Thursday, September 19, 2013

Diamonds in Bernanke’s Head

The ETF Global® algorithms calculate dozens of daily metrics on the world of exchange traded products but the inner deliberations of Ben Bernanke’s mind are not among them.  However, quantitative analysis has an ability to pick up unavailable information and somehow the models knew that Ben was going to let the good times roll.  Financial assets rallied on the surprise absence of any taper and the emerging markets funds that have been scoring so well blew the doors off the US market.  The SPDR S&P China Fund (GXC) has dominated the Green Diamond Reward model lately like no other getting the 10 Diamond distinction for the 30th time since July 12th.  It gained almost 2% yesterday and is up almost 18% since then while the S&P gained about 2.7%.  The other high scoring emerging markets funds performed even better yesterday padding our performance numbers since beginning to score well in the early summer.

Our latest performance report on the Green Diamond Reward model is available under the Analytics button where it appears with all prior months.  Like Quant, the Green Diamond model has begun to provide positive separation from the S&P 500 since being so weighted towards that benchmark for most of 2013.  Each day, one equity ETF gets the 10 Green Diamond Reward Rating with the rest scaled from 1 to 10 according to their Behavioral and Fundamental Scores.  On the report we segregate the 7s, 8s, 9s and 10s, calculate their performance over 1, 2 and 3 months and compare to the S&P 500 over the same time.  September’s report shows the 8s beating the 9s and 10s for most time frames and we should note there were no 9s for many of those days that GXC dominated so much, like today.  Like the other emerging markets funds that have been getting a lot of 8s lately, it was negative for some of those periods that ended in August but is off to the races in September.

If you want to learn more about the ETF Global® models, please come to our forum tomorrow at the New York Society for Security Analysts,  mentioned Monday.  You can sign up at  If you are not in the area, always feel free to send any questions to, we are here to help.  Thanks for reading ETF Global® Daily Perspectives, we hope to see you at the forum tomorrow. 

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