Version 1.4, published Oct 22, 2026: 5 criteria, 1 source, 2 of the 5 measures backed by peer-reviewed research.
John Templeton's philosophy, applied to ETFs
In the tradition of John Templeton, this seat reads 5 criteria from ETFIQ data, version 1.4 of Oct 22, 2026. What is out of favour, and is it cheap?
Bio
John Marks Templeton was born on Nov 29, 1912, in Winchester, Tennessee. He graduated from Yale in 1934 and studied law at Balliol College, Oxford, as a Rhodes Scholar, finishing in 1936. He began his Wall Street career in 1938.
When war broke out in Europe in 1939, he bought shares in 104 companies, each priced at a dollar or less. The purchase became the most famous example of his habit of buying when others despaired.
In 1954 he entered the mutual fund business by founding the Templeton Growth Fund, which became the flagship of a family of funds. The Associated Press reported at his death that $10,000 invested in the fund at its start in 1954, with dividends reinvested, would have grown to $2 million by 1992, the year he sold the Templeton funds to the Franklin group for $440 million. The figure is the AP's.
In the late 1960s he moved to Nassau in the Bahamas and became a naturalized British citizen. He founded the Templeton Prize in 1972, set up the John Templeton Foundation in 1987, and was made a Knight Bachelor by Queen Elizabeth II the same year.
The foundation notes that in 1999 *Money* magazine called him arguably the greatest global stock picker of the century.
He died of pneumonia at Doctors Hospital in Nassau on July 8, 2008, aged 95.
Philosophy
Templeton's investing rested on one observation: prices are lowest when people are most pessimistic, and the crowd is usually wrong at extremes. His own summary is the 1993 article *16 Rules for Investment Success*, written as a professional of half a century for ordinary investors.
Its first rule is to aim for the largest total return after taxes and inflation. Templeton called this the only rational objective for most long-term investors, and argued that putting too much in fixed income fails it, because inflation erodes buying power. Most of his clients' money, he wrote, had been in common stocks most of the time.
The core of the method is buying low, which he admitted is simple to say and hard to do. Buying when everyone else is selling, when things look darkest and when experts call stocks risky goes against human nature. He invoked Benjamin Graham's advice to buy when most people, experts included, are pessimistic and to sell when they are actively optimistic. A popular kind of investment, he warned, always loses its popularity in time, and may not regain it for years.
He paired contrarian timing with judgment about quality. One rule tells the investor to look for bargains among quality companies, which he defined as market leaders, technological leaders, strong and proven management, sound capital and trusted brands. He told readers to buy individual stocks for their value rather than to bet on the market's trend or the economic outlook. And he cautioned that there is no free lunch: never invest on sentiment, on a tip or to save a commission, since even an excellent company can be priced too high.
Where he looked mattered as much as when. His diversification rule is to spread holdings by industry, by risk and by country, because a search worldwide finds more bargains, and possibly better ones, than a search in any single nation.
He was humble about his own forecasts. The rules tell investors to monitor holdings, since no bull or bear market lasts, to avoid panic selling after a crash, and to learn from mistakes. He noted that outperforming the market is hard because index benchmarks pay no fees and are always fully invested. Another rule tells the reader to begin with a prayer, so as to think more clearly.
His final rule was a warning against being fearful or negative too often. In 1993 he wrote that, for a century, optimists had carried the day in US stocks.
Key works
- Sir John Templeton, *16 Rules for Investment Success*, first published in *World Monitor: The Christian Science Monitor Monthly*, 1993; reprinted by Franklin Templeton with the John Templeton Foundation's permission. - John Marks Templeton, *The Humble Approach* (Seabury Press, 1981). - John Marks Templeton, *The Templeton Plan* (Harper & Row, 1987). - John Marks Templeton, *Worldwide Laws of Life* (Templeton Foundation Press, 1997). - His books after 1981 are mainly about character, religion and science rather than investing; the 16 rules are his principal investing text.
What we cannot know
The rules give principles and no numbers, and no audited record of the Templeton Growth Fund under his management was opened for this profile, so his thresholds for "cheap" and his results year by year are not documented here.
Source quality
Moderate. One short investing text of his own, read in full, plus a foundation biography and wire reports of his death; the long-run fund figure rests on an Associated Press report rather than on fund documents.
In his words
“[I]f you buy the same securities everyone else is buying, you will have the same results as everyone else.”
The Templeton-style Global Contrarian seat
Templeton-style Global Contrarian is one seat of the IQ Investment Committee. It applies John Templeton's own 1993 rules to ETFIQ data.
What the investor published
In ETFIQ’s words, with the source of each. Sourced to John Templeton's own 1993 rules.
He invested when others were pessimistic, as Benjamin Graham also advised. (Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rule 4, pp. 4-5)
The popularity of any kind of investment always proves temporary. (Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rule 3, p. 4)
Look for value, not market trends or the economic outlook, and look for bargains among quality companies. (Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rules 5 and 6, p. 5)
Search worldwide: a wider search finds more bargains, and spreading money across countries is part of diversifying. (Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rule 7, 'Diversify', p. 6)
There is no free lunch: even a truly excellent company's shares can be priced too high. (Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rule 15, 'There's no free lunch', p. 8)
Research behind the measures
Peer-reviewed research on how each measure is taken. It never adds a criterion, and where it weakens one the criterion says so.
Josef Lakonishok, Andrei Shleifer and Robert W. Vishny (1994), Contrarian Investment, Extrapolation, and Risk, The Journal of Finance 49(5), 1541-1578 (doi:10.1111/j.1540-6261.1994.tb04772.x). Stocks cheap against earnings, cash flow or book value, with weak past growth, beat expensive glamour stocks over the five years after purchase, with little sign that they are riskier; the paper reads the gap as investors extrapolating past growth.
David C. Brown, Shaun William Davies and Matthew C. Ringgenberg (2021), ETF Arbitrage, Non-Fundamental Demand, and Return Predictability, Review of Finance 25(4), 937-972 (doi:10.1093/rof/rfaa027). ETF creations and redemptions signal non-fundamental demand: a portfolio short high-flow ETFs and long low-flow ETFs earned 1.1 to 2.0% a month, so money flowing in predicts reversals, not further gains.
Andrea Frazzini and Owen A. Lamont (2008), Dumb Money: Mutual Fund Flows and the Cross-Section of Stock Returns, Journal of Financial Economics 88(2), 299-322 (doi:10.1016/j.jfineco.2007.07.001). Stocks that retail money flows into through mutual funds earn lower future returns, significantly over three to five years; evidence that short-horizon flows predict higher returns is weak.
Anthony J. Richards (1997), Winner-Loser Reversals in National Stock Market Indices: Can They be Explained?, The Journal of Finance 52(5), 2129 (doi:10.2307/2329478). Across the national stock market indices of 16 countries, the markets that did worst tend to recover against those that did well; the laggards are not riskier by any measure tested, and the effect is not only in small markets.
Ronald Balvers, Yangru Wu and Erik Gilliland (2000), Mean Reversion across National Stock Markets and Parametric Contrarian Investment Strategies, The Journal of Finance 55(2), 745-772 (doi:10.1111/0022-1082.00225). Across 18 national stock indices from 1969 to 1996, relative index prices revert to the mean with a half-life of three to three and a half years, and contrarian strategies across countries outperformed.
Werner F. M. De Bondt and Richard Thaler (1985), Does the Stock Market Overreact?, The Journal of Finance 40(3), 793-805 (doi:10.1111/j.1540-6261.1985.tb05004.x). The NYSE's biggest losers over three years beat the market by 19.6% over the next 36 months while the biggest gainers trailed it by about 5%. Portfolios formed on one-year returns did not reverse: one-year losers kept trailing one-year gainers over the next 12 months (Table I).
Narasimhan Jegadeesh and Sheridan Titman (1993), Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency, The Journal of Finance 48(1), 65-91 (doi:10.1111/j.1540-6261.1993.tb04702.x). Stocks that rose most over the past 3 to 12 months keep beating those that rose least over the following 3 to 12 months; part of the gain unwinds over the next two years.
Paul Zarowin (1990), Size, Seasonality, and Stock Market Overreaction, The Journal of Financial and Quantitative Analysis 25(1), 113 (doi:10.2307/2330891). Past losers beat past gainers because losers tend to be smaller firms: compared at equal size there is little difference, so what looked like overreaction is largely a size effect.
Jennifer Conrad and Gautam Kaul (1993), Long-Term Market Overreaction or Biases in Computed Returns?, The Journal of Finance 48(1), 39-63 (doi:10.1111/j.1540-6261.1993.tb04701.x). Long-horizon contrarian returns are biased upward by cumulating monthly returns, and the true returns left to past losers and gainers show no relation to overreaction.
Clifford S. Asness, Andrea Frazzini and Lasse Heje Pedersen (2019), Quality Minus Junk, Review of Accounting Studies 24(1), 34-112 (doi:10.1007/s11142-018-9470-2). Quality, defined as profitable, growing and safe, earns significant risk-adjusted returns in the US and 24 other countries; quality stocks cost more, but not by much, and returns are highest when quality is cheap.
Joseph D. Piotroski (2000), Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers, Journal of Accounting Research 38, 1-41 (doi:10.2307/2672906). Among stocks cheap against book value, a simple score of nine accounting signals separates the financially strong from the weak, and favouring the strong raised returns materially: quality tests applied inside a cheap set work.
Compare and model modes
In compare mode funds are ordered by the seat’s score, and ties break on the look-through P/E against the world market's, lowest first.
In model mode: In each sleeve, the fund with the lowest look-through price-to-earnings ratio next to the market's, among funds that saw outflows.
How the seat is tested
The cases this seat must pass before it ships, with the result each must give.
A cheap, unloved foreign market: Supports. Priced 40% below the market on earnings, mostly in sound companies, with money leaving and three years well behind the world. One country, so the spread criterion objects, and the rest outweighs it.
A crowded, expensive favourite market: Challenges. Good companies, but dear on earnings, money pouring in, three years far ahead, and one country.
Cheap, but money is pouring in: Mixed (Price against earnings, next to the market's: Supports, Money leaving the fund: Challenges). A bargain on price that the crowd has already found.
An unloved foreign market, a little below the market's price: Supports (Price against earnings, next to the market's: Mixed, Three years against the world market: Supports, Spread across countries: Supports, Bargains among quality companies: Supports). Only 15% cheaper than the market, but in sound companies, with money leaving, 30 points behind the world over three years, and spread over six effective countries.
Cheap because its companies are failing: Mixed (Bargains among quality companies: Challenges, Price against earnings, next to the market's: Supports). Cheap, unloved and lagging, but only 15% of its weight is in companies with ten years of profits and a decent return: Templeton looked for bargains among quality stocks (rule 5), not among failing ones.
A fund whose holdings file no earnings with the SEC: Not enough data. Out of favour, but the seat cannot say whether it is cheap, and that is its required half.
A Treasury bond fund: does not apply. Outside the seat: there are no company earnings to price.
QQQ: any result but Supports. The Nasdaq-100, ahead of the world market, is not an unloved bargain.
Changes to this seat
Version 1.0, Oct 21, 2026: First version.
Version 1.1, Oct 21, 2026: The lag against the world market is read over three years, not one: research shows one-year laggards keep lagging while three- to five-year losers reverse.
Version 1.2, Oct 21, 2026: Rule 7 is read as spread across countries (effective number of countries), not the share outside the United States, which scored one-country funds as diversified; a quality criterion for rule 5 (20%); research on national indices (Richards 1997; Balvers, Wu and Gilliland 2000) and ETF flows (Brown, Davies and Ringgenberg 2021), and the size and measurement critiques (Zarowin 1990; Conrad and Kaul 1993); a launch gate for foreign earnings.
Version 1.2, Oct 22, 2026: Diversification is cited as rule 7, as the 16 Rules number it.
Version 1.3, Oct 22, 2026: Cheapness against the market decides a Challenge on its own: a fund at 1.2 times the market's P/E or more Challenges (QQQ, 1.30).
Version 1.4, Oct 22, 2026: Cheapness is read against the world stock market's look-through P/E (VT's book), not the S&P 500's: a global seat measured against the US would read every foreign fund cheap by construction.
Where to next
Scope
Funds that own companies. A bond, commodity, leveraged or coin fund has no look-through earnings to price, so it is outside this seat. Not published until the look-through prices foreign filers.
Before this seat publishes: Not published until the look-through reads earnings for foreign companies (20-F and 40-F filers in their reporting currency), so that international funds can be read.
Source strength: Strong: the investor’s own books, letters or memos. Templeton's own 1993 article of sixteen rules, the one investing text verified as his. It gives principles and no numbers, so every threshold is ETFIQ's. Books about his method by others are not used.
Lenses apply publicly known investing principles to ETFIQ data. No investor named is affiliated with or endorses ETFIQ. Not investment advice.
Sources
The published work each criterion is sourced to
| Source | What it provides | Read | Spec |
|---|---|---|---|
| Sir John Templeton, 16 Rules for Investment Success | Investing when others are pessimistic, popularity proving temporary, value rather than market trends, bargains among quality companies, searching worldwide, and the reminder that even an excellent company's shares can cost too much | World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993 | document ↗ |
Definitions and method
Is the fund's look-through price-to-earnings ratio low next to the world market's? Measure: the look-through P/E against the world market's. The fund's look-through P/E over the world stock market's (through VT's book), each stated as an index states its own. Null where either is null, which it is for VT until foreign companies' earnings are read. Supports where the look-through P/E against the world market's at or below 0.8. Challenges where the look-through P/E against the world market's at or above 1.2. Mixed between. Threshold: ETFIQ’s figure, because the investor published none. Templeton gave no number. At least 20% cheaper than the world stock market (VT's book) on look-through earnings, or 20% dearer, are ETFIQ's. A fund priced 20% or more above the market Challenges, whatever else it reads: a contrarian seat never clears a fund dear against the market. Weight: 35%; required; a Challenge here makes the seat Challenge. Sourced to: Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rules 5 and 6, p. 5; Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rule 15, 'There's no free lunch', p. 8. Research, context, not a test of the measure: Josef Lakonishok, Andrei Shleifer and Robert W. Vishny (1994), Contrarian Investment, Extrapolation, and Risk, The Journal of Finance 49(5), 1541-1578. Cheap stocks against earnings beat expensive ones over five years, but the paper sorts individual stocks into deciles; this criterion reads the fund as a whole against the market, so the paper is context.
Are investors pulling money out, or piling in? Measure: three months of flows. Net flow over the latest 3 months as a percent of net assets at the window's start. Null where any day of the window was not read. Supports where three months of flows at or below -5%. Challenges where three months of flows at or above 10%. Mixed between. Threshold: ETFIQ’s figure, because the investor published none. Outflows of 5% of assets over 3 months, or inflows of 10%, are ETFIQ's reading of pessimism and popularity. Three months of flows read only where every day of the window was read, which leaves the criterion unread for most funds today. Weight: 15%. Sourced to: Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rule 4, pp. 4-5; Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rule 3, p. 4. Research, supports the measure: David C. Brown, Shaun William Davies and Matthew C. Ringgenberg (2021), ETF Arbitrage, Non-Fundamental Demand, and Return Predictability, Review of Finance 25(4), 937-972. On ETFs themselves: funds with heavy creations underperformed those with heavy redemptions, so money leaving is the side that did better, as this criterion reads it. Research, context, not a test of the measure: Andrea Frazzini and Owen A. Lamont (2008), Dumb Money: Mutual Fund Flows and the Cross-Section of Stock Returns, Journal of Financial Economics 88(2), 299-322. Mutual fund money flowing in predicts lower returns at three to five years; mutual funds, not ETFs. Research, context, not a test of the measure: Josef Lakonishok, Andrei Shleifer and Robert W. Vishny (1994), Contrarian Investment, Extrapolation, and Risk, The Journal of Finance 49(5), 1541-1578. Unloved, cheap stocks did better; the paper reads prices and fundamentals, not fund flows.
Over three years, has the fund lagged the world's stock market, or led it? Measure: three years against the world market. The fund's cumulative 3-year total return minus VT's (the world stock market) over the same 1,095 days, percentage points. Null without 3 years of prices. Supports where three years against the world market at or below -20 points. Challenges where three years against the world market at or above 20 points. Mixed between. Threshold: ETFIQ’s figure, because the investor published none. 20 points behind or ahead of VT over three years are ETFIQ's. Version 1.0 read one year; research shows one-year laggards keep lagging, while three- to five-year losers reverse, so the window is three years. It reads stock funds only, broad, country and region funds, where the research on national indices applies; a theme fund is outside it. Weight: 20%. Applies to: the category equal to stocks. Sourced to: Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rule 3, p. 4. Research, supports the measure where the segment one of Single country or narrow region, China region, India, Japan, Latin America, Europe, Asia-Pacific excluding Japan, Asia-Pacific, Emerging markets: Anthony J. Richards (1997), Winner-Loser Reversals in National Stock Market Indices: Can They be Explained?, The Journal of Finance 52(5), 2129. At the level this criterion reads, national indices: the countries that did worst tended to recover against those that did well, and the laggards were not riskier. Research, supports the measure where the segment one of Single country or narrow region, China region, India, Japan, Latin America, Europe, Asia-Pacific excluding Japan, Asia-Pacific, Emerging markets: Ronald Balvers, Yangru Wu and Erik Gilliland (2000), Mean Reversion across National Stock Markets and Parametric Contrarian Investment Strategies, The Journal of Finance 55(2), 745-772. Relative national index prices revert with a half-life of about three years, the window this criterion uses. Research, context, not a test of the measure: Werner F. M. De Bondt and Richard Thaler (1985), Does the Stock Market Overreact?, The Journal of Finance 40(3), 793-805. Three-to-five-year losers among single US stocks went on to beat the past gainers; stocks, not funds, so context for a fund-level return. Research, weakens the measure: Narasimhan Jegadeesh and Sheridan Titman (1993), Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency, The Journal of Finance 48(1), 65-91. Over one year the opposite holds: recent losers keep losing, which is why the window is three years, not one. Research, weakens the measure: Paul Zarowin (1990), Size, Seasonality, and Stock Market Overreaction, The Journal of Financial and Quantitative Analysis 25(1), 113. Much of the stock-level reversal is a size effect: losers were smaller firms. Research, weakens the measure: Jennifer Conrad and Gautam Kaul (1993), Long-Term Market Overreaction or Biases in Computed Returns?, The Journal of Finance 48(1), 39-63. Part of the measured long-horizon reversal is a bias from cumulating monthly returns.
Is the money spread over several countries, as Templeton's rule 7 asks, or concentrated in one? Measure: the effective number of countries. The effective number of countries in the look-through book: one over the sum of each country's squared share of the weight whose country is known. 1.0 for a one-country fund; a fund spread evenly over five countries reads 5.0; VT, 63% in the US, reads about 2.5. Null where the book gives a country for less than 90% of its weight. Supports where the effective number of countries at or above 2. Challenges where the effective number of countries below 1.25. Mixed between. Threshold: ETFIQ’s figure, because the investor published none. Templeton gave no number. Two or more effective countries, the spread of a world fund such as VT (about 2.5), and under 1.25, a fund in one country or nearly so, are ETFIQ's. Rule 7 asks for spread, so the measure is spread, not the share outside the United States, which would score a one-country fund as diversified. Weight: 10%. Sourced to: Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rule 7, 'Diversify', p. 6. Research: none cited; the criterion rests on the source alone.
Is the cheapness in good businesses, or in companies that are cheap because they are failing? Measure: the share in quality companies. The share of the fund's measured look-through weight in companies with positive earnings in each of the last ten fiscal years and net income of at least 10% of equity plus debt in the last fiscal year (a financial company: of equity), percent. A loss-maker counts as failing. Null where under 70% of the weight is measured (the coverage floor). Supports where the share in quality companies at or above 60%. Challenges where the share in quality companies below 30%. Mixed between. Threshold: ETFIQ’s figure, because the investor published none. ETFIQ's reading of rule 5. Templeton defines quality in words (market and technological leadership, management, sound capital, trusted brands, p. 5) and gives no figure. Ten years without a loss and a return of 10% on equity plus debt are ETFIQ's footprints of it, and 60% and 30% of the fund's weight are ETFIQ's lines. Weight: 20%. Sourced to: Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rule 5, p. 5; Sir John Templeton, 16 Rules for Investment Success (World Monitor: The Christian Science Monitor Monthly; reprinted by Franklin Templeton with the John Templeton Foundation's permission (literature code TL-R16), first published in World Monitor, 1993; cited from Franklin Templeton's reprint TL-R16-0726 (2026), by the reprint's own printed page numbers, 1993), rule 15, 'There's no free lunch', p. 8. Research, context, not a test of the measure: Clifford S. Asness, Andrea Frazzini and Lasse Heje Pedersen (2019), Quality Minus Junk, Review of Accounting Studies 24(1), 34-112. Profitable, stable, well-run companies earned more than junk companies at similar prices; the paper tests its own quality score, not the share of weight this criterion reads. Research, context, not a test of the measure: Joseph D. Piotroski (2000), Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers, Journal of Accounting Research 38, 1-41. Among cheap stocks, those with strong accounting signals beat those with weak ones; the paper tests its F-score, not the quality share this criterion reads.
Each criterion reads one ETFIQ measure against two thresholds. Each criterion reads one measure against the seat's two thresholds: Supports where the supports condition holds, Challenges where the challenges condition holds, Mixed between them, Not enough data where the measure is missing. A criterion whose scope does not cover the subject is left out, and a seat whose scope does not cover it does not apply. The seat's score is the weighted mean of its readable criteria at +1, 0 and -1. A criterion marked veto that Challenges makes the seat Challenge, whatever the rest reads or could not read. Otherwise the seat reads Not enough data when the criteria it could read carry less than half of its weight, or when a criterion marked required cannot be read; it Supports at 0.5 or more and Challenges at -0.5 or less, and is Mixed between. A criterion that caps the seat keeps it from Supporting when it Challenges. A criterion the seat needs keeps it from Supporting unless it reads Supports itself. A seat that reads a fund's holdings states its own rule on its page. The weights. Cheapness carries the most (35%) because it is the rule Templeton returns to most; three years against the world and quality 20% each; money leaving 15%; the spread across countries 10%, since rule 7 is one rule of sixteen. The weights are ETFIQ's and were not set to land any fund.
What this cannot tell you
How to check any of this
This seat’s criteria, thresholds, weights and cases are in the committee file, the same file the committee reads.
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