Portfolio Research and Methodology

The challenge of selecting the right ETFs

With so many ETFs now available covering similar sectors and classes the challenge for a portfolio manager is not simply selecting a winning asset allocation and weighting, it is selecting the best ETFs within a sector or class that will make the difference.

At Saddle River Capital Management we maintain a proprietary model that combines fundamental, technical, and economic research to arrive at our allocation decisions.

In the fundamental segment we look at key fundamental data for the underlying companies within the ETFs. We then create a score for each ETF we research based on the fundamentals.

The key to the technical research is a proprietary momentum screen that views total return over several periods in relation to key benchmarks, relative strength and momentum value for each ETF.

The economic research is conducted running correlation of key economic data versus major index benchmarks.