such a way 13 times.  If you bought on any of those days you are happy now being up more than 14% since April 12th versus the S&P’s 6%.  Sorting today’s ETFGsm Scanner output by Reward, you will see the issue has repeated again.

This time it is with the SPDR S&P China Fund (GXC) earning the 10 Green Diamond distinction for the 10th time since July 12th.  When we highlighted it on August 8th we said it looks like it is just getting started and Quant says you still have a chance to get on board. Its 98 Fundamental Score is the best out of all 724 equity ETFs getting scored today with all 4 subcategories getting high 90s.  158 other funds score better than its strong 73 technical score but all of those have sentiment more bullish than GXC.  At 73.9, only 11 other funds have better sentiment readings but they tend to have technical readings in the 40s and 50s.  It is a nice opportunity when both Behavioral subcategories score so well.  Those are the scores that account for the Green Diamond Reward Rating and no other fund comes close today.

GXC’s 5.67 Red Diamond Risk Rating is higher than average driven by an 8.11 Deviation score which is well explained with a look at its chart.   After a great run last fall, it dropped out of the top 100 and began a 20% correction a few weeks later but looks ready to do it again.  We hope it performs as well this time or as well as PWO which has dropped out of the top 100 on poor sentiment. PWO’s portfolio has also changed so if you still own it consider swapping into GXC or a better scoring smart beta fund.  Only ETF Global® brings you such actionable opportunities and we thank you for checking in to see them each day. 

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