The ETF Power rating combines our proprietary stock rating model with technical analysis factors into a unique view of an ETF’s potential. The ETF rating ranges from Very Bearish (likely to underperform) to Very Bullish (likely to outperform).
For Equity ETFs, the rating consists of three components:
- The Technical Rank, which is a Proprietary Rank of the Technical Strength of the ETF relative to all US-Listed ETF’s.
- The underlying constituent unweighted ratings, which aggregates the Power ratings of the underlying US Equities (stocks) held by this ETF and utilizes this count in a proprietary ratio.
- The underlying constituent weighted ratings, which aggregates the Power ratings of the underlying US Equities (stocks) held by this ETF weighted by the percent of total ETF Holdings.
For ratings on Non- US Equity ETFs, such as Fixed Income, or Global Equity, we utilize the technical factor which evaluates short, intermediate, and longer-term price strength relative to the whole ETF universe, and has been shown to be a strong indicator of performance by itself.
ETF Ratings are an indication of likely intermediate-term relative performance of an ETF, and can be used to help decide which ETFs to overweight, underweight, or avoid in a portfolio.
Very Bullish ETFs are the most likely to outperform all other ETFs in the same asset class in a 3-6 month timeframe,
Very Bearish ETFs are the most likely to underperform all other ETFs in the same asset class in a 3-6 month timeframe.
Since ETFs reflect a number of investment strategies, the ETF Power Ratings can help you achieve a more likely to outperform allocation across Sectors, Market Cap, Growth/Value – and ultimately across asset classes – in line with our backtested methodology.