Sector Rankings For ETFs And Mutual Funds

Oct. 23, 2012 7:55 AM ETJNJ, SPG, XLV2 Comments
David Trainer profile picture
David Trainer

Each quarter, we provide the most comprehensive review of equity ETFs and mutual funds available. We review the Best & Worst ETFs and Mutual Funds by sector and style. We also identify the overall best sectors and investment styles for ETFs and for mutual funds. We begin the 4Q12 series with our Sector Rankings report. Over the next two weeks, we will publish 20+ reports on each sector and style. We will also publish a Style Rankings report and a review of how well investors allocate assets to the best ETFs & funds.

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.

Investors looking for quality sector funds that hold quality stocks should look no further than the Consumer Staples sector. None of the other sectors earn an Attractive-or-better rating. Figures 6 and 7 provide details. The primary driver behind an Attractive fund rating is good portfolio management, or good stock picking, with low total annual costs

Note that the Attractive-or-better Predictive ratings do not always correlate with Attractive-or-better total annual costs. This fact underscores that (1) low fees can dupe investors and (2) investors should invest only in funds with good stocks and low fees.

See Figures 4 through 13 for a detailed breakdown of ratings distributions by sector. See my free ETF & mutual fund screener for free rankings and ratings on 7000+ mutual funds and 400+ ETFs. My fund rating methodology is detailed here.

All of my reports on the best & worst ETFs and mutual funds in every sector and investment style are available here.

Figure 1: Ratings For All Sectors

Source: New Constructs, LLC and company filings

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We aim to help investor make more intelligent capital allocation decisions. Our research is driven by proven-superior fundamental data, models and equity/credit ratings.

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