Technical analysts might also be impressed by the most recent data on fund flows. EDEN had the largest percentage increase in inflows (40%) of any fund during the month of March.
2. Guggenheim Solar ETF (TAN). When oil hit its slick spot in 2014, the lower cost for crude decreased the demand for alternatives like solar. With oil prices appearing to have bottomed out in December-January, however, global solar providers bounced back in dramatic fashion. Not only has TAN risen from the ashes at a lightning quick pace, but it boasts a trailing P/E (13.6) and a trailing P/B (1.8) that just may be the envy of broader U.S. benchmarks.
Reasonable valuations? Check. What about relative strength? Three months ago, TAN found itself stuck in the bottom 10% of all assets in the ETF universe. Today, it registers in the top 2%. A 50% meteoric jump off its January bottom has confirmation from a “golden cross” – a bullish signal derived from an asset’s 50-day moving average crossing above its 200-day.
3. iShares MSCI Ireland Capped ETF (EIRL). Like Denmark, EIRL is difficult to justify on the basis of investor-friendly valuations. The P/B for EIRL at 2.4 may be 17.5% cheaper than the iShares S&P 500 (IVV). Nevertheless, the real luck of the Irish may be reflected in the country’s upbeat economic outlook. According to euro-zone economists, Ireland will ride its export boom to the top of the growth charts; gross domestic product (GDP) should outperform Germany (1.5%) and Britain (2.4%) in 2015. With the euro exceptionally weak and oil dramatically lower, Ireland’s exporting of pharmaceuticals (e.g., Viagra, Botox, etc.) and organic chemicals give this exchange-traded fund most of its pop.
It is true that a consumer sentiment survey hit a 9-year high in January. That may be attributable to rising property prices, low inflation, recent tax reforms and the “de facto” tax cut associated with cheaper oil. Yet investors who frown upon high unemployment and monstrous government spending – debt-to-GDP in Ireland is 115% – may want to think twice. Others might simply embrace the remarkable relative strength and resilience of EIRL since the October lows.
