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 view (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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Below is a summary of the leading ETF's in each of the three time-frames that we use in our work:
The ETF Leader Boards
| Intermediate-Term (3 Months) ETF Rankings: | |||||
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The table below summarizes the top rated ETF's over the intermediate-term, which we define as 63 trading days. Note we only list those ETF's with sufficient liquidity. If an ETF does not trade enough volume to meet our criteria, we toss it aside. In addition, if there are multiple ETF types within the same category, we list only the top rated ETF. | |||||
Disclosure: At the time of publication, Mr. Moenning or related companies own positions in the following securities mentioned: None
| Short-Term (21 Days) ETF Rankings: | |||||
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The table below summarizes the top rated ETF's over the short-term, which we define as 21 trading days. Note we only list those ETF's with sufficient liquidity. If an ETF does not trade enough volume to meet our criteria, we toss it aside. In addition, if there are multiple ETF types within the same category, we list only the top rated ETF. | |||||
Disclosure: At the time of publication, Mr. Moenning or related companies own positions in the following securities mentioned: None
| Micro-Term (5 Days) ETF Rankings: | |||||
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The table below summarizes the top rated ETF's over the Micro-term, which we define as 5 trading days. Note we only list those ETF's with sufficient liquidity. If an ETF does not trade enough volume to meet our criteria, we toss it aside. In addition, if there are multiple ETF types within the same category, we list only the top rated ETF. | |||||
Disclosure: At the time of publication, Mr. Moenning or related companies own positions in the following securities mentioned: None
Do Ratings 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.
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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.
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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. |
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.
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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.
