January was the worst month for U.S. equities in history, but there was at least one exchange traded fund (ETF) that delivered a positive return when comparing total markets.
Comparing total market ETFs for January 2009:
- ELEMENTS Benjamin Graham Total Market ETN (BVT): up 6.4%
- iShares Russell 3000 Growth ETF (IWZ): down 5.1%
- Vanguard Total Stock Market (VTI): down 8.1%
- SPDR Total Market (DJW 5000) (TMW): down 8.2%
- iShares Russell 3000 (IWV): down 8.4%
- iShares DJ US Index (IYY): down 8.5%
- iShares S&P 1500 Index (ISI): down 8.9%
- iShares Russell 3000 Value (IWW): down 11.6%
The performance in these funds is pretty tight, but as you narrow down into specific sectors and sub-sectors, investors will begin to notice wider ranges in performance. The variance in one-month returns for the top- and bottom-performing ETFs for each of the 11 size/style boxes ranges from 4.0%, mid-cap growth ETFs, to 28.1%, small-cap value ETFs. In evaluating the core sectors, the difference between top- and bottom-performing funds range from 1.8% in telecom funds to 25.9% in financial ETFs.
The noteworthy aspect of this analysis is that if an investor looks beyond the large-scale total market funds and into the specific sectors, the choice of ETFs start to become more important. A trader should also meticulously examine each ETF within given asset classes and find the one that will closely reflect one’s views of the market.
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.