The Large Cap Blend style ranks first out of the twelve fund styles as detailed in our3Q19 Style Ratings for ETFs and Mutual st quarter, the Large Cap Blend style ranked first as well. It gets our Very Attractive rating, which is based on an aggregation of ratings of 78 ETFs and 711 mutual funds in the Large Cap Blend style as of July 15, 2019. See a recap of our2Q19 Style Ratings here.

Figures 1 and 2 show the five best and worst rated ETFs and mutual funds in the style. Not all Large Cap Blend style ETFs and mutual funds are created the same. The number of holdings varies widely (from 20 to 1509). This variation creates drastically different investment implications and, therefore, ratings.

Investors seeking exposure to the Large Cap Blend style should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2.

Ourempowers our uniqueETF and mutual fund rating methodology, which leverages our rigorous analysis of each funds holdings.[2]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.

Figure 1: ETFs with the Best & Worst Ratings Top 5

* Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity.

Sources: New Constructs, LLC and company filings

Five ETFs (EDOW, SYE, ADRD, ESGG, LEAD) are excluded from Figure 1 because their total net assets (TNA) are below $100 million and do not meet our liquidity minimums.

Figure 2: Mutual Funds with the Best & Worst Ratings Top 5

* Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity.

Sources: New Constructs, LLC and company filings

Four mutual funds (IESGX, JAMEX, SESGX, AVEWX) are excluded from Figure 2 because their total net assets (TNA) are below $100 million and do not meet our liquidity minimums.

iShares Edge MSCI USA Quality Factor ETF (QUAL) is the top-rated Large Cap Blend ETF and GMO Quality Fund (GQLOX) is the top-rated Large Cap Blend mutual fund. Both earn a Very Attractive rating.

ERShares Entrepreneur 30 ETF (ENTR) is the worst rated Large Cap Blend ETF and Virtus Rampart Sector Trend Fund (PWBAX) is the worst rated Large Cap Blend mutual fund. ENTR earns a Neutral rating and PWBAX earns a Very Unattractive rating.

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 funds performance is only as good as its holdings performance. Dont just take our word for it,see what Barrons sayson this matter.

Analyzing each holding within funds is no small task. OurRobo-Analyst technologyenables us to perform this diligence with scale and provide theresearch neededto fulfill the fiduciary duty of care. More of the biggest names in the financial industry (seeAt 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 Large Cap Blend ETFs and mutual funds.

Figure 3: Separating the Best ETFs from the Worst Funds

Sources: New Constructs, LLC and company filings

Figure 4: Separating the Best Mutual Funds from the Worst Funds

Sources: New Constructs, LLC and company filings

This article originally published onJuly 16, 2019.

Disclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, style, ortheme.

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[1]Harvard Business School features the powerful impact of our research automation technology in the caseNew Constructs: Disrupting Fundamental Analysis with Robo-Analysts.

[2]Thispapercompares our analytics on a mega cap company to other major providers. The Appendix details exactly how we stack up.

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