Throughout the latest market turmoil, diversification helped exchange traded fund (ETF) investors avoid the worst. When the broader market dropped in late July and August, investors in ETFs ducked a lot of the blows that single stock pickers couldn’t. Jesse Emspak for Investor’s Business Daily reports that this was less a result of ETFs’ merits than the average ETF investor’s behavior. That’s because most ETF investors put their money into broader based ETFs instead of the more exotic ones. A couple of ETFs that suffered this summer include:
- iShares Dow Jones U.S. Home Construction (ITB)
This fund concentrates on housing construction, which is bound to wilt when the housing market is depressed. Fortunately, this ETF seemed to have few buyers. It’s assets are about $100 million, according to Morningstar. Currently, it’s down 52.7%.
- iShares FTSE NAREIT Mortgage REITs (REM)
Launched in May, it’s down 29.3% for the last three months. It has about $7 million in total assets.
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.