The Consumer Cyclicals sector ranks ninth out of the 11 sectors as detailed in our 2Q19 Sector Ratings for ETFs and Mutual Funds report. It gets our Unattractive rating, which is based on an aggregation of ratings of the 439 stocks in the Consumer Cyclicals sector as of April 11, 2019.
Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the sector. Not all Consumer Cyclicals sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 25 to 294). This variation creates drastically different investment implications and, therefore, ratings.
Investors seeking exposure to the Consumer Cyclicals sector 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
* Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity.
Sources: New Constructs, LLC and company filings
Six ETFs (FTXD, PMR, IEDI, PBS, JHMC, PSCD) are excluded from Figure 1 because their total net assets (TNA) are below $100 million and do not meet our liquidity minimums.
Figure 2: Mutual Funds with the Best & Worst Ratings
* Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity.
Sources: New Constructs, LLC and company filings
RCD is the top-rated Consumer Cyclicals ETF and FDLSX is the top-rated Consumer Cyclicals mutual fund. Both earn a Very Attractive rating.
PEJ is the worst rated Consumer Cyclicals ETF and ICCAX is the worst rated Consumer Cyclicals mutual fund. PEJ earns a Neutral rating and ICCAX earns a Very Unattractive rating.
439 stocks of the 2750+ we cover are classified as Consumer Cyclicals stocks.
The Danger Within
Buying a fund without analyzing its holdings is like buying a stock without analyzing its business and finances. Put another way, research on fund holdings is necessary due diligence because a fund’s performance is only as good as its holdings’ performance.
PERFORMANCE OF HOLDINGs = PERFORMANCE OF FUND
Figures 3 and 4 show the rating landscape of all Consumer Cyclicals ETFs and mutual funds.
Figure 3: Separating the Best ETFs From the Worst ETFs
Sources: New Constructs, LLC and company filings
Figure 4: Separating the Best Mutual Funds from the Worst Mutual Funds
Sources: New Constructs, LLC and company filings
Disclosure: David Trainer, Peter Apockotos, and Kyle Guske receive no compensation to write about any specific stock, sector or theme.