Greetings!
Below please find the ETF Spotlight newsletter containing highlights of the research and data on www.etfresearchcenter.com as well as a recap of the past week's action in the ETF market. There will be no Spotlight next week due to the July 4th holiday.
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In this week's issue
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 Sector skew from equal weighting
- Chart of the week: Sector Exposure of ALPS Equal Sector Weight (EQL) vs. S&P500 (SPY)
- Fund Focus: ALPS Equal Sector Weight ETF (EQL)
- Revisions, asset flows & short interest
- 2012 EPS estimates, annual change, and P/E multiples for major ETFs
- Market monitor - movers & categories
To download the full newsletter click here.
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| Chart of the week |
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Sector skew from equal weighting
We recently initiated coverage of our first fund of funds, the ALPS Equal Sector Weight ETF (EQL), which holds each of the nine Select Sector SPDR Funds in equal amounts, rebalanced annually. The basic logic of this strategy is that S&P sector leadership changes over the years, so it is unwise to allocate the biggest portion of one's portfolio to whichever sector is largest at the moment, since it is virtually guaranteed to underperform over the long term.
In any case, obviously this results in deviations from the current sector allocation in the S&P500 (SPY). Currently four sectors differ to a significant degree: the small Utilities (XLU) and Materials (XLB) sectors get their allocations boosted by 8% and 7%, respectively, while the giant Tech (XLK) and Financials (XLF) sectors see their allocations diminished by 8% and 5%, respectively.
Download the full newsletter here. Chart: Sector Exposure of ALPS Equal Sector Weight (EQL) vs. S&P500 SPDR (SPY)
Source: AltaVista Research |
| Fund Focus |
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ALPS Equal Sector Weight ETF (EQL)
EQL is ideal for "set-it-and-forget-it" investors aiming to outperform the S&P500 over the long run by systematically avoiding the excesses of the cap-weighted benchmark (such as the recent crisis in Financials, and the Tech bubble before that). The fact that EQL currently has an ALTAR Score on par with that of the S&P500 implies little opportunity cost for investors looking to switch to EQL.
To download the full newsletter, click here.
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| New coverage | |
We recently added coverage of the following ETFs, bringing the total to 677 funds. Check ETF Research Center for details on any of them.
| LGEM | EGShares Basic Materials GEMS | | GGEM | EGShares Consumer Goods GEMS | | VGEM | EGShares Consumer Services | | HGEM | EGShares Health Care GEMS | | IGEM | EGShares Industrials GEMS | | QGEM | EGShares Technology GEMS | | TGEM | EGShares Telecom GEMS | | UGEM | EGShares Utilities GEMS |
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