China outperforms: This is one is sort of accurate, although we may, admittedly, be taking some liberties with this assessment. The iShares China Large-Cap ETF (NYSEArca: FXI) is down 3.3% this year, which is a lot better than the Vanguard FTSE Emerging Markets ETF (NYSESArca: VWO) and the iShares MSCI Emerging Markets ETF (NYSEArca: EEM), though nowhere near the S&P 500.
Funds with substantial allocations to technology and Internet names have been the real winners of the China ETF group in 2013. [This China ETF is Ready to Fly Again]
2013 is the year of the commodity ETF: We right about this one…in the wrong way. The PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC) has now lagged the S&P 500 for five straight years, gold’s bull market ended in staggering fashion and ETFs backed by physical holdings of silver have plunged more than 36%. This will be remembered as a year of infamy for commodities ETFs.
Cyclical sectors outperform: Right on this one. The Consumer Discretionary Select Sector SPDR (NYSEArca: XLY) is battling its health care equivalent to be 2013’s top sector SPDR. The Industrial Select Sector SPDR (NYSEArca: XLI) is now the third-largest sector ETF in the U.S.
Add to that, tech stocks are gradually getting more expensive. These anecdotes could be confirmation that interest rates will keep rising this year because discretionary, industrials and tech are the best-performing sectors in rising rate environments. [Tech Sector P/E Creeps High]
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EEM.