Tag Archives: blend

Best And Worst Q1’16: Mid Cap Blend ETFs, Mutual Funds And Key Holdings

The Mid Cap Blend style ranks sixth out of the twelve fund styles as detailed in our Q1’16 Style Ratings for ETFs and Mutual Funds report. Last quarter , the Mid Cap Blend style ranked eighth. It gets our Neutral rating, which is based on aggregation of ratings of 18 ETFs and 319 mutual funds in the Mid Cap Blend style. See a recap of our Q4’15 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 19 to 3336). 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. Figure 1: ETFs with the Best & Worst Ratings – Top 5 Click to enlarge * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings Four ETFs 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 & Worst Ratings – Top 5 Click to enlarge * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings Five mutual funds are excluded from Figure 2 because their total net assets are below $100 million and do not meet our liquidity minimums. The PowerShares S&P MidCap Low Volatility Portfolio (NYSEARCA: XMLV ) is the top-rated Mid Cap Blend ETF and the ClearBridge Mid Cap Fund (MUTF: LSIRX ) is the top-rated Mid Cap Blend mutual fund. XMLV earns an Attractive rating and LSIRX earns a Very Attractive rating. The Guggenheim Raymond James SB-1 Equity ETF (NYSEARCA: RYJ ) is the worst-rated Mid Cap Blend ETF and the RBC Mid Cap Value Fund (MUTF: RBMAX ) is the worst-rated Mid Cap Blend mutual fund. RYJ earns a Neutral rating and RBMAX earns a Very Dangerous rating. Amdocs (NASDAQ: DOX ) remains one of our favorite stocks held by LSIRX and earns a Very Attractive rating. Since 1998, Amdocs has grown after-tax profit ( NOPAT ) by 16% compounded annually. The company has earned a double-digit return on invested capital ( ROIC ) every year for the past decade and currently earns a 12% ROIC. The impressive profit growth achieved by Amdocs has not gone unnoticed, as the stock is up 90% over the past five years. However, shares remain undervalued. At its current price of $55/share, Amdocs has a price-to-economic-book value ( PEBV ) ratio of 1.0. This ratio means the market expects Amdoc’s NOPAT to never meaningfully grow from current levels. If Amdocs can grow NOPAT by just 6% compounded annually for the next decade , the stock is worth $72/share today – a 29% upside. Zayo Group (NYSE: ZAYO ) is one of our least favorite stocks held by Mid Cap Blend ETFs and mutual funds. Zayo earns a Dangerous rating. Since Zayo’s IPO, the company’s economic earnings have not only remained negative, but also declined from -$137 million in 2013 to -$165 million over the last twelve months. Over this same time, Zayo’s ROIC has consistently ranked in the bottom quintile and is currently a bottom quintile 4%. Despite the deterioration of the business, ZAYO remains overvalued. To justify its current price of $24/share, Zayo must grow NOPAT by 13% compounded annually for the next 13 years . The expectations embedded in the stock price provide no room for error and only large downside risk. 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 Click to enlarge Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Funds Click to enlarge Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, style, or theme. 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.

Best And Worst Q4’15: Small Cap Blend ETFs, Mutual Funds And Key Holdings

Summary The Small Cap Blend style ranks last in Q4’15. Based on an aggregation of ratings of 28 ETFs and 642 mutual funds. VB is our top-rated Small Cap Blend style ETF and PCOEX is our top-rated Small Cap Blend style mutual fund. The Small Cap Blend style ranks twelfth out of the twelve fund styles as detailed in our Q4’15 Style Ratings for ETFs and Mutual Funds report. Last quarter , the Small Cap Blend style ranked last as well. It gets our Dangerous rating, which is based on an aggregation of ratings of 28 ETFs and 642 mutual funds in the Small Cap Blend style. See a recap of our Q3’15 Style Ratings here. Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the style. Not all Small Cap Blend style ETFs and mutual funds are created the same. The number of holdings varies widely (from 23 to 2053). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the Small Cap Blend style should buy one of the Attractive-or-better rated mutual funds from Figures 2. Figure 1: ETFs with the Best & Worst Ratings – Top 5 (click to enlarge) * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings 5 ETFs 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 & Worst Ratings – Top 5 (click to enlarge) * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings The Boston Trust & Walden Funds Mid Cap Fund (MUTF: WAMFX ) and the Boston Trust & Walden Funds SMID Cap Innovations Fund (MUTF: WASMX ) are excluded from Figure 2 because their total net assets are below $100 million and do not meet our liquidity minimums. The Vanguard Small-Cap ETF (NYSEARCA: VB ) is the top-rated Small Cap Blend ETF and the Putnam Capital Opportunities Fund (MUTF: PCOEX ) is the top-rated Small Cap Blend mutual fund. VB earns a Neutral rating and PCOEX earns a Very Attractive rating. The State Street SPDR Russell 2000 Low Volatility ETF (NYSEARCA: SMLV ) is the worst-rated Small Cap Blend ETF and the ProFunds Small Cap Fund (MUTF: SLPSX ) is the worst-rated Small Cap Blend mutual fund. SMLV earns a Dangerous rating and SLPSX earns a Very Dangerous Rating. The Goodyear Tire & Rubber Company (NASDAQ: GT ) is one of our favorite stocks held by VB and earns our Very Attractive rating. Since 2010, the company has grown after-tax profits (NOPAT) by 18% compounded annually and doubled its NOPAT margin. Goodyear has also improved its return on invested capital ( ROIC ) from 5% to 9% over the same timeframe. Despite the impressive profit growth, GT remains undervalued. At its current price of $35/share, GT has a price to economic book value ( PEBV ) ratio of 1.0. This ratio means that the market expects Goodyear to never meaningfully grow NOPAT over the remaining life of the corporation. If Goodyear can grow NOPAT by 7% compounded annually for the next five years , which is well below the historic growth rate, the company is worth $49/share today – a 40% upside. Ruby Tuesday (NYSE: RT ) is one of our least favorite stocks held by Small Cap Blend ETFs and mutual funds and earns our Dangerous rating. Since 2010, Ruby Tuesday’s NOPAT has declined by 11% compounded annually while its NOPAT margins have fallen from 9% in 2010 to 3% on a trailing-twelve-month basis. Ruby Tuesday’s ROIC has followed this downward trend and is currently a bottom quintile 3%, down from 6% in 2011. To justify the current price of $5/share, Ruby Tuesday must grow NOPAT by 5% compounded annually for the next 12 years . This expectation is awfully optimistic for a business that has failed to grow profits at all over the past five years. Figures 3 and 4 show the rating landscape of all Small Cap Blend ETFs and mutual funds. Figure 3: Separating the Best ETFs From the Worst ETFs (click to enlarge) Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Funds (click to enlarge) Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Thaxston McKee receive no compensation to write about any specific stock, style, or theme.

Best And Worst Q4’15: Mid Cap Blend ETFs, Mutual Funds And Key Holdings

Summary The Mid Cap Blend style ranks eighth in Q4’15. Based on an aggregation of ratings of 18 ETFs and 344 mutual funds. IJH is our top-rated Mid Cap Blend style ETF and LSIRX is our top-rated Mid Cap Blend style mutual fund. The Mid Cap Blend style ranks eighth out of the twelve fund styles as detailed in our Q4’15 Style Ratings for ETFs and Mutual Funds report. Last quarter , the Mid Cap Blend style ranked ninth. It gets our Dangerous rating, which is based on aggregation of ratings of 18 ETFs and 344 mutual funds in the Mid Cap Blend style. See a recap of our Q3’15 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 21 to 3330). 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. Figure 1: ETFs with the Best & Worst Ratings – Top 5 (click to enlarge) * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings The ProShares S&P MidCap 400 Dividend ETF (NYSEARCA: REGL ) and the Validea Market Legends ETF (NASDAQ: VALX ) 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 & Worst Ratings – Top 5 (click to enlarge) * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings The Boston Trust & Walden Funds SMID Cap Fund (MUTF: BTSMX ), the Nationwide Herndon Mid Cap Value (MUTF: NWWQX ) (MUTF: NWWPX ), and the Boston Trust & Walden Funds MidCap Fund (MUTF: BTMFX ), are excluded from Figure 2 because their total net assets are below $100 million and do not meet our liquidity minimums. The iShares Core S&P MidCap ETF (NYSEARCA: IJH ) is the top-rated Mid Cap Blend ETF and the Legg Mason Partners ClearBridge Mid Cap Core Fund (MUTF: LSIRX ) is the top-rated Mid Cap Blend mutual fund. IJH earns a Neutral rating and LSIRX earns a Very Attractive rating. The State Street SPDR Russell Small Cap Completeness ETF (NYSEARCA: RSCO ) is the worst-rated Mid Cap Blend ETF and the Satuit Capital Management US SMID Cap Fund (MUTF: SATDX ) is the worst-rated Mid Cap Blend mutual fund. RSCO earns a Neutral rating and SATDX earns a Very Dangerous rating. Cullen/Frost Bankers (NYSE: CFR ) is one of our favorite stocks held by Mid Cap Blend ETFs and mutual funds and earns our Attractive rating. Since 2010, Cullen/Frost has grown after-tax profits ( NOPAT ) by 8% compounded annually and improved its NOPAT margin from 25% to 28%. The company currently earns a return on invested capital ( ROIC ) of 9%. CFR has been beaten down 15% this year despite solid fundamentals. At its current price of $64/share, CFR has a price to economic book value ( PEBV ) ratio of 1.2. This ratio implies the market expects Cullen/Frost to grow its NOPAT by only 20% over the remainder of its corporate life. If Cullen/Frost can continue to grow NOPAT by 8% compounded annually for the next five years , the stock is worth $78/share today – a 13% upside. Cavium Inc. (NASDAQ: CAVM ) is one of our least favorite stocks held by Mid Cap Blend ETFs and mutual funds and earns our Dangerous rating. After turning a $10 million profit in 2010, Cavium’s NOPAT has fallen to -$23 million on a trailing-twelve-month basis. Cavium currently earns a bottom quintile ROIC of -7%, which is a significant decline from the 7% earned in 2010. Despite the deteriorating fundamentals, CAVM is up 15% on the year and the expectations baked into the current stock price leave shares with significant downside risk. To justify its current price of $71/share, Cavium must immediately achieve pre-tax margins of 6.5% (same margin as 2010) and grow revenue by 20% compounded annually for the next 26 years . Given the competitive semiconductor industry in which Cavium operates, it seems highly optimistic to expect double-digit revenue growth for nearly three decades. 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 ETFs (click to enlarge) Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Funds (click to enlarge) Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, style, or theme.