The large-cap value style ranks fifth out of the twelve fund styles as detailed in my style roadmap. It gets my Neutral rating, which is based on aggregation of ratings of 39 ETFs and 782 mutual funds in the large-cap value style as of April 24, 2012,
The all-cap growth style ranks fourth out of the twelve fund styles as detailed in my style roadmap. It gets my Neutral rating, which is based on aggregation of ratings of 2 ETFs and 457 mutual funds in the all-cap growth style as of April 24, 2012.
The all-cap blend style ranks third out of the twelve fund styles as detailed in my style roadmap. It gets my Neutral rating, which is based on aggregation of ratings
The large-cap growth style ranks second out of the twelve fund styles as detailed in my style roadmap. It gets my Neutral rating, which is based on aggregation of ratings
The large-cap blend style ranks first out of the twelve fund styles as detailed in my style roadmap. It gets my Neutral rating, which is based on aggregation of ratings of 40 ETFs and 1193 mutual funds in the large-cap blend style as of April 24, 2012.
None of the fund styles earn a rating better than Neutral. The primary driver behind the Neutral-or-worse ratings is poor portfolio management. My style ratings are based on the aggregation
The Financials sector ranks last out of the ten sectors as detailed in my sector roadmap. It is the only sector to earn my Very Dangerous rating, which is based on aggregation of ratings of 48 ETFs and 224 mutual funds in the Financials sector as of April 18, 2012.
The Telecom Services sector ranks ninth out of the ten sectors as detailed in my sector roadmap. It gets my Dangerous rating, which is based on aggregation of ratings of 5 ETFs and 12 mutual funds in the Telecom sector as of April 17, 2012
The Energy sector ranks seventh out of the ten sectors as detailed in my sector roadmap. It gets my Neutral rating, which is based on aggregation of ratings of 20 ETFs and 89 mutual funds in the Energy sector as of April 17, 2012.
The Materials sector ranks sixth out of the ten sectors as detailed in my sector roadmap. It gets my Neutral rating, which is based on aggregation of ratings of 11 ETFs and 11 mutual funds in the Materials sector as of April 16, 2012.
The Consumer Discretionary sector ranks 5th out of the ten sectors as detailed in my sector roadmap. It gets my Neutral rating, which is based on aggregation of ratings of 18 ETFs and 27 mutual funds in the Consumer Discretionary sector as of April 16, 2012.
The Industrials sector ranks fourth out of the ten sectors as detailed in my sector roadmap. It gets my Neutral rating, which is based on aggregation of ratings of 16 ETFs and 18 mutual funds in the Industrials sector as of April 16, 2012.
The Information Technology sector ranks 3rd out of the ten sectors as detailed in my sector roadmap. It gets my Neutral rating, which is based on aggregation of ratings of 28 ETFs and 151 mutual funds in the Information Technology sector as of April 16th, 2012.
The Health Care sector ranks 2nd out of the ten sectors as detailed in my sector roadmap. It gets my Neutral rating, which is based on aggregation of ratings of 22 ETFs and 86 mutual funds in the Health Care sector as of April 13, 2012.
The Consumer Staples sector ranks first out of the ten sectors as detailed in my sector roadmap. It gets my Attractive rating, which is based on the aggregation of my ratings for 10 Consumer Staples ETFs and 9 Consumer Staples mutual funds as of April 12, 2012. Reports on the best & worst ETFs and mutual funds in every sector and style are on my blog and MarketWatch’s Trading Deck.
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. There are lots of cheap funds, but there are too few funds with high-quality holdings.
Only one sector, Consumer Staples, earns my Attractive rating. See Figure 1 for my ranking of all ten sectors. My sector ratings are based on the aggregation of my fund ratings for every ETF and mutual fund in each each sector.
MSFT gets my best rating because the company’s ROIC, at 72%, ranks 8th in the S&P 500 while its stock price (~$31.52/share) implies the company’s profits will permanently decline by about 20%. High profitability and low valuation create excellent risk/reward in a stock. Here is my free report on MSFT.
From the start, avoid any ETFs below a $100 million market cap. Anything smaller puts you at risk of inadequate liquidity, too large a bid/ask spread and tracking error. Even $100 million can be too low. The bigger the market cap the less trading risk. There are plenty of free services that allow you to screen out the smaller ETFs and minimize your trading risk.
The focus of this article, however, is investing risk or the relative investment potential of the ETF.