by Stan Heller, Consultant, VectorVest Canada
November 29, 2014
Trading the TOP ETF Industries explained in last week’s SOTW can provide a simple way to diversify one’s portfolio. ETF’s include index tracking as well as sector/industry tracking. From the Delta search results shown below, there have been a few strong performers these past 12 months including the ZID India Fund, up almost 54%. However, it’s quite a bit more challenging to track ETF categories in Canada, unless you take the time to set up a few WatchLists. Once your WatchLists are set up, you can use them in UniSearch to filter on any category. You can also choose to exclude leveraged ETF’s if you wish.
To get you started, I created the spreadsheet shown below. I’ve segmented Canadian ETF’s into what seems to be a few logical categories, however, you’ll probably want to set them up in categories that make sense for you.
TOP 10 PRICE PERFORMERS
ETF’s don’t have to be dull and boring. As you can see from the Delta UniSearch below, several ETF’s have been strong performers over the past year (Nov 29, 2013 to Nov 28, 2014). You can use ETF’s as investments on their own, or you can use them to track indices and industries to find ideas for trending stocks.
CHARTING
I suggest taking a longer term perspective using a weekly chart for ETF’s. A simple chart using RT (Relative Timing) supported by a 30 or 40-SMA seems to work well for trending ETF’s. Look for ETF’s with RT>1.0. You might also tray the 3MA/8MA crossover suggested by Petra Hess in a recent Blog article.
UNISEARCH CRITERIA. Please review the Friday, November 21 for ideas about ETF searches. You may choose to create your own search or modify a search using criteria such as a WATCHLIST FILTER, RT>1.0 and AVERAGE VOLUME>5,000 for example.
WATCHLIST CATEGORIES. Once you’ve decided on your categories, it’s easy to set-up your WatchLists in VectorVest. Below is an example of a few WatchList Categories.
Your comments and suggestions for improvements to the WatchList Categories would be appreciated. What are your favourite ETF’s and why?
Thanks for that Stan, I’ve been studying this also since many of them started showing up. In you’re chart ETF-s Bullish do you include both leveraged and non-leveraged ETF’s?
Yes, I have included the Leveraged Bullish ETF’s in the chart. There are only 12 Leveraged ETFs in Canada. A person could simply remove them from your WatchLists or exclude them in UniSearch using a watchlist filter: Stock WatchList <> Leveraged ETFs – Regular.