October ETF Performance Report: Best Month Since 1982 | ETF Trends

Exchange traded funds (ETFs) and the broader equities market enjoyed the largest monthly rally in October since August 1982, even with Monday’s decline, erasing all of its prior losses through 2011 and adding to the month’s “bear killer” legend.

The Dow Jones Industrial Average finished the month up 9.5%. The S&P 500 index gained 10.8% for the month. Meanwhile, the Nasdaq rose 11.1%.

The markets started off the quarter on a pessimistic note, trading at its lowest point for the year on Oct. 3, as investors weighed on the outlook of a potential Greek default. This month, again, reversed the declines from September heading into October, which provides a stark contrast to the start of the two largest crashes of all time, in 1929 and 1987.

Equities quickly gained momentum on higher earnings reports, with three quarters of S&P  companies so far reporting earnings above expectations. Stocks ultimately bounced back after the Eurozone vowed to implement a beefier rescue plan and the U.S. economy posted its highest quarterly expansion this year, allaying fears of a double-dip recession.

The top performers in October include oil and gas related ETFs, up about 25%; steel up 23% and homebuilders up about 20%.

Click here for the full October ETF Performance Report (PDF file). Or visit our ETF Analyzer for current ETF performance.

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.