Best And Worst Q3 2020: Technology ETFs And Mutual Funds – Digitalmunition




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Published on August 14th, 2020 📆 | 6326 Views ⚑

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Best And Worst Q3 2020: Technology ETFs And Mutual Funds

The Technology sector ranks eighth out of the 11 sectors as detailed in our Q3’20 Sector Ratings for ETFs and Mutual Funds report. Last quarter, the Technology sector ranked eighth. It gets our Neutral rating, which is based on an aggregation of ratings of the 453 stocks in the Technology sector. See a recap of our Q2’20 Sector Ratings here.

Figures 1 and 2 show the five best and worst rated ETFs and mutual funds in the sector. Not all Technology sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 21 to 383). This variation creates drastically different investment implications and, therefore, ratings.

Investors seeking exposure to the Technology sector should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2.

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

Five ETFs (IDRV, DRIV, TDV, FITE, TTTN) 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

* Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings

Five mutual funds (FDMIX, FDMCX, HTCIX, HTECX, STPIX) are excluded from Figure 2 because their total net assets are below $100 million and do not meet our liquidity minimums.

TDIV is the top-rated Technology ETF and FSDCX is the top-rated Technology mutual fund. Both earn an Attractive rating.

WCLD is the worst rated Technology ETF and RSIFX is the worst Technology mutual fund. They both earn a Very Unattractive rating.

453 stocks of the 2,850-plus we cover are classified as technology stocks.

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. 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 Technology ETFs and mutual funds.

Figure 3: Separating the Best ETFs From the Worst ETFs

Sources: New Constructs, LLC and company filings

Figure 4: Separating the Best Mutual Funds from the Worst Mutual Funds

Sources: New Constructs, LLC and company filings

This article originally published on July 14, 2020.

Disclosure: David Trainer, Kyle Guske II, and Matt Shuler receive no compensation to write about any specific stock, sector or theme.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.


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