All Cap Blend Style 2Q18: Best and Worst
David Trainer | May 23, 2018 09:18AM ET
The All Cap Blend style ranks second out of the twelve fund styles as detailed in our 1Q18 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 Blend style ETFs and mutual funds are created the same. The number of holdings varies widely (from 3 to 4639). This variation creates drastically different investment implications and, therefore, ratings.
Investors seeking exposure to the All 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[1] empowers our unique ETF and mutual fund rating methodology, which leverages our rigorous analysis of each fund’s holdings.[2] 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 & Worst Ratings – Top 5
* Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity.
Sources: New Constructs, LLC and company filings
Fourteen ETFs 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 & 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
Eight mutual funds are excluded from Figure 2 because their total net assets (TNA) are below $100 million and do not meet our liquidity minimums.
WisdomTree Dynamic Long/Short U.S. Equity Fund (NYSE:DYLS) is the top-rated All Cap Blend ETF and Fidelity Export & Multinational Fund (FEXKX) is the top-rated All Cap Blend mutual fund. Both earn a Very Attractive rating.
ProShares Ultra Telecommunications (NYSE:LTL) is the worst rated All Cap Blend ETF and Saratoga Advantage Large Capitalization Value Portfolio (SLVYX) is the worst rated All Cap Blend mutual fund. Both earn a Very Unattractive rating.
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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. Don’t just take our word for it, see what Barron’s says on this matter.
PERFORMANCE OF HOLDINGS = PERFORMANCE OF FUND
Figures 3 and 4 show the rating landscape of all All Cap Blend ETFs and mutual funds.
Figure 3: Separating the Best ETFs From the Worst Funds
Sources: New Constructs, LLC and company filings
Figure 4: Separating the Best Mutual Funds from the Worst Funds
Sources: New Constructs, LLC and company filings
Disclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, style, or theme.
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