ETF Power Rankings Sample
The ETF Power Rankings System
The ETF market is bigger and noisier than ever. Investors need more than past performance or star ratings—they need a disciplined, transparent model that surfaces durable, investable funds. The ETF Power Rankings is a multi-factor ranking system that blends institutional fundamentals with real-world practicality to deliver a clean, comparable 1–10 score for every ETF we analyze.
How the Score Is Built
- Score ETFs on 10 categories: Costs, Liquidity, Risk, Size, Value, Dividends, Growth, Quality, Momentum, and Sentiment.
- Winsorize raw metrics to reduce outlier noise.
- Standardize every metric onto a 1–10 scale.
- Compute category scores as weighted blends of their metrics.
- Create a composite score from category weights.
- Normalize composite scores across all ETFs.
- Apply a light growth–value imbalance penalty (λ = 0.05) to discourage over-concentration.
What’s Inside Each Category
Quality emphasizes margin strength, ROA/ROE/ROTC, and balance-sheet resilience.
Growth captures sales, EPS, and FCF acceleration using actual and forecast rates.
Value uses EV/EBITDA, P/E, P/CF, and P/S to avoid overpaying.
Risk incorporates beta, debt burden, interest coverage, and concentration risk.
Sentiment includes earnings revisions and earnings surprise scores.
Momentum blends return persistence with trend confirmations (SMA positioning).
Liquidity & Size ensure tradability and scalability.
Costs scores ETFs by efficiency via expense ratios.
Dividends evaluate yield durability, growth, and safety—not just payouts.
Why It Works
Multi-factor investing has outperformed single-factor screens across market cycles. The ETF Power Rankings respects that evidence: it rewards profitability and growth that are priced reasonably, confirms leadership with momentum and sentiment, and avoids structural risks that can impair compounding. The final result is a clear ranking that balances robustness with practicality, helping investors filter thousands of ETFs down to a focused, high-quality set of candidates.