March 31, 2011

Useful ETF Tools

ETFs (and ETNs) are cool.  Looking at many of them is a kid in a candy store kind of thing. To do effective momentum investing, one usually needs no more than seven or eight ETFs. More is not really better. But it’s fun to look at all the varied asset classes and interesting ideas finding their way into the ETF universe. Here are some websites to help you burrow beneath the surface of the ETF universe:

This one by Dorsey Wright is really fun to work with. After you select an equity sector (and subsector, if desired), this tool gives you a listing of ETFs with allocations in those sectors. For example, if you select energy as the sector and coal as the subsector, you get a list that begins with PowerShares Global Coal 84.3%, MarketVectors Coal 74.8% and includes every ETF with coal mining holdings.

You can also sort ETFs by geographic region and subregion or by commodities holdings. Finally, you can enter the symbols of two or more ETFs and get a report on the differences in their holdings and their performance. 

This is one of the best screening tools for indices and mutual funds, as well as ETFs. You can customize the information that is displayed and impose many different filters. The most interesting feature is being able to search for ETFs in obscure categories, such as alpha seeking and alternatives.

Here you can search for ETFs using over a dozen factors, such as category, geography, segment, niche, focus, selection criteria, and weighting scheme. See their ECS Overview for more details.

Most people don’t know you can use the powerful Finviz tool to evaluate ETFs by clicking on Scanner and selecting Exchange Traded Fund from the Industry tab. Here you can look at and sort by a multitude of interesting factors. For example, on the Technical tab, you can search for ETFs that are close to their 52 week high, which is a proven momentum factor. You can save your search profiles for later use. 

Once you identify what ETFs you are interested in, sponsor web sites are a good place to get additional information about specific ETFs. The two largest sponsors are iShares and State Street Global AdvisorsMorningstar is also good for a quick look at individual ETFs.