Best And Worst Q1 2020: Mid Cap Blend ETFs And Mutual Funds
Summary
- The Mid Cap Blend style ranks fifth in Q1'20.
- Based on an aggregation of ratings of 19 ETFs and 364 mutual funds in the Mid Cap Blend style.
- QVAL is our top-rated Mid Cap Blend style ETF and VEVRX is our top-rated Mid Cap Blend style mutual fund.
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The Mid Cap Blend style ranks fifth out of the 12 fund styles as detailed in our Q1'20 Style Ratings for ETFs and Mutual Funds report. Last quarter, the Mid Cap Blend style ranked sixth. It gets our Neutral rating, which is based on an aggregation of ratings of 19 ETFs and 364 mutual funds in the Mid Cap Blend style. 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 Mid Cap Blend style ETFs and mutual funds are created the same. The number of holdings varies widely (from 20 to 2580). This variation creates drastically different investment implications and, therefore, ratings.
Investors seeking exposure to the Mid Cap Blend 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
iShares Edge MSCI Multifactor USA Mid-Cap ETF (MIDF) and Invesco S&P MidCap Quality ETF (XMHQ) are excluded from Figure 1 because their total net assets (TNA) 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
Applied Finance Dividend Fund (AFVDX, AFADX) is excluded from Figure 2 because its total net assets are below $100 million and does not meet our liquidity minimums.
Alpha Architect US Quantitative Value ETF (QVAL) is the top-rated Mid Cap Blend ETF and Victory Sycamore Established Value Fund (VEVRX) is the top-rated Mid Cap Blend mutual fund. Both earn a Very Attractive rating.
Invesco Raymond James SB-1 Equity ETF (RYJ) is the worst rated Mid Cap Blend ETF and Quantified All-Cap Equity Fund (QACAX) is the worst rated Mid Cap Blend mutual fund. RYJ earns an Unattractive rating and QACAX 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 Mid Cap Blend 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. 24, 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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