Large-cap stocks and companies could be on the verge of a transformation, with regulation under major scrutiny, making exchange traded funds (ETFs) with exposure to a broad range of companies a potentially safer bet.

Despite the fact that the bailout has been approved, the credit crisis is not going to suddenly go away. That said, it is important to note that one of the major large-cap contenders is financials, and mainstays in this group are down for the count. Having been so beaten down this year, the sector stands to deliver strong performance when we finally get our economy back on track.

With credit markets freezing and several large-cap ETFs showing gaps between underlying prices and net asset values in the quarter, a level playing field was lost at times, and value had a comeback over the summer, reports Index Universe staff.

After all of the talk about large-cap growth’s resurgence over the past two years, many ETF momentum investors were rewarded in 2007. But that outperformance reversed in the second quarter and continued to lag other large-cap styles in the last quarter.

Large Cap ETFs:

  • SPDR Dow Jones Wilshire Large Cap ETF (ELR): down 24.1% year-to-date; 15.9% financials
  • SPDR DJ Wilshire Large Cap Value (ELV): down 23.2% year-to-date; 25.3% financials

Large-Cap Exchange Traded Funds (ETFs)

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.