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Best And Worst Q2’16: All Cap Growth ETFs, Mutual Funds And Key Holdings

The All Cap Growth style ranks eighth out of the twelve fund styles as detailed in our Q2’16 Style Ratings for ETFs and Mutual Funds report. Last quarter , the All Cap Growth style ranked seventh. It gets our Neutral rating, which is based on aggregation of ratings of 17 ETFs and 547 mutual funds in the All Cap Growth style. See a recap of our 1Q16 Style Ratings here. Figures 1 and 2 show the five best and worst rated ETFs and mutual funds in the style. Not all All Cap Growth style ETFs and mutual funds are created the same. The number of holdings varies widely (from 13 to 2185). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the All Cap Growth style 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 Click to enlarge * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings Five ETFs are excluded from Figure 1 because their total net assets are below $100 million and do not meet our liquidity minimums. Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5 Click to enlarge * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings PNC Large Cap Growth Fund ( PEWIX , PEWCX ) and Catalyst/Lyons Hedged Premium Return Fund (MUTF: CLPFX ) are excluded from Figure 2 because their total net assets are below $100 million and do not meet our liquidity minimums. iShares Core US Growth ETF (NYSEARCA: IUSG ) is the top-rated All Cap Growth ETF and Eaton Vance Atlanta Capital Select Equity Fund (MUTF: ESEIX ) is the top-rated All Cap Growth mutual fund. IUSG earns an Attractive rating and ESEIX earns a Very Attractive rating. Calamos Focus Growth ETF (NASDAQ: CFGE ) is the worst rated All Cap Growth ETF and ACM Dynamic Opportunity Fund (MUTF: ADOAX ) is the worst rated All Cap Growth mutual fund. CFGE earns a Neutral rating and ADOAX earns a Very Dangerous rating.. Gilead Sciences (NASDAQ: GILD ) is one of our favorite stocks held by MNNYX and earns a Very Attractive rating. Gilead has grown after-tax profit ( NOPAT ) by 39% compounded annually since 2005. Over the same time, Gilead has increased its return on invested capital ( ROIC ) from 37% in 2005 to a top-quintile 88% in 2015. Over the past five years, Gilead has generated a cumulative $26 billion in free cash flow . Despite the operational successes, GILD remains undervalued. At its current price of $88/share, GILD has a price-to-economic book value ( PEBV ) ratio of 0.6. This ratio means that the market expects Gilead’s NOPAT to permanently decline by 40%. However, if Gilead can grow NOPAT by just 4% compounded annually for the next five years , the stock is worth $183/share today – a 107% upside. DexCom (NASDAQ: DXCM ) is one of our least favorite stocks held by KAUBX and earns a Dangerous rating. Over the past decade, DexCom’s NOPAT has declined from -$37 million to -$54 million. The company’s ROIC has been negative in every year since IPO and is currently a bottom quintile -28%. Nevertheless, DXCM is priced as though the company will achieve high levels of profitability. To justify its current price of $64/share, DXCM must immediately achieve 5% pre-tax margins (from -13% in 2015) and grow revenue by 31% compounded annually for the next 17 years . We feel it should be clear just how overvalued DXCM is at the current price. Figures 3 and 4 show the rating landscape of all All Cap Growth ETFs and mutual funds. Figure 3: Separating the Best ETFs From the Worst Funds Click to enlarge Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Funds Click to enlarge Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, style, or theme. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Buy 3 Best-Rated Diversified Bond Mutual Funds Now

Mutual funds having a significant exposure to diversified bonds are excellent choices for investors seeking steady returns with a relatively low level of risk. Investing in funds, which maintain a portfolio of bonds issued across a wide range of market sectors, also reduces sector-specific risk. Moreover, investing in diversified bond funds is preferred to individual bond investing, as building a portfolio of the second type may prove to be relatively more expensive. A higher level of liquidity also makes diversified bond funds more attractive. Below we share with you three best-ranked diversified bond mutual funds . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. PIMCO Fixed Income SHares M (MUTF: FXIMX ) seeks to maximize total return with capital preservation. FXIMX may invest 100% of its assets in mortgage- and other asset-backed securities that are believed to provide a fixed level of income. These securities include commercial mortgage-backed securities, collateralized mortgage obligations and mortgage pass-through securities. The PIMCO Fixed Income SHares M fund returned 7% over the past one year. Curtis A. Mewbourne is the fund manager of FXIMX since 2009. Voya Intermediate Bond Fund A (MUTF: IIBAX ) invests a major portion of its assets in investment-grade bonds including corporate, government and mortgage bonds. IIBAX seeks to provide maximum total return. The Voya Intermediate Bond A fund returned 2.7% in the last one-year period. IIBAX has an expense ratio of 0.66% compared to the category average of 0.82%. PIMCO Investment Grade Corporate Bond Fund A (MUTF: PBDAX ) seeks total return along with capital preservation. PBDAX invests a large portion of its assets in investment grade debt securities of varying maturities that may be represented by derivative instruments. PBDAX may invest a maximum 15% of its total assets in junk bonds, rated B or higher by Moody’s. The PIMCO Investment Grade Corporate Bond A fund returned 2.8% over the past one year. As of December 2015, PBDAX held 1111 issues with 17.05% of its assets invested in Cdx Ig25 5y Ice. Original Post

4 Strong Buy Technology Mutual Funds

More often than not, the technology sector reports above par earnings than other sectors fueled by the demand for technology and innovation. However, technology stocks are considered to be more volatile than other sector stocks in the short run. In order to minimize this short-term volatility, almost all tech funds adopt a growth management style with focus on strong fundamentals and a relatively broader investment horizon. Investors having an above par appetite for risk and a fairly longer investment horizon should park their savings in these funds. Below, we will share with you four buy-rated technology mutual funds . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) as we expect these mutual funds to outperform their peers in the future. Fidelity Advisor Electronics A (MUTF: FELAX ) seeks capital appreciation. FELAX invests a large portion of its assets in common stocks of companies whose primary operations are related to electronic components, equipment vendors, electronic component manufacturers, electronic component distributors, electronic instruments and electronic systems vendors. Investments are made in both domestic and foreign companies. FELAX uses a fundamental analysis to select companies for investment purposes. The Fidelity Advisor Electronics A is non-diversified and has a three-year annualized return of 16.4%. FELAX has an expense ratio of 1.27% as compared to the category average of 1.42%. Putnam Global Technology A (MUTF: PGTAX ) invests in common stocks of both mid and large-sized companies across the world. PGTAX invests a major portion of its assets in securities of companies in the technology industries. The Putnam Global Technology A is non-diversified and has a three-year annualized return of 13.1%. As of March 2016, PGTAX held 68 issues with 12.76% invested in Alphabet Inc C. Fidelity Select Software & Comp Portfolio (MUTF: FSCSX ) seeks growth of capital. FSCSX invests a major portion of its assets in companies whose primary operations are related to software or information-based services. FSCSX primarily focuses on acquiring common stocks of both domestic and foreign companies. FSCSX uses fundamental analysis to select companies for investment purposes. The Fidelity Select Software & Comp Portfolio is non-diversified and has a three-year annualized return of 14.6%. FSCSX has an expense ratio of 0.76% as compared to the category average of 1.42%. MFS Technology B (MUTF: MTCBX ) invests a large chunk of its assets in securities of companies involved in operations related to products and services that are believed to benefit from advancement and improvement of technology. MTCBX invests in securities issued throughout the globe including those from emerging markets. MFS Technology B is a non-diversified fund and has a three-year annualized return of 12.8%. Matthew D. Sabel is the fund manager since 2011. Original Post