ETF Trends
ETF Trends

Another year is just about gone. It’s been a year marked mostly by recovery, and exchange traded funds (ETFs) have made a good turnaround from the events of 2008. In a year of growth, which sectors and ETFs were among the standouts?

This year’s markets were topped by emerging markets with the MSCI-EAFE up around 80.2% ending Nov. 30, writes Stacy Schultz for Financial Planning. John Gabriel, ETF analyst at Morningstar, attributes the high growth in emerging economies to a growing middle class, higher domestic demand and decoupling from Western countries. [More on emerging markets.]

  • Shares MSCI Emerging Markets (NYSEArca: EEM): up 67.5% year-to-date


Commodities also saw a good spike on demand from a burgeoning middle class in emerging countries. Some high-performing commodities this year can be seen in gold and coal ETFs. [More on commodities.]

  • SPDR Gold Shares (NYSEArca: GLD): up 24.2% year-to-date

  • Market Vectors Coal ETF (NYSEArca: KOL): up 143.8% year-to-date


The top sector was technology. U.S. investors liked the balance sheets of giant technology corporations and the sector saw good performance and comparable inflows throughout the year. [More on the technology sector.]

  • Technology Select SPDR (NYSEArca: XLK): up 51.5% year-to-date


The second best sector was consumer discretionary, a good indicator for investor confidence in an economic recovery. [More on retail.]

  • Vanguard Consumer Discretionary (NYSEArca: VCR): up 48.4% year-to-date


Fixed-income ETFs benefited from the record inflows into securities. Investors wary of long-term Treasuries and interest rate risks choose to invest in short-term bonds and Treasury inflation-protected securities (TIPs). Dan Dolan, director of wealth management strategies at Select Sector SPDRs, warns that inflows into bond ETFs could come to a halt as yields dry up. Those investors may then turn to equities instead. [More on bond ETFs.]

  • iShares Lehman 1-3 Year Treasury Bond Fund ETF (NYSEArca: SHY): up 0.4% year-to-date; yield is 2.3%

  • iShares Lehman TIPs Bond (NYSEArca: TIP): up 8.9% year-to-date; yield is 3.4%
  • For full disclosure, Tom Lydon’s clients own shares of SHY, TIP, GLD, EEM and XLK.

    Max Chen contributed to this article.

    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.