quant ratings not making sense

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  • updated
  • Under review

SOXL is a 3x bull instrument based on SOXX. Currently, SOXX has a "buy" quant rating, but SOXL has a "strong sell" quant rating. It's hard to have faith in a supposedly "objective" system that produces strongly contradictory results. Taken with the fact that only extremely vague explanations are given for how they work, makes me questions whether the quant ratings are even trustworthy at all.

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Steven Cress
  • Under review

We appreciate you reviewing the ETF grades. From my perspective, and having been an ETF Trader, these are completely different instruments and it is very transparent in the ETF factor grades and underlying factor grades (one click away from the ETF stock page). Notably, leverage carries significant risk, significantly higher expenses, and very different performance from a momentum score - YTD, SOXX is down 28% and SOXL is down 76%. Additionally, one ETF has a substantially higher dividend rate and this impacts a quantitative scoring system. From a data driven perspective, these are two completely different investment vehicles.