Tuesday, January 24, 2012

Where Best to Compare ETFs

Two Websites ace the data you need to compare exchange-traded funds: XTF and ETFdb have the sharpest tools in the drawer—including illustrated tools that let you search by geographic reach. Barron's by Mike Hogan

As easy as they are to trade, and as cheap as they are to own, it's often hard to see an exchange-traded fund for its metrics.

Think about how hard it is to penetrate any single security's forest of data, times 25 to 700 fund holdings. Then multiple that by three or more funds that qualify as comparable investments.

Whenever I have to build an ETF short list, the two sites I invariably turn to are XTF (xtf.com) and ETF Database, or ETFdb (http://etfdb.com).

They slice and dice the 1,400-ETF universe in numerous different ways—but, between them, I can always find the right tool for the job. And both are revamping their fund sifters right now.

XTF has just finished revamping its ETF Comparison and ETF Explorer tools.

The first helps subscribers assemble up to six similar funds to compare by a keyword, security's name or a fund's ticker symbol, while the second lets the user whittle down funds by investment objective. The popularity of these two most-often-used tools has led XTF to integrate some of their features into other parts of the site as well, reports president and CEO Mel Herman.

A search on any ETF ticker also fetches links to up to six similar funds. Clicking on the new Compare ETFs button atop the fund-profile pages instantly launches a spreadsheet-like display of all metrics for those funds. The user can easily add or remove funds to the list.

For example, a search on the very popular iShares MSCI Emerging Markets Index (ticker: EEM) brings up five like tickers. But some, such as the Rydex MSCI Emerging Markets Equal Weight ETF (EWEM), garner a low overall investibility score—based on XTF'S many-factored ranking algorithm—compared to XTF's 8.3 rating for EEM, on a scale of 10.

Both XTF and ETFdb have tools that let the user quickly find ETFs by exposure to a particular security. Both have exhaustive Boolean screeners, but they're executed differently. ETFdb's is subtractive, narrowing down the 1,400-strong ETF universe as the user clicks parameters for the 17 most common fund descriptors.

The data are organized under several topic-appropriate tabs; again, ETF data being so voluminous no single page can hold it all.

Like XTF, ETFdb also breaks down major fund characteristics graphically for quicker comprehension; and, later this month, it will start assigning A-to-F letter grades. Users will be able to see how a fund stacks up against its peers in fund expenses, performance, liquidity, volatility, dividends and concentration risk.

The power of XTF and ETFdb ultimately depends on their laborious updates of vast pools of information. Just as important are the clever ways both Websites let you grab onto just the piece of the ETF universe you want—and save yourself from drowning in a sea of incoherent data.


farmland as an investment said...

Very interesting places for comparison. Do they also compare UK ETFs as well I wonder?

Div Guy said...

I believe they are both US based ETF sites.


Now thats not a bad take on ETF'S