The Consumer Non-cyclicals sector ranks first out of the 11 sectors as detailed in our Q2'18 Sector Ratings for ETFs and Mutual Funds report. Last quarter, the Consumer Non-cyclicals sector ranked first as well. It gets our Very Attractive rating, which is based on an aggregation of ratings of 12 ETFs and 21 mutual funds in the Consumer Non-cyclicals sector.

See a recap of our Q1'18 Sector Ratings here. Figures 1 and 2 show the best and worst rated ETFs and mutual funds in the sector. Not all Consumer Non-cyclicals sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 17 to 111). This variation creates drastically different investment implications and, therefore, ratings. ] We think advisors and investors focused on prudent investment decisions should include analysis of fund holdings in their research process for ETFs and mutual funds. 100 million for inadequate liquidity.

100 million and do not meet our liquidity minimums. 100 million for inadequate liquidity. 100 million and do not meet our liquidity minimums. Fidelity MSCI Consumer Staples Index ETF (FSTA) is the top-rated Consumer Non-cyclicals ETF and Vanguard Consumer Staples Index Fund (VCSAX) is the top-rated Consumer Non-cyclicals mutual fund.

Both earn a Very Attractive rating. PowerShares S&P Small Cap Consumer Staples Portfolio (PSCC) is the worst rated Consumer Non-cyclicals ETF and Putnam Global Consumer Fund (PGCOX) is the worst rated Consumer Non-cyclicals mutual fund. Both earn an Unattractive rating. 140 stocks of the 3,000-plus we cover are classified as Consumer Non-cyclicals stocks.

Buying a fund without analyzing its holdings is like buying a stock without analyzing its business and finances. Put another way, research on fund holdings is necessary due diligence because a fund’s performance is only as good as its holdings’ performance. Don’t just take our word for it, see what Barron’s says on this matter.

Analyzing each holding within funds is no small task. Our Robo-Analyst technology enables us to perform this diligence with scale and provide the research needed to fulfill the fiduciary duty of care. More of the biggest names in the financial industry (see At BlackRock, Machines Are Rising Over Managers to Pick Stocks) are now embracing technology to leverage machines in the investment research process.

Technology may be the only solution to the dual mandate for research: Cut costs and fulfill the fiduciary duty of care. Investors, clients, advisors and analysts deserve the latest in technology to get the diligence required to make prudent investment decisions. Figures 3 and 4 show the rating landscape of all Consumer Non-cyclicals ETFs and mutual funds.

Disclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, sector or theme. ] Harvard Business School features the powerful impact of our research automation technology in the case New Constructs: Disrupting Fundamental Analysis with Robo-Analysts. ] Ernst & Young’s recent white paper “Getting ROIC Right” proves the superiority of our holdings research and analytics.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

The Vanguard Extended Market ETF (NYSEARCA:VXF) fills in the ex-S&P 500 gaps for investors. As indicated by VXF’s massive roster of over 3,260 stocks, the ex-S&P 500 gap is significant. 4.5 billion, putting it in the less volatile mid-cap category. 5.8 billion in assets under management, so it is by no means small. This Vanguard fund allocates 19.6% of its weight to tech stocks and almost a third of its combined weight to the financial services and consumer discretionary sectors.