ETF Leaders, Research

ETF Leaders Report: 9/24/15

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The advent and popularity of ETF’s (Exchange Traded Funds) creates almost limitless opportunities for individual investors. No longer do you need to be a high powered hedge fund manager in order to have access to countries in the emerging markets, commodities, currencies, or – just about anything you can think of. No, today anyone can own country indices such as China, Brazil, or India and commodities such as gold, copper, steel, and coal, just to name a few. Looking for global agriculture? There’s an ETF for that (Market Vectors Agribusiness – MOO). Do you like the semiconductors? There are a handful of ETF’s available (both leveraged and non-leveraged). Want to hedge your bets with a trade in the VIX index? Yep, there’s an ETF (actually, there are several) for that.

But with more than 800 ETF’s available to investors these days, the decision of what to own can quickly become overwhelming. To help with this question, we have developed The ETF Leaders Report, which we run once a week.

Below is a summary of the leading ETF’s over three different time-frames: Intermediate-Term (3 months), Short-Term (2-4 weeks), and what we call the Micro-Term (5 days). However, it is important to understand that we do not rank the ETF’s simply by rate of change over the period selected. First, we incorporate both trend and breadth indicators to rate the ETF’s and then analyze performance over the period selected.

Combining different time-frames is an institutional/professional trading strategy that will help you (1) stay focused on the big trends that occur each year, while at the same time, (2) avoiding the “what worked best last week” approach that so many individual investors like to use that is fraught with risk.


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The ETF Leaders Report
ETF Ranks For: September 24, 2015

The tables below summarize the top rated ETF’s over the intermediate-term, short-term, and micro-term, which we define as 63 trading days, 21 trading days, and 5 trading days, respectively. Please note that we only list those ETF’s with sufficient liquidity. If an ETF does not trade enough volume to meet our criteria, we do not list it. In addition, if there are multiple ETF types within the same category (tracking the same index, for example) we will only list the highest rated ETF of that category.

Intermediate-Term (3 Months) ETF Rankings

Short-Term (21 Days) ETF Rankings

Micro-Term (5 Days) ETF Rankings

Disclosure: At the time of publication, Mr. Moenning or related companies own positions in the following securities mentioned: EDV

Do Ratings Really Matter?

We may be biased, but we certainly think so. Below is a summary of a test run by one of the largest institutional research firms in the country. The test assumes investors would hold the top 20% of ETF’s and then rebalance on a monthly basis.

ETF Leader Ranks
System Test Results 1996 – 2006
Top 20% ETF Universe – Rebalanced Monthly

Year
Top 20%
ETF System

S&P 500
1996 +22.00% +20.30%
1997 +29.80% +31.01%
1998 +29.20% +26.67%
1999 +117.30% +19.53%
2000 +26.00% -10.14%
2001 +2.70% -13.04%
2002 -15.50% -23.37%
2003 +51.90% +26.38%
2004 +13.80% +8.99%
2005 +16.70% +3.00%
2006 +13.92% +13.62%
Cumulative Return +1,017.19% +130.34%

The above return calculations are based on system testing. It should be noted that although the System Test was performed by an independent company, test results do not represent actual trading, do not take into account payment of commissions nor reinvestment of dividends, have inherent limitations, and are for informational purposes only. Past performance is not a guarantee of future results.


The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of ‘State of the Markets’ and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

The information contained in our websites and ‘State of the Markets’ publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.

Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.

© 2015 StateoftheMarkets.com – StateoftheMarkets.com does not provide investment advice. All rights reserved.

About the Author

Donald B. Moenning is the head of equity research at Heritage Capital Management, a Chicago-based investment management firm founded in 1989, as well as StateoftheMarkets.com. Don holds degrees in Economics and Business Leadership from the University of Puget Sound, lives in Denver, Colorado, and is an avid snowboarder.