Bad and Ugly Materials Sector ETFs
David Trainer submits:We recommend investors avoid all materials sector ETFs. We found no ETFs in the materials sector that offer investors attractive investment merit and acceptable structural integrity. We rate the investment merit of the top six materials sector ETFs. Per our first-quarter-2011 review of U.S. Equity Sector ETFs, the materials sector is one of five sectors that gets our “neutral” rating. Figure 2 shows how the materials sector’s stocks and the market value attributed to them stack up under the microscope of our stock rating system. Unlike other neutral-rated sectors, like the utilities sector, the materials sector has quite a few, 25 to be exact, stocks that we rate attractive-or-better. And the sector only has six stocks that are ranked “very dangerous."[Click all to enlarge]
Figure 1: Materials Sector – Capital Allocation & Holdings by Risk/Reward Rating
Sources: New Constructs, LLC and company filings
The materials sector has 46% ofComplete Story »
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