6 ETFs that Whipped Mutual Funds in 2008 | ETF Trends

2008 was a crumbling year for securities, mutual funds and some exchange traded funds (ETFs).  However, there were six ETFs that beat up mutual funds and the overall market in 2008.

Here is a list of them:

  • UltraShort Semiconductor ProShares (SSG), which gained a whopping 113%
  • UltraShort Technology ProShares (REW), which was up 98%
  • UltraShort Russell MidCap Gr ProShares (SDK), which was up 96%
  • UltraShort Russell 1000 Growth ProShares (SFK), which was up 83%
  • UltraShort Individuals ProShares (SIJ), which was up 80%
  • UltrsShort QQQ ProShares (QID), which was up 77%

Not surprisingly, all of these ETFs took a short position, in essence betting against the market. Among actively managed mutual funds, several short ones also did well, but none of them could touch the triple-digit returns of SSG.

This doesn’t mean that all ETFs performed well. Last year’s market left no sector untouched, and even the safe havens took a beating.  Some ETFs were down sharply, many in high double digits.

Another thing to keep in mind is that ETFs generally have larger Sharpe Ratios then mutual funds.  The standard deviation for mutual funds is 13%, meaning that most funds generated returns between negative 51% and negative 25%.  The standard deviation for ETFs is 27%, meaning that most ETFs generated returns between negative 65% and negative 11%, states Max Rottersman, principle at Hanover Tech Group for Index Universe.

It’s virtually impossible to predict the future and that’s why investors should educate themselves on all of their investments and make sure they don’t get taken to the cleaners.  If you are still worried about your portfolio, take a look at our ETF Analyzer to do some analysis and homework. And if you’re still in high-priced mutual funds, think about switching over to an ETF in a similar asset class.

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.