- Slow and steady value and conservative sectors are leading market gains
- RPV was best performing non-leveraged ETF across various Morningstar style categories
- Close behind was RZV, which like RPV, targets companies exhibiting a value characteristic
Since the start of the bull market, we may come to expect growth stocks like biotechnology and technology-sector exchange traded funds would outperform. However, more slow and steady value and conservative sectors led market gains.
According to a ranking of the best ETFs across the various Morningstar style categories since the current bull market started in March 2009, the Guggenheim S&P 500 Pure Value ETF (NYSEArca: RPV) was the best performing non-leveraged ETF, generating an annualized return of 29.82% for the past 7-year period. RPV tracks the S&P 500 but targets companies with a value tilt.
Behind RPV, the Guggenheim S&P Smallcap 600 Pure Value ETF (NYSEArca: RZV) has returned an annualized 28.85% in the same period. RZV, like RPV, targets companies that exhibit the value characteristic but focuses on the smaller companies taken from the S&P SmallCap 600 benchmark.
The Guggenheim S&P Equal Weight Consumer Discretionary ETF (NYSEArca: RCD) returned an average 28.5% over the past seven years. Unlike traditional market cap-weighted index funds, RCD equally weights its component holdings, so its underlying portfolio leans more toward more mid-sized companies.
While investors may not thing that the PowerShares Financial Preferred Portfolio (NYSEArca: PGF) would appear on the list, PGF’s total returns after including yields, helped the ETF generate a 28.27% average annualized return over the period. PGF shows a 5.73% 12-month yield.
The PowerShares NASDAQ Internet Portfolio (NasdaqGS: PNQI), with an average return of 28.09%, may be a tech-focused internet stock ETF, but the fund has also played off the rise in online consumer commerce, or e-commerce.
The PowerShares Dynamic Pharmaceuticals Portfolio (NYSEArca: PJP) has returned an average 27.3% since the financial downturn. PJP takes a smart-beta approach to selecting pharmaceutical components based on price momentum, earnings momentum, quality, management action, and value.
The consumer discretionary sector has been among the leaders in the bull run. The Vanguard Consumer Discretionary ETF (NYSEArca: VCR), SPDR S&P Retail ETF (NYSEArca: XRT) and Consumer Discretionary Select Sector SPDR (NYSEArca: XLY) also appear among the top performing ETFs, returning an average 26.96%, 26.93% and 26.77% over the past seven years, respectively.
Lastly, First Trust NYSE Arca Biotechnology Index Fund (NYSEArca: FBT) returned an average 26.62%. FBT tracks a group of biotech firms involved in recombinant DNA technology, molecular biology, genetic engineering, monoclonal antibody-based technology, lipid/liposome technology, and genomics. The sector has benefited from breakthrough drugs, merger & acquisition activity and the implementation of the Affordable Care Act, or Obamacare.