Category: Blog

Content written by The Deep Value ETF Accumulator, aka Micah McDonald.

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Is the Mexico ETF Worth the Risk? (EWW) 1.3

  • The iShares MSCI Mexico ETF (EWW) has been available for 23 years
  • EWW has spent most of that time outperforming US Large Cap Blend equities, but currently trails the S&P 500 by 0.79% CAGR
  • The Mexican economy is the 15th largest by GDP
  • Mexico is the 10th largest country by population
  • Is the Mexico ETF (EWW) worth the risk?

EWW vs S&P 500 Index Fund: May 1996 – August 2019


Source: https://www.portfoliovisualizer.com/

EWW vs SPY: March 18, 1996 – September 13, 2019

Source: https://www.koyfin.com/home Continue reading “Is the Mexico ETF Worth the Risk? (EWW) 1.3”

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4 Best Long-Term Performance Health Sector ETFs 1.3

Is the Health Sector a good place to invest?

The Health Care Select Sector SPDR® Fund (XLV) is the oldest and largest Health Sector ETF available. Its’ inception date was on December 16, 1998.

XLV vs S&P 500 index fund: January 1999 – August 2019

Source: https://www.portfoliovisualizer.com/

XLV vs SPY: December 22, 1998 – September 6, 2019

Source: https://www.koyfin.com/home Continue reading “4 Best Long-Term Performance Health Sector ETFs 1.3”

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4 Best Long Term Performance China Equity ETFs 1.3

I normally pick the oldest ETF in a category to show how that category has performed over a long period of time. This time I have chosen the second oldest China ETF, the Invesco Golden Dragon China ETF (PGJ), to display long term performance. The reasoning behind this is that PGJ is only 2 months younger that the iShares China Large-Cap ETF (FXI), and PGJ has superior long term performance to FXI.

Is China still worth the investment risk?

PGJ vs S&P 500 index fund: January 2005 – August 2019

Source: https://www.portfoliovisualizer.com/

PGJ vs SPY: December 9, 2004 – August 30, 2019

Source: https://www.koyfin.com/home

Continue reading “4 Best Long Term Performance China Equity ETFs 1.3”

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Best Long-Term Performance U.S. Mid Cap Growth ETFs 1.2

Does the U.S. Mid Cap Growth asset class have a history of good long-term returns?

U.S. Mid Cap Growth vs U.S. Large Cap Blend (S&P 500): January 1972 – August 2019

Source: https://www.portfoliovisualizer.com/

The oldest available U.S. Mid Cap Growth ETF is the iShares S&P Mid-Cap 400 Growth ETF (IJK). It’s inception date was July 24, 2000. Since inception, IJK has outperformed an S&P 500 index fund by 1.76% CAGR.

IJK vs S&P 500 index fund: August 2000 – July 2019

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance U.S. Mid Cap Growth ETFs 1.2”

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Best Long-Term Performance Consumer Discretionary Sector ETFs (Consumer Cyclical) 1.2

Does the Consumer Discretionary sector have a history of good long-term returns?

The oldest available Consumer Discretionary sector ETF is the Consumer Discretionary Select Sector SPDR® Fund (XLY). Its’ inception date was 12/16/1998.

XLY vs S&P500 index fund: January 1999 – June 2019

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance Consumer Discretionary Sector ETFs (Consumer Cyclical) 1.2”

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The Deep Value ETF Accumulator Interview with Mr. SR from the Semi-Retire Plan Website

Micah McDonald from Deep Value ETF Accumulator

My name is Micah McDonald and I run the Deep Value ETF Accumulator blog. I retired from a 22-year Air Force career in 2008, worked the Alaska North Slope oilfields from 2008-2017 and now work as an electronics technician in remote locations in Alaska. I’m married to Gina and we have 7 kids and many grandchildren. You might consider me semi-retired now because I only work about 7 months a year. I plan to work under 6 months a year in about 3 years from now when we will be empty nesters.

Deep value and market timing

Mr. SR (MSR): I’m very interested in the premise of your site, Deep Value ETF Accumulator. I’m a big fan of the low expense aspect of ETFs and my wife and I use them in our IRAs and Roth IRAs. Can you explain what “deep value” means?

Micah McDonald (MM): To me, Deep Value means an asset (or ETF) that has historically performed well has fallen out-of-favor in the eyes of the market. There is no specific valuation that I focus on.

I have found 32 ETFs that have good long-term performance that I want to own. I use Morningstar portfolios to rank them by how much they have fallen from their 52-week high price. I accumulate shares once a week, so I buy an ETF that is near the top of the list or fallen furthest from it’s 52-week high price. The further an ETF has fallen in price, the deeper the value. Continue reading “The Deep Value ETF Accumulator Interview with Mr. SR from the Semi-Retire Plan Website”

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Best Long-Term Performance Technology ETFs 1.2

Here is the 20+ year performance of the oldest available technology ETF, The Technology Select Sector SPDR® Fund (XLK).

XLK vs S&P 500 index fund: January 1999 – June 2019

Source: https://www.portfoliovisualizer.com/

XLK vs SPY: December 22, 1998 – July 21, 2019

Source: https://www.koyfin.com/home

There are 67 ETFs available in the Technology Sector, 19 of these have inception dates prior to July 21, 2009. Let’s see how they rank.

Source: https://www.morningstar.com/

Continue reading “Best Long-Term Performance Technology ETFs 1.2”

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The Asia / Pacific ETF With A Long History Of Excellent Returns (EPP) 1.2

The iShares MSCI Pacific ex Japan ETF (EPP) seeks to track the investment results of an index composed of Pacific region developed market equities, excluding Japan.

Why EPP?

1. Exposure to companies in Australia, Hong Kong, New Zealand, and Singapore

2. Targeted access to a specific subset of Asia Pacific stocks

3. Use to diversify internationally and express a regional view

4. Excellent long-term returns

EPP vs S&P 500 index fund:

Source: https://www.portfoliovisualizer.com/

Continue reading “The Asia / Pacific ETF With A Long History Of Excellent Returns (EPP) 1.2”

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2019 H1 Semi-Annual Performance Report – The Deep Value ETF Accumulator

Welcome to my 5th installment of semi-annual reports. The first half of this year has been an amazing follow-up to the last quarter of 2018. Most markets are hitting all-time-highs and so are most investor’s portfolios. Check out what Mr. Charlie Bilello posted on Twitter just a few days ago. Now that’s a banner half year report.

“What gets measured, gets managed” So, why do we measure performance? Most investors want to get a good return on their investments, so there needs to be a benchmark and a measurement to know if they are getting a good return. I will take that one step further and say that most portfolio managers are looking to produce portfolios with good risk-adjusted performance. For example, a portfolio consisting of 60%/40% equities and fixed income should be compared to a similar portfolio, not a portfolio of 100% growth stocks. I have 3 main reasons that I track performance. 1. I run a blog dedicated to ETF investing and I expect that some people who read it want to know how well or poorly my strategy works. 2. I personally want to know if my strategy is worth continuing to pursue. 3. My wife wants to know if the time and effort I spend playing with my blog and researching investments is a good use of my time.

Continue reading “2019 H1 Semi-Annual Performance Report – The Deep Value ETF Accumulator”

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Best Long-Term Performance Trading – Leveraged Equity ETFs (2X Only) 1.2

WARNING!  Leveraged ETFs comprise a high degree of financial risk. Please consult a professional investment advisor before investing in any leveraged exchange traded product.

The Deep Value ETF Accumulator Rankings for Trading – Leveraged Equity ETFs:

Source: https://www.morningstar.com/
Continue reading “Best Long-Term Performance Trading – Leveraged Equity ETFs (2X Only) 1.2”

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Dog Owners, Contain Your Dogs!

FYI: This post has nothing to do with investing. Just something that was on mind.

Dog Owners, Please Contain Your Dogs

I like to jog and walk in your neighborhood. But I fear your dog, and someone or your dog is going to get hurt. I am not threatening you or your dog with this post; I’m just making you aware of a few facts. Sometimes I jog or take walks with a hiking stick, a rock, bear spray or other personal protection devices. Yep, that’s me, the old scruffy looking guy with the ugly blue running shoes. It has gotten to the point that I now fear your dog more than I fear being trampled by a moose, mulled by a bear, clowns in sewers, perverts in white vans, and teenagers texting and driving on my side of the street. And please don’t think that because you own a nice little schnauzer or a gentle retriever that my fear is any less than when I run into a pit bull. This post is a warning about a few different outcomes that may happen, when and if your dog comes at me. I’m an old grumpy military vet and if my mind is overwhelmed with fear for my safety, I may act irrationally. Remember, I’m usually carrying something to defend myself. You may have heard the term, fight or flight. Once again, I’m old, I jog slow, and walk slower. I’m not going to outrun your dog, even your basset hound. I will fight. I don’t want to hurt your dog, but someone is going down in this situation, and I don’t plan for it to be me. I will punch, kick, stab, spray or whatever it takes to protect myself. Not only am I a vet, but I’m also a grandpa. And, just like lots of other grandpas, I like to take walks with my granddaughter. You might have seen us walking in your neighborhood, I’m the grumpy looking one with the camo pants and worn out desert boots, she’s the cute one with a pretty sundress and white sandals. When her and I take walks, things are just peachy, if we don’t run into your dog. I’ll let you know; your dog will not come away unscathed if it comes near my granddaughter. Either your dog or I are going down. By the way, the granddaughter knows how to use my smartphone. She knows how to dial 911 and my lawyer. I’m not saying any of this because I don’t like dogs. I do like dogs. My wife has 2 schnauzers and I even like them, sometimes. We have a yard but no fence. We keep our dogs contained to the yard with radio collars, but sometimes the batteries go dead. At this point our dogs could end up in the road. If our dogs get hit by a car, this would be our fault for not containing them properly, and probably not the driver of the vehicle. So, if your dog comes at me, or my granddaughter, and something bad happens to your dog, the fault will be on you, the dog owner. I’ve checked the law on this one, and it’s clear, so long as I’m not trespassing on your property, I will not be responsible for the outcome of an altercation with your dog. Again, this is not a threat. This is as simple as saying, don’t let your dog play in the street because it might get hit by a car. Please contain your dogs to your property, for your own dogs’ sake and mine.

Thanks for reading the ramblings of an old slow jogger.

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Best Long-Term Performance Diversified Emerging Markets ETFs 1.2

  • The largest and one of the oldest Diversified Emerging Markets ETFs has outperformed an S&P 500 index fund by 0.95% CAGR over the last 16 years
  • One older Emerging Markets index mutual fund has outperformed an S&P 500 index fund by 2.57% CAGR over the last 20 years
  • The Emerging Markets asset class has been the #1 or #2 best performing equity asset class in 7 of the last 15 years
  • Emerging Market equities are generally riskier and more volatile.
  • Diversified Emerging Markets ETFs can help investor diversify into these markets with less risk
  • There are 79 ETFs available in the Morningstar category “Diversified Emerging Markets”. 12 of these funds have been available for 10 years or longer

The iShares MSCI Emerging Markets ETF (EEM) is the largest and one of the oldest available ETFs in the Emerging Markets asset class. It was launched on April 7, 2003. Since that time, EEM has had a compounded rate of return of 10.39%. An S&P 500 index fund returned 9.44% CAGR over the same period. This outperformance came with a price though, and that price is called volatility. In the case of EEM, it’s standard deviation (a measure of volatility) was 21.97% while the S&P 500 was only 13.38% (lower mean less volatility). Other ways to demonstrate how this volatility (risk) relates to performance (reward) are the Sharpe and Sortino ratios. Typically, the higher these ratios, the better the risk vs reward ratio. In the chart below, the S&P 500 funds’ Sharpe & Sortino ratios are both higher than EEM. So, with all this additional risk, why should long-term investors consider allocating part of their equity portfolio to Diversified Emerging Markets? My answer is diversification. Diversification has oft been quoted as the “only free lunch in investing”. As a long-term investor and an investment blogger, I have made it my mission to find and invest in as many different equity asset classes as possible without degrading long-term performance. Diversified Emerging Market funds can be  a useful component in a worldwide equity portfolio because they have the potential to lift long-term performance while simultaneously reducing overall risk. The risk reduction can be found in this asset class’ correlation to U.S. Markets. Once again, referring to the chart below, this asset class has a correlation to U.S. Markets of 0.79. This is a favorable number, because the lower the number, the lower the correlation to U.S. Markets, so long as the asset class does not perform poorly long-term.

EEM vs S&P 500 index fund: May 2003 – March 2019

Source: https://www.portfoliovisualizer.com/

EEM vs SPY: April 11, 2003 – April 21, 2019

Source: https://www.koyfin.com/home

Continue reading “Best Long-Term Performance Diversified Emerging Markets ETFs 1.2”

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Is The South Africa ETF Worth The Risk? (EZA) 1.2

  • This single-country emerging market fund has compounded at 9.38%/year over the last 16 years
  • EZA has a low correlation coefficient to U.S. Markets of 0.65
  • Emerging markets are volatile. EZA is even more volatile than diversified emerging market funds
  • EZA, a prime example for the “No Pain, No Premium” theory
  • EZA has a current 12-month trailing yield of 3.67%

EZA vs S&P 500 index fund: March 2003 – March 2019

Source: https://www.portfoliovisualizer.com/

EZA vs SPY: February 7, 2003 – April 14, 2019

Source: https://www.koyfin.com/home

Continue reading “Is The South Africa ETF Worth The Risk? (EZA) 1.2”

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Best Long-Term Performance Natural Resources Sector ETFs 1.2

  • The Natural Resource sector, also know as the Basic Materials sector has provide outstanding performance over the last 20 years
  • The oldest ETF in this sector has outperformed an S&P 500 index fund by 1.02% CAGR since its’ inception date
  • There are currently 31 ETFs available in the Natural Resources category. 14 of these ETFs have been available for 10 years or longer

Investopedia defines the Natural Resources sector this way: The basic materials sector is a category of stocks for companies involved in the discovery, development, and processing of raw materials. The sector includes companies engaged in mining and metal refining, chemical products, and forestry products. This sector has performed very well over the last 20 years. The Materials Select Sector SPDR® Fund (XLB) has an inception date of 12/16/1998. XLB is the oldest available ETF in this category. Since it’s inception date, it has outperformed an S&P 500 index fund by 1.02% CAGR. That’s a 78.47% greater gain in XLB than in the SPY ETF over 20 years. (See charts below)

XLB vs S&P 500 index fund: January 1999 – February 2019

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance Natural Resources Sector ETFs 1.2”

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Best Long-Term Performance Miscellaneous Sector ETFs 1.2

So, what is a Miscellaneous Sector ETF? Here’s how Morningstar defines this sector: “Miscellaneous sector portfolios invest in specific sectors that do not fit into any of Morningstar’s existing sector categories and for which not enough funds exist to merit the creation of a separate category.” This category mostly contains ETFs that specialize in alternative energy, clean technology and water related companies. Some of the newer ETFs in this category are focused on new or exponential technologies. There are currently 25 ETFs in this category. Fourteen of these ETFs have been available for 10 years or longer. These older 14 ETFs will be the focus of this article.

The oldest ETF in the Miscellaneous Sector category is the Invesco WilderHill Clean Energy ETF (PBW). As with most of the ETFs in this category, PBW has not performed very well vs an S&P 500 index fund. The ETFs that are focused on water related companies have done well, but the alternative energy ETFs have struggled.

PBW vs S&P 500 index fund: April 2005 – February 2019

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance Miscellaneous Sector ETFs 1.2”

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Best Long-Term Performance U.S. Large Cap Growth ETFs 1.2

The long-term performance of the U.S. Large Cap Growth asset class is on par with U.S. Large Cap Blend (aka S&P 500), ± 0.25% CAGR

The oldest U.S. Large Cap Growth ETF has outperformed an S&P 500 index fund by 1.00% CAGR over the last 20 years

There are currently 52 ETFs available in the Morningstar Large Cap Growth category. 15 of these funds have been available for 10 years or longer.

U.S. Large Cap Growth vs U.S. Large Cap Blend (aka S&P 500): January 1972 – February 2019

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance U.S. Large Cap Growth ETFs 1.2”

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Best Long-Term Performance U.S. Large Cap Blend ETFs 1.2

  • The U.S. Large Cap Blend asset class has generated a compounded annual growth rate (CAGR) of 10.15% over the last 47 years
  • The U.S. Large Cap Blend category is the most popular equity asset class
  • There are 150 ETFs available in this asset class
  • Of those 150 ETFs 27 have been available for 10-years or longer

U.S. Large Cap Blend: January 1972 – January 2019

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance U.S. Large Cap Blend ETFs 1.2”

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Best Long-Term Performance International Large Cap Value ETFs 1.2

  • The International Large Cap Value asset class has been a good place to invest for long-term investors wishing to invest beyond the U.S.
  • There are currently 38 ETFs available in the Morningstar Foreign Large Value category
  • Twelve of these Foreign Large Value funds have been available for 10 years or longer

The International Large Cap Value asset class has been around much longer than ETFs have been available. This asset class is typically underutilized in most American’s equity portfolios. That is unfortunate because International Large Cap Value stocks tend to garner a long-term risk premium over growth stocks, just as U.S. Large Cap Value stocks do. This asset class has done poorly vs a typical S&P 500 fund since it’s availability as an ETF, but when looking back further than 2002, this asset class has produced superior returns over very long periods. Index Fund Advisors is an excellent website to get a long-term view of the performance of many asset classes.

Continue reading “Best Long-Term Performance International Large Cap Value ETFs 1.2”

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Best Long-Term Performance U.S. Mid Cap Blend ETFs 1.2

  • The U.S. Mid Cap Blend asset class has been one of the most profitable equity asset classes for over 46 years, outperforming the S&P 500 by 1.62% CAGR.
  • The oldest available Mid Cap Blend ETF has outperformed an S&P 500 index fund by 1.72% CAGR over the last 23 years
  • There are currently 41 ETFs available in the Mid Cap Blend Morningstar category. Sixteen of these ETFs have been available for 10 years or longer
  • Nine of these older ETFs have outperformed an S&P 500 index fund since their inception dates
  • Most ETFs in this asset class offer massive diversification in size of companies, broad sector exposure, and include both value & growth stocks
  • The middle of the stock market might just be the best place to invest

U.S. Mid Cap Blend vs U.S. Large Cap Blend (aka S&P 500): January 1972 – December 2018

Source: https://www.portfoliovisualizer.com/
Continue reading “Best Long-Term Performance U.S. Mid Cap Blend ETFs 1.2”

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2018 The Year Mr. Market Took -3.5%, While This Investor Grew Net Worth +13.7%

No, this isn’t an exercise in fuzzy math. In fact, most investors who are in the accumulation phase of their investing journey probably saw similar results. So, let’s see how this investor was able to grow his family’s net worth when Mr. Market dealt him a bad hand.
Continue reading “2018 The Year Mr. Market Took -3.5%, While This Investor Grew Net Worth +13.7%”

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Is the Thailand ETF Worth the Risk? (THD) 1.1

  • The iShares MSCI Thailand ETF (THD) is a broadly diversified single country emerging market ETF
  • THD has a good but relatively short performance history; inception date March 26, 2008
  • Thailand is still considered an emerging market economy, but it has consistently improved living and economic conditions since the 1980’s
  • Thailand is the 50th largest country and the 21st most populous
  • Thailand is currently ranked 20th by GDP
  • Thailand is ranked 53rd in the Heritage.org Economic Freedom index

THD vs SPY: March 28, 2008 – January 6, 2019

Source: https://www.koyfin.com/home

Continue reading “Is the Thailand ETF Worth the Risk? (THD) 1.1”

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How to lose 80% in an investment…

I recently shared this on the Deep Value ETF Investors Facebook group and I thought is was worth sharing here also:

How to lose 80% in an investment… Thank you to E.G. for prompting the thought to examine some of our investing failures. Back in 2013 & 2014 I was frequently trading between UWTI (Bull) & DWTI (Bear) (3x leveraged oil futures ETNs). I thought I was smart because I was making lots of money. Oil was pretty steady between $80 to $110/barrel. So I’d buy DWTI when oil prices went up and sell it as oil prices went down. And I’d buy UWTI when oil prices dropped and sell it when oil went back up. I thought “this is so easy, why doesn’t everyone do this?” Then, later in the 2nd half of 2014 oil prices fell big time and I continued to buy UWTI every 5% drop in oil (or 15% drop in UWTI). Eventually I sank over $30k into this ETN from 2014 through 2016. Towards the end of 2016, it started to look like I might make it out of this horrible investment with a small loss or maybe even break-even. But, no! Credit Suisse decided to close these ETNs and I was forced to close my position with an approximate 80% loss in Nov 2016. I went looking for some records to show this, but Scottrade has since been bought out by TDA, so I only have one record showing my last transaction with UWTI. That transaction is attached but it only represents a portion of my loss because I was doing the same thing in another account. All told, I lost over $25k trading UWTI. Not looking for pity, just sharing my experience so that hopefully somebody learns from my mistakes. Stay diversified friends and by all means either don’t use leverage or use it with extreme caution. Micah

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2018 Annual Performance Report – The Deep Value ETF Accumulator

“What gets measured, gets managed”

The Deep Value ETF Accumulator 2018 Annual Performance Report

 

 

 

I’ll be the first to admit, 2018 was a tough year to make money in the stock market. But, if you are in the accumulation phase of your investing journey, take heart, most of your purchases of equities last year were probably at great prices. This may not make you feel any better about your year-end account balances, but if your account simply returns to par in 2019, you’ll probably be up substantially in the new year.

Continue reading “2018 Annual Performance Report – The Deep Value ETF Accumulator”

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Best Long-Term Performance U.S. Small Cap Blend ETFs 1.2

  • The U.S. Small Cap Blend asset class has been one of the most profitable equity asset classes for over 45 years
  • The oldest available Small Cap Blend ETF has outperformed an S&P 500 index fund by a whopping 4.45% CAGR over the last 18 years
  • There are currently 42 ETFs available in the Small Cap Blend Morningstar category. Eleven of these ETFs have been available for 10 years or longer
  • Five of these older ETFs have outperformed an S&P 500 index fund since their inception dates

U.S. Small Cap Blend vs U.S. Large Cap Blend (aka S&P 500)

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance U.S. Small Cap Blend ETFs 1.2”

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Best Long-Term Performance Industrials Sector ETFs 1.2

  • The oldest available Industrials sector ETF has outperformed an S&P 500 index fund by 1.45% CAGR over the last 20 years
  • There are currently 23 Industrials sector ETFs available; 13 of these are 10 years old or older
  • The best performing Industrials sector ETF has outperformed an S&P 500 index fund by 4.41% CAGR over the last 12 years

The Industrial Select Sector SPDR® Fund (XLI) is the oldest available Industrials sector ETF. Its’ inception date was December 16, 1998. Since inception, this ETF has outperformed an S&P 500 index fund by 1.45% CAGR. In the chart below, you can see the benefit of this outperformance where a $10k investment in XLI grew to $42k while a $10k investment in the S&P 500 only grew to $32k. This sector ETF also has a market correlation of 0.88, which can be useful when building a diversified equity portfolio.

XLI vs S&P 500 index fund: January 1999 – November 2018

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance Industrials Sector ETFs 1.2”

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Best Long-Term Performance Financial Sector ETFs 1.1

  • The oldest Financial sector ETF available has underperformed an S&P 500 index fund by 2.30% CAGR over the last 20 years
  • There are currently 32 Financial sector ETFs available; 16 of these are 10 years old or older
  • Why this Deep Value ETF Accumulator does not invest in Financial sector ETFs

The Financial Select Sector SPDR® Fund (XLF) is the oldest available Financial sector ETF. Its’ inception date was December 16, 1998. The Great Financial Crises of 2007-2009 decimated this sector of the market. Because the Financials were the most severely wounded sector, the associated ETFs have failed to keep up with the returns of the broad U.S. Markets or any other sector of the market. Therefore, investors will find it difficult to find a “good” Financial sector ETF with a history of great returns. This is why you will see the XLF ETF significantly lagging the S&P 500 in the following charts.

XLF vs S&P 500 index fund: January 1999 – November 2018

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance Financial Sector ETFs 1.1”

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Best Long-Term Performance Utilities Sector ETFs 1.2

  • The oldest available Utilities sector ETF has outperformed an S&P 500 index fund by 0.77% CAGR over the last 20 years
  • The Utilities sector is an excellent portfolio diversifier with an ultra-low US Market correlation of 0.38
  • There are currently 13 Utilities Sector ETFs available; 7 of these have inception dates that are 10 years old or older

XLU vs S&P 500 index fund: January 1999 – November 2018

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance Utilities Sector ETFs 1.2”

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Best Long-Term Performance U.S. Small Cap Growth ETFs 1.2

  • The oldest available U.S. Small Cap Growth ETF has outperformed an S&P 500 index fund by 3.93% CAGR over the last 18 years
  • There are currently 17 ETFs available in the Morningstar category called Small Cap Growth. Seven of these funds have inception dates that are 10 years old or older
  • An allocation to Small Cap Growth in a worldwide equity portfolio can add growth and diversity

The U.S. Small Cap Growth asset class has data readily available going back to 1972. During the last 46 years, this asset class has done very well, but it did trail U.S. Large Cap Blend (S&P 500) by 0.39% CAGR. This should not dissuade investors from this asset class. During shorter periods, such as 5-, 10- or 15-years, Small Cap Growth can and has outperform the S&P 500 significantly.

U.S. Small Cap Growth vs U.S. Large Cap Blend: January 1972 – October 2018

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance U.S. Small Cap Growth ETFs 1.2”

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Best Long-Term Performance Consumer Staples (Defensive) ETFs 1.2

  • The oldest available Consumer Staples ETF has nearly matched the return of an S&P 500 index fund over the last 19 years.
  • Consumer Staples funds tend to have low correlation to broad U.S. Market funds, making a Consumer Staples ETF an excellent diversifier in a worldwide equity portfolio
  • Morningstar has identified 16 ETFs as Consumer Defensive funds. Eight of these funds are 10 years old or older

The Consumer Staples Select Sector SPDR® Fund (XLP) is the oldest available consumer defensive ETF. The inception date for this fund is December 16, 1998. Since that time, this fund has nearly matched the returns of an S&P 500 index fund. While that is not very impressive, it is noteworthy that this fund has a very low correlation to the overall U.S. Markets and it has been less volatile than an S&P 500 index fund.

XLP vs S&P 500 index fund: January 1999 – October 2018

Source: https://www.portfoliovisualizer.com/

Continue reading “Best Long-Term Performance Consumer Staples (Defensive) ETFs 1.2”

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The Excellent Long-Term Performance of The South Korea ETF (EWY) 1.2

  • The iShares MSCI South Korea ETF (EWY) has outperformed an S&P 500 index fund by 1.77% CAGR over the last 18 years
  • EWY is an excellent diversifier in a well constructed all-world equity portfolio with a relatively low correlation to U.S. Markets at 0.75
  • EWY is considered an Emerging Market fund and carries a similar standard deviation of 29.10%

EWY vs S&P 500 index fund: June 2000 – October 2018

Source: https://www.portfoliovisualizer.com/

Continue reading “The Excellent Long-Term Performance of The South Korea ETF (EWY) 1.2”

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Best Long-Term Performance U.S. Large Cap Value ETFs 1.2

  • The U.S. Large Cap Value asset class has outperformed the U.S. Large Cap Blend asset class by 1.01% CAGR over the past 46 years
  • The oldest U.S. Large Cap Value ETF has outperformed an S&P 500 index fund by 1.03% CAGR over the past 20 years
  • There are currently 92 ETFs available in the Morningstar category Large Value. 23 of those ETFs are ten years old or older

The Large Cap Value asset class has a long history of superior returns when compared to the Large Cap Blend (or the S&P 500) asset class.

U.S. Large Cap Value vs U.S. Large Cap Blend: January 1972 – September 2018

Source: https://www.portfoliovisualizer.com/

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The Brazil ETF, a Risk Worth Taking? (EWZ) 1.2

Over the last 18 years, the iShares MSCI Brazil ETF (EWZ) and an S&P 500 index fund have both compounded at a rate of 6%. But, EWZ has experienced 2 ½ times more volatility during that time. So, why bother investing outside of the United States or a basic S&P 500 fund? I believe the best reason is correlation. The EWZ ETF has a relatively low correlation coefficient of 0.64. This correlation to U.S. Markets is very useful in building a worldwide equity portfolio that consistently has some components going up while others are going down. This volatility is also a gift to those who are willing to wait for deep downturns to buy shares. In the case of the Brazil ETF, that volatility will arise just about every election cycle.

The chart below makes EWZ look very risky, and it is. In fact, the standard deviation of EWZ is 35%, while it is only 14% in an S&P 500 index fund. Bottom line, if you don’t like volatility in your portfolio, a single country ETF, like EWZ, probably isn’t for you. On the other hand, investors who understand the benefits of volatility and arbitrage will typically see opportunity when observing a chart like this.

EWZ vs S&P 500 index fund: August 2000 – September 2018

Source: https://www.portfoliovisualizer.com/

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Best Long-Term Performance U.S. Small Cap Value ETFs 1.2

  • The Small Cap Value asset class has outperformed the Large Cap Blend asset class by 3.91% CAGR over the last 46 years
  • The oldest available U.S. Small Cap Blend ETF has outperformed an S&P 500 index fund by 4.77% CAGR over the last 18 years
  • There are currently 22 ETFs available in the Morningstar category Small Cap Value. 11 of those funds are 10 years old or older

U.S. Small Cap Value vs U.S. Large Cap Blend: Jan. 1972 – Sep. 2018

Source: https://www.portfoliovisualizer.com/

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Best Long-Term Performance Energy Sector ETFs 1.2

  • The oldest Energy Sector ETF available outperformed an S&P 500 index fund by 1.80% CAGR over the last 19 years
  • The Energy industry has relatively low correlation to the broad U.S. Equity market. Energy’s correlation coefficient has been 0.61 for nearly 20 years
  • There are 26 Energy ETFs available. 15 of those funds are 10 years old or older

Here’s how the oldest Energy ETF, Energy Select Sector SPDR® Fund (XLE), has performed since its’ inception date of December 16, 1998. Take note that the U.S. Market correlation is 0.61 for XLE while the S&P 500 is 0.99.

XLE vs S&P 500: January 1999 – September 2018

Source: https://www.portfoliovisualizer.com/

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Best Long-Term Performance Real Estate ETFs 1.2

  • The oldest available Real Estate ETF has outperformed an S&P 500 index fund by 3.49% CAGR over the last 18 years.
  • The REIT asset class has had great returns since the 1970’s when this asset class started to be tracked.
  • Real Estate funds have been excellent low correlation asset diversifiers for investor’s portfolios
  • Evidence shows us that REIT funds can outperform owning investment real estate directly
  • There are currently 27 ETFs that fall under the Morningstar Category called Real Estate. 8 of those ETFs are 10 years old or older.

IYR vs S&P 500: July 2000 – September 2018

Source: https://www.portfoliovisualizer.com/

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ALWAYS BUY THE DIP! Wealth Accumulation Done Well

Are you in the Accumulation Phase of your investment plan? A Forbes article defined this investment phase this way: “PHASE I: Accumulation: This period begins when you enter the workforce and begin setting aside funds for later in your life, and ends when you actually retire.” If this applies to you, then you will want to see why it’s important to ALWAYS BUY THE DIP! In this article I will demonstrate how you can build wealth when you ALWAYS BUY THE DIP!

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The Mexico ETF – A Single Country Fund With A Good 22-Year Track Record (EWW) 1.2

  • A single country fund with a good 22-year track record
  • An emerging market ETF that has kept up with the returns of an S&P 500 index fund for over 2 decades
  • This fund provides a dividend that is currently 24% higher than the most popular S&P 500 ETF
  • The iShares MSCI Mexico ETF (EWW) has a relatively low correlation coefficient to U.S. Markets of 0.73

EWW vs S&P 500 index fund: May 1996 through September 2018

Source: https://www.portfoliovisualizer.com/

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Best Long-Term Performance Health Sector ETFs 1.2

  • The oldest Health Sector ETF has outperformed an S&P 500 index fund by 1.90% CAGR over the last 19 years. This Health Sector ETF has also experienced less volatility than an S&P 500 index fund.
  • There are currently 35 ETFs in the Morningstar Category called Health. 16 of these funds are 10 years old or older.
  • The top performing Health Sector ETF has outperformed an S&P 500 index fund by 8.98% CAGR over the last 12 years.

Health Care Select Sector SPDR® Fund (XLV) vs S&P 500 index fund: January 1999 – September 2018

Source: https://www.portfoliovisualizer.com/

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Best Long-Term Performance U.S. Mid Cap Growth ETFs 1.1

  • The U.S. Mid Cap Growth asset class has produced 10.39% CAGR over the last 46 years.
  • The oldest U.S. Mid Cap Growth ETF has outperformed an S&P 500 index fund by 2.25% CAGR over the last 18 years.
  • There are currently 28 ETFs in the Morningstar Category called Mid Cap Growth. 11 of these funds are 10 years old or older.

U.S. Mid Cap Growth vs U.S. Large Cap Blend: January 1972 through August 2018

Source: https://www.portfoliovisualizer.com/

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Best Long-Term Performance Technology ETFs 1.1

How can a value investor participate in the growth stocks found in most Technology Sector ETFs? Wait! That’s right, wait for a sale. The oldest ETF in this sector is the Technology Select Sector SPDR® Fund (XLK). Unfortunately, history has not been kind to this sector ETF due to its’ inception date being near the eve of the DOT COM Market Crash. As you will see in the following chart, XLK has trailed an S&P 500 index fund by 0.81 CAGR with nearly double the volatility. That’s not what most long-term value investors are looking to add to their portfolio. But, there is a way; and that way is waiting. Wait for a significant drop in this sector and then start a position in your chosen Technology fund. What is significant? For me, that’s about a 10% decline, or more. Personally, I’m in no hurry to own a technology fund, but when this sector has a steep decline, I will begin accumulating shares of my chosen tech fund.

XLK vs S&P500: January 1999 – August 2018

Source: https://www.portfoliovisualizer.com/

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Own BABA BIDU BZUN CTRP EDU INFY JD MOMO WB WUBA YUMC YY With 1 ETF!

That’s right folks, you can own Alibaba, JD.com, Yum China, MOMO Inc., Infosys, Ctrip, Baidu, New Oriental Education, 58.com, Baozun, Weibo, YY Inc. and other Chinese & Indian growth stocks without single stock exposure risk.  First Trust introduced the First Trust Chindia ETF (FNI) in May 2007, but it has remained under the radar of most investors.

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Best Long-Term Performance U.S. Mid Cap Value ETFs 1.1

Summary:

  • U.S. Mid Cap Value Equities are an underutilized asset class
  • U.S. Mid Cap Value Equities have compounded at a rate of 13.2% since 1972, while large cap blend equities have compounded at 10.3% during the same time-frame.
  • The oldest U.S. Mid Cap Value ETF compounded at 10.7% since August 2000, while an S&P 500 index fund compounded at 5.8% during that time.

The U.S. Mid Cap Value asset class is an underappreciated and underutilized part of most people’s equity portfolios. This is understandable since investors can cover this section of the market with a myriad of other choices. If investors choose to invest in a Mid Cap Blend fund, about 50% of that fund will include mid cap value stocks. Investors could also choose a small and/or large cap value ETF and about 10% of those funds will be mid cap value companies. Additionally, investors can choose a U.S. Total Market Index fund and about 5% of that fund will be Mid Cap Value companies. All those funds are fine investments, but the U.S. Mid Cap Value index has had such a wonderful long-term track record that it would be wise to consider adding an ETF in this asset class to your equity portfolio.

U.S. Mid Cap Value vs U.S. Large Cap Blend (S&P 500): January 1972 through July 2018

Source: https://www.portfoliovisualizer.com/

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Buy Your Equities Like A Real Estate Investor

In the real estate investment world, you will hear an often repeated catchphrase “You make money when you buy, not when you sell.” I am not a real estate investor, but I understand the sentiment behind this mantra. I’ve often considered the potential of applying this investment strategy to equity fund investments. Why or why can’t this approach be applied to acquiring equity assets? More specifically, I’m talking about buying equity ETFs or mutual funds utilizing similar tactics of successful real estate investors.

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