Wednesday, 29 June 2022 02:25

Make Fund Scores Your Default Selection Tool

Written by
Rate this item
(0 votes)

Many advisors struggle to navigate the large universe of ETFs and mutual funds because the differences can be difficult to fully realize. Sorting through which offering is the best for a given portfolio has long been an arduous process. However, Nasdaq Dorsey Wright has a great solution in their Fund Score, which distills valuable information into a single score. The Fund Score offers advisors an easy way to gauge fund potential and select funds for clients. By weighting a combination of trend analysis, market strength, and peer relative strength they provide the possibility to edge out additional alpha for clients by selecting the ideal fund.

This fund scoring method has a strong historical track record, for example in the latest materials super cycle. For example, funds with the highest scores in the sector such as the First Trust Materials AlphaDEX Fund (FXZ) have had some of the highest gains relative to their counterparts, such as the SPDR sector basic materials fund (XLB). In fact, XLB's lack of success correlated with their lowest fund score for the sector. This isn’t disparaging of XLB’s methodology, because their specific fund weights could prove very successful in the future, and FXZ could suffer as a result of their current weighting. Rather it's a testament to the importance of fund scores as a methodology in selection. Breaking down fund performance attributes and integrating fund scores plays a pivotal role in gaining an edge, and Nasdaq Dorsey Wright can help advisors bring that advantage to their clients.

Learn more about Nasdaq Dorsey Wright’s Fund Score

Contact Us



Subscribe to our daily newsletter

We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…