ETF Power Rankings: Top-Ranked Stocks in the Top-Ranked Funds Bull market engines appear to be firing up. When I shared my Quantum Edge System’s ETF Power Rankings a month ago, they were dominated by funds investing in financial stocks. Financials took off after the election as investors expect falling rates and the incoming administration will lead to more mergers and acquisitions – which banks oversee – as well as lending. But financials aren’t bull market engines. For that, we typically look to Technology and Discretionary stocks. I also like to see Industrials in the mix as infrastructure improvement is a solid economic driver. And sure enough, funds investing in Technology and Discretionary stocks have infiltrated the latest ETF Power Rankings. Last month, seven of the 10 highest-rated ETFs were financials. Today, that number has dropped to two. Tech especially is strengthening again, as shown by the Nasdaq Composite toping 20,000 yesterday for the first time in its 53-year history. Let’s look at the current Top 5 ETFs and their important data, and then we’ll talk about some of the stocks in those funds. The ETF at the top of the pack is interesting because it combines both technology and income (produced by selling call options). Income is another big trend as falling interest rates also bring down yields on money market accounts, which still hold a record $6.5 trillion. Please note that several of these funds are fairly illiquid with low trading volume. I generally avoid low-liquidity investments. #1 ETF: FT Vest Dow Jones Internet & Target Income ETF (FDND) - Quantum Score: 76.1
- Last 3 months: +25.7%
- Top 5 holdings: Amazon (AMZN), Meta Platforms (META), Netflix (NFLX), Salesforce (CRM), Booking Holdings (BKNG)
- Tracks: Options on Dow Jones Internet Composite Index or Nasdaq-100 Index
#2 ETF: First Trust Dow Jones Internet Index Fund (FDN) - Quantum Score: 75.9
- Last 3 months: +29.7%
- Top 5 holdings: Amazon (AMZN), Meta Platforms (META), Netflix (NFLX), Salesforce (CRM), Alphabet (GOOGL)
- Tracks: Dow Jones Internet Composite Index
#3 ETF: Invesco Dynamic Leisure and Entertainment ETF (PEJ) - Quantum Score: 74.8
- Last 3 months: +23.4%
- Top 5 holdings: Formulate One Group (FWONK), Expedia Group (EXPE), Royal Caribbean (RCL), Warner Bros. Discover (WBD), Booking Holdings (BKNG),
- Tracks: Dynamic Leisure & Entertainment Intellidex℠ Index (Index)
#4 ETF: First Trust Expanded Technology ETF (XPND) - Quantum Score: 73.5
- Last 3 months: +15.3%
- Top 5 holdings: Salesforce (CRM), Meta Platforms (META), Broadcom (AVGO), Nvidia (NVDA), Netflix (NFLX)
- Tracks: Actively managed
#5 ETF: Burney U.S. Factor Rotation ETF (BRNY) - Quantum Score: 73.2
- Last 3 months: +15.6%
- Top 5 holdings: Fortinet (FTNT), Meta Platforms (META), Synchrony Financial (SYF), Nvidia (NVDA), Apple (AAPL)
- Tracks: Actively managed/market patterns Burney believes to be in favor
Top Stocks in Those Top ETFs One stock is a top holding in four of the five top ETFs: Meta Platforms (META), the company formerly known as Facebook. You can see by the scores below that it’s a hot stock right now. That overall Quantum Score of 82.8 puts it in the buy zone (70 to 85). 
Source: Quantum Edge Pro The Fundamental Score of 70.8 is very good. I wouldn’t call it elite, but I’m generally happy with anything over 70. Shares have rallied 14% just since mid-November, and my system has picked up three Big Money green light buy signals here in December. That has propelled the Technical Score over 90, which is borderline overheated. Two stocks are a top holding in three of the five funds. Salesforce (CRM) is the highest scorer at 84.5, which is higher than Meta’s. 
Source: Quantum Edge Pro I like the balance with the higher-rated fundamentals and slightly less hot technicals. CRM has been hot, though, running 43% in the last three months – including an 11% pop last Wednesday after earnings showed strength in the company’s artificial intelligence products. I’ve liked CRM for a long time, and it is now up more than 80% in our TradeSmith Investment Report portfolio. Netflix (NFLX) is the other stock in three of the top ETFS, and it checks in with a robust Quantum Score of 81. 
Source: Quantum Edge Pro Its fundamentals match Meta’s and its technical match Salesforce’s. Shares have run 39% in the last three months, and my system detected 9 Big Money buy signals in that time. Taken all together, this is exactly what I wanted to see if this latest run is going to have legs. I expect it to, and the shifting ETF Power Rankings and stocks leading the way indicate more good times ahead. Talk soon,  Jason Bodner
Editor, Jason Bodner's Power Trends | 
0 Response to "ETF Power Rankings: Top-Ranked Stocks in the Top-Ranked Funds"
Post a Comment