ETF Trends
ETF Trends

While a consensus outlook for 2009 is full of gloom, an optimistic few are predicting global stocks and exchange traded funds (ETFs) will withstand the recession or even surge in 2009.

With the prospect of cheap valuations and government efforts to restore confidence in financial systems, investors may once again be enticed back into equities next year, reports Alexis Xydias for Bloomberg.

David Bianco, a New York-based strategist, predicts the Standard & Poor’s 500 Index may surge 53% to 1,300 after slowing nearly 42% so far this year. The ETF that tracks the S&P 500, SPDR S&P 500 (SPY), is currently down 38% year-to-date.

ETF SPY performance

The United Kingdom’s FTSE 100 Index, tracked by the ETF NETS FTSE 100 (LDN), currently down 46.6% since its April 10 inception, is predicted to increase by 41% from its current level in 2009.

ETF LDN Performance

Those on Wall Street who are more bearish, such as Citigroup Inc.’s (C) chief U.S. equity strategist Tobias  Levkovich, reduced their 2009 forecast for the S&P  500 from 1,300 to 1,000. While Morgan Stanley (MS) claim European stocks are likely to be unchanged in 2009.

After $1 trillion or so in financial/company losses and writedowns froze credit markets, MSCI World Index (CWI) has dropped 50% year-to-date with most global economies suffering pain.

ETF CWI performance

But there is good news for Latin American Indexes, tracked by iShares Latin America 40 Index Fund (ILF) currently down 55.4% percent year-to-date. Latin America is forecast to rise in 2009.

ETF ILF performance

Remember, these are just predictions. We’ll be seeing a lot of these in the coming weeks, and it’s important to remember to stick to your strategy. After all, who could have predicted the events of this year? Wait until the trend officially emerges before thinking about where you’ll put your money. Read our trend-following report to learn how.

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.