Looking Back: 2009’s Standout ETF Sectors

December 30th at 1:00pm by Tom Lydon

ETF 2009 Another year is just about gone. It’s been a year marked mostly by recovery, and exchange traded funds (ETFs) have made a good turnaround from the events of 2008. In a year of growth, which sectors and ETFs were among the standouts?

This year’s markets were topped by emerging markets with the MSCI-EAFE up around 80.2% ending Nov. 30, writes Stacy Schultz for Financial Planning. John Gabriel, ETF analyst at Morningstar, attributes the high growth in emerging economies to a growing middle class, higher domestic demand and decoupling from Western countries. [More on emerging markets.]

Shares MSCI Emerging Markets (NYSEArca: EEM): up 67.5% year-to-date

Commodities also saw a good spike on demand from a burgeoning middle class in emerging countries. Some high-performing commodities this year can be seen in gold and coal ETFs. [More on commodities.]

SPDR Gold Shares (NYSEArca: GLD): up 24.2% year-to-date

Market Vectors Coal ETF (NYSEArca: KOL): up 143.8% year-to-date

The top sector was technology. U.S. investors liked the balance sheets of giant technology corporations and the sector saw good performance and comparable inflows throughout the year. [More on the technology sector.]

Technology Select SPDR (NYSEArca: XLK): up 51.5% year-to-date

The second best sector was consumer discretionary, a good indicator for investor confidence in an economic recovery. [More on retail.]

Vanguard Consumer Discretionary (NYSEArca: VCR): up 48.4% year-to-date

Fixed-income ETFs benefited from the record inflows into securities. Investors wary of long-term Treasuries and interest rate risks choose to invest in short-term bonds and Treasury inflation-protected securities (TIPs). Dan Dolan, director of wealth management strategies at Select Sector SPDRs, warns that inflows into bond ETFs could come to a halt as yields dry up. Those investors may then turn to equities instead. [More on bond ETFs.]