Best And Worst Q1 2020: All Cap Growth ETFs And Mutual Funds
Summary
- The All Cap Growth style ranks tenth in Q1'20.
- Based on an aggregation of ratings of 26 ETFs and 564 mutual funds in the All Cap Growth.
- ADME is our top-rated All Cap Growth style ETF and NLAFX is our top-rated All Cap Growth style mutual fund.
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The All Cap Growth style ranks tenth out of the 12 fund styles as detailed in our Q1'20 Style Ratings for ETFs and Mutual Funds report. Last quarter, the All Cap Growth style ranked seventh. It gets our Unattractive rating, which is based on an aggregation of ratings of 26 ETFs and 564 mutual funds in the All Cap Growth. See a recap of our Q4'19 Style Ratings here.
Figures 1 and 2 show the five best and worst rated ETFs and mutual funds in the style. Not all All Cap Growth style ETFs and mutual funds are created the same. The number of holdings varies widely (from 17 to 2049). This variation creates drastically different investment implications and, therefore, ratings.
Investors seeking exposure to the All Cap Growth style should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2.
Our Robo-Analyst technology empowers our ETF and mutual fund rating methodology, which leverages our analysis of each fund’s holdings. We think advisors and investors focused on prudent investment decisions should include analysis of fund holdings in their research process for ETFs and mutual funds.
Figure 1: ETFs with the Best and Worst Ratings – Top 5
* Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity.Sources: New Constructs, LLC and company filings
Principal Price Setters Index ETF (PSET), Reality Shares DIVCON Leaders Dividend ETF (LEAD), and QRAFT AI-Enhanced US Large Cap ETF (QRFT) are excluded from Figure 1 because their total net assets are below $100 million and do not meet our liquidity minimums.
Figure 2: Mutual Funds with the Best and Worst Ratings – Top 5
* Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity.Sources: New Constructs, LLC and company filings
American Beacon Alpha Quant Quality Fund (AQQIX, AQQYX, AQQPX) and SGI Global Equity Fund (SGLIX) are excluded from Figure 2 because their total net assets are below $100 million and do not meet our liquidity minimums.
Aptus Drawdown Managed Equity ETF (ADME) is the top-rated All Cap Growth ETF and Nuveen Large Cap Growth Fund (NLAFX) is the top-rated All Cap Growth mutual fund. Both earn a Very Attractive rating.
First Trust US Equity Opportunities ETF (FPX) is the worst-rated All Cap Growth ETF and Sparrow Growth Fund (SGFFX) is the worst-rated All Cap Growth mutual fund. FPX earns an Unattractive rating and SGFFX earns a Very Unattractive rating.
The Danger Within
Buying a fund without analyzing its holdings is like buying a stock without analyzing its business and finances. Put another way, research on fund holdings is necessary due diligence because a fund’s performance is only as good as its holdings’ performance.
Performance of Holdings = Performance of Fund
Analyzing each holding within funds is no small task. Our Robo-Analyst technology enables us to perform this diligence with scale and provide the research needed to fulfill the fiduciary duty of care. More of the biggest names in the financial industry (see At BlackRock, Machines Are Rising Over Managers to Pick Stocks) are now embracing technology to leverage machines in the investment research process. Technology may be the only solution to the dual mandate for research: Cut costs and fulfill the fiduciary duty of care. Investors, clients, advisors and analysts deserve the latest in technology to get the diligence required to make prudent investment decisions.
Figures 3 and 4 show the rating landscape of all All Cap Growth ETFs and mutual funds.
Figure 3: Separating the Best ETFs from the Worst Funds
Sources: New Constructs, LLC and company filingsFigure 4: Separating the Best Mutual Funds from the Worst Funds
Sources: New Constructs, LLC and company filingsThis article originally published on Jan. 22, 2020.
Disclosure: David Trainer, Kyle Guske II, and Matt Shuler receive no compensation to write about any specific stock, style, or theme.
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