ETF Trends
ETF Trends

Mark Hulbert reported for the New York Times this weekend that many investment newsletters offering ETF portfolios have fallen short on the performance side.  Mark suggests that:

  • Newsletters’ ETF portfolios may have invested in different asset classes and pursued different investment objectives than did their other portfolios.
  • ETF portfolios may have taken on less risk than the other investments
  • The very advantages of ETFs may be encouraging newsletter editors to make riskier bets.

He’s right, but I think the main reason is most of these ETF portfolios are presented as active portfolios.  This coupled with the fact that most top performing asset classes, sectors and industry groups have had 5-8% corrections along the way; creating short-term sells or "whipsaws" in the portfolios.  Although these sells are meant to reduce risk, they also have been detrimental to the overall performance.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.