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Diligence Institute

Highlights From New Constructs Investment Research

All Cap Blend Style

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The All Cap Blend style ranks third out of the twelve fund styles as detailed in my Style Rankings for ETFs and Mutual Funds report.

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Deferred Tax Assets and Liabilities – Invested Capital Adjustment

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DTAs artificially raise reported assets and do not help generate operating profit while DTLs are like a source of interest-free financing. We remove the impact of DTAs and DTLs from our calculation of invested capital to ensure the more accurate measure of a firm’s return on invested capital (ROIC).

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Investment Style Rankings For ETFs & Mutual Funds

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None of the fund styles earn a rating better than Neutral. My style ratings are based on the aggregation of my fund ratings for every ETF and mutual fund in each style.

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How To Find the Best Sector ETFs

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Finding the best ETFs is an increasingly difficult task in a world where a new ETF seems to be born every 10 seconds.

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How To Find the Best ETFs

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This article explains how I determine the best ETFs in the 25 reports I publish each quarter on the Best & Worst ETFs and Mutual Funds Series by Sector and Style. Here is my 4Q Best & Worst preview. I follow these steps:

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Rating Breakdown: Best & Worst ETFs & Mutual Funds by Sector

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This report focuses on my top picks and pans for all sector funds. I will follow this summary with a detailed report on each sector.

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Sector Rankings For ETFs & Mutual Funds

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At the outset of the fourth quarter of 2012, only a single sector earns an attractive rating. My sector ratings are based on the aggregation of my fund ratings for every ETF and mutual fund in each sector.

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Best & Worst Style ETFs & Mutual Funds

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The best ETFs and mutual funds have high-quality holdings and low costs. As detailed in “A cheap fund is not always a good fund”, there are few funds that have both good holdings and low costs. While there are lots of cheap funds, there are very few with high-quality holdings.

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Best and Worst Funds: Health Care Sector

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The Health Care sector ranks third out of the ten major sectors as detailed in our sector roadmap. It gets my Neutral rating.

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Large-Cap Value Has 36 Aliases in ETF World

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There are 36 “large cap value” ETFs. Per Figure 1, these 36 ETFs have drastically different stock holdings and, therefore, allocations. The lowest number of holdings is 30 while the highest is 1178.
How do investors pick the ETF that will deliver the best performance?

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