Category: Blog

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

Posted on

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”

Posted on

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”

Posted on

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”

Posted on

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”

Posted on

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”

Posted on

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”

Posted on

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/

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

Posted on

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/

Continue reading “The Brazil ETF, a Risk Worth Taking? (EWZ) 1.2”

Posted on

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/

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

Posted on

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/

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

Posted on

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/

Continue reading “Best Long-Term Performance Real Estate ETFs 1.2”

Posted on

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!

Continue reading “ALWAYS BUY THE DIP! Wealth Accumulation Done Well”

Posted on

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/

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

Posted on

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/

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

Posted on

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/

Continue reading “Best Long-Term Performance U.S. Mid Cap Growth ETFs 1.1”

Posted on

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/

Continue reading “Best Long-Term Performance Technology ETFs 1.1”

Posted on

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.

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

Posted on

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/

Continue reading “Best Long-Term Performance U.S. Mid Cap Value ETFs 1.1”

Posted on

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.

Continue reading “Buy Your Equities Like A Real Estate Investor”

Posted on

A Pacific/Asia ETF With A Long History Of Excellent Returns (EPP) 1.1

I am a worldwide investor. Some may even say that I am an opportunistic worldwide investor. If you have considered dedicating a portion of your portfolio to nations located in the Pacific/Asia region, you should consider the investment opportunities that are held in the iShares MSCI Pacific ex Japan ETF (EPP). This fund has many things going for it, including:

  • Excellent long-term track record. 10.34% CAGR (compound annual growth rate) from November 2001 through July 2018
  • Great dividend payer. 4.47% twelve-month trailing yield
  • Exposure to Australia, Hong Kong, Singapore and New Zealand
  • Broadly diversified fund. 180 large & mid-cap companies. A blend of growth and value companies.

EPP vs SPY, November 2001 – July 2018

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

Continue reading “A Pacific/Asia ETF With A Long History Of Excellent Returns (EPP) 1.1”

Posted on

Best Long-Term Performance Trading – Leveraged Equity ETFs 1.1

Before I introduce the data on this group of ETFs, I need to point out the fact that leveraged ETFs are designed as trading vehicles and not long-term investments. If you want to know the dangers of these products you need to ‘Google’ this phrase: “leveraged ETF risk”. You will be inundated with article after article with headlines such as:

“Why Leveraged ETFs Are Not a Long-Term Bet”
“Why That Leveraged ETF Is A Bad Idea”
“Why Leveraged ETFs Are Horrible Investments”
“Leveraged ETFs: Why Investors Should Beware”
“Run, Don’t Walk, From Leveraged ETFs”

This sounds scary, right? Well, if you don’t know what you are doing, or you don’t have a strong stomach for volatility, then yes, you should stay away from leveraged ETFs altogether. But, if after reading all the horror stories about leveraged Exchange Traded Products, including my own horror story, you still feel compelled to purchase these investment vehicles, then this article is for you.

As I stated above, you can find many articles that condemn and warn people about using leveraged ETFs. But, if you search long enough and hard enough, you can find articles written by academics that support the use of leverage with mathematics instead of emotion.

Continue reading “Best Long-Term Performance Trading – Leveraged Equity ETFs 1.1”

Posted on

Webull Review – by James Yost

 

Webull Review – by James Yost – 7/25/2018

There are a plethora of resources for the new and experienced trader alike. Today I’m grateful to the Deep Value ETF Accumulator for giving me the chance to spread word about Webull Financial LLC. Some readers may already be familiar with Webull and know that it offers commission-free trades similar to Robinhood. However, Webull’s app actually offers so much more, making it an incredibly feature-rich app, one I would argue outweighs Robinhood in terms of quality resources for a trader. Read on below to find out just what Webull has to offer!

Continue reading “Webull Review – by James Yost”

Posted on

My Experience Signing Up With M1 Finance

My Experience Signing Up With M1 Finance

I originally heard about M1 Finance through my financial mentor, Paul Merriman. Everything I had been told about M1 Finance made me think, finally, somebody has built the perfect platform for the long-term DIY investor. Partial shares, zero trading commissions, one button portfolio rebalancing, the ability to pick your own ETFs without worrying whether they are on the commission-free list, automatic investment of cash; what more could a long-term investor ask for?

Continue reading “My Experience Signing Up With M1 Finance”

Posted on

Best Long-Term Performance Foreign Small/Mid Value ETFs 1.1

If you are considering investing in a Developed Markets Small/Mid Cap ETF, the choices are slim. Currently there are only 8 ETFs in this Morningstar category. Three of these ETFs have been available for ten years or longer. Those 3 ETFs will be the focus of this article. **I have not included IDHQ in the rankings in this article because I believe it is inaccurately labeled a Foreign Small/Mid Value ETF; it should be considered a Foreign Large Cap Growth ETF.**

Continue reading “Best Long-Term Performance Foreign Small/Mid Value ETFs 1.1”

Posted on

H1 2018 Semi-Annual Performance Report – The Deep Value ETF Accumulator

“What gets measured, gets managed.”

So far, 2018 has been a relatively flat year in the broad U.S. Market indexes. There have been lots of ups and downs, but during the first half of this year the S&P 500 has only produced a price gain of 1.67% and a total return of 2.65%, assuming dividends were reinvested. (Source: spdji.com )

Let’s see how the Deep Value ETF Accumulator’s portfolio has faired in this environment.

Continue reading “H1 2018 Semi-Annual Performance Report – The Deep Value ETF Accumulator”

Posted on

Best Long-Term Performance Emerging Markets ETFs 1.1

Have you considered investing some of your portfolio into Emerging Markets? If so, this article is meant to assist investors in finding the best long-term performance ETFs in the Morningstar category called “Diversified Emerging Markets”. While Emerging Markets have had a long history of great returns, there has also been a long dry spell in the last decade in this asset class. Many value investors have already assessed that reversion to the mean will occur in the future for this asset class, but do not know when. Those who choose to invest in Emerging Markets will no doubt have to endure some pain and significant volatility while holding funds dedicated to this market. Short term, we have little evidence in ETFs that Emerging Markets are lucrative investments. But, long-term, there is considerable evidence that Emerging Markets can be great long-term holdings in a worldwide equity portfolio.

ADRE vs S&P 500: December 2002 – June 2018

Source: https://www.portfoliovisualizer.com/backtest-portfolio

Continue reading “Best Long-Term Performance Emerging Markets ETFs 1.1”

Posted on

Best Long-Term Performance Natural Resources (Basic Materials) Sector ETFs 1.1

What is the ‘Basic Materials Sector’? Here’s a good definition of this sector as provided by Investopedia: “The basic materials sector is a category of stocks for companies involved in the discovery, development and processing of raw materials. The sector includes the mining and refining of metals, chemical products and forestry products. The basic materials sector is sensitive to changes in the business cycle. Because companies in this sector supply materials for construction, they depend on a strong economy.

XLB vs S&P 500: January 1999 – April 2018

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

Continue reading “Best Long-Term Performance Natural Resources (Basic Materials) Sector ETFs 1.1”

Posted on

Best Long-Term Performance Miscellaneous Sector ETFs 1.1

What exactly is a Miscellaneous Sector ETF? Morningstar defines this category as: “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.” ETFs that fit into this category contain companies that deal with Clean Energy, Water, Progressive Energy, Clean Technology, Alternative Energy, Uranium & Nuclear Energy, Coal and Solar Energy. The oldest ETF in the Miscellaneous Sector category is the PowerShares WilderHill Clean Energy Portfolio (PBW). The newest and most heavily traded ETF that I researched for this article is the PowerShares – Guggenheim Solar ETF (TAN).

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

Posted on

Capital Flows to Where it is Treated Best: ETFs Have Treated Investors Most Excellently (repost)

“Capital flows to where it is treated best.” Many of you have probably heard this quote more than once, and should easily understand it, even if you don’t embrace it as a universal truth. I like this quote because it just makes good common sense. The quote is normally used in the context of macro-economics, but I believe it is equally valid in the realm of actively managed mutual funds, index funds and ETFs.

Continue reading “Capital Flows to Where it is Treated Best: ETFs Have Treated Investors Most Excellently (repost)”

Posted on

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

– The oldest and most popular U.S. Large Cap Growth ETF has outperformed an S&P 500 Index Fund by 0.96% CAGR (compounded annual growth rate) over the last 19 years
– There are currently 45 ETFs available in the U.S. Large Cap Blend Morningstar Category
– Of those 45 ETFs, 15 have been available for 10 years or longer
– The top 4 ETFs in this asset class have produced returns above 12.95% CAGR over the last 10 years

US Large Cap Growth vs US Large Cap Blend: January 1972 through February 2018

Source: PortfolioVisualizer.com

Continue reading “Best Long-Term Performance U.S. Large Cap Growth ETFs 1.1”

Posted on

Best Long-Term Performance U.S. Large Cap Blend ETFs 1.1

• The U.S. Large Cap Blend asset class is the most common asset in U.S. investor’s portfolios
• This popular asset class has produce returns of 10.33% CAGR (compounded annual growth rate) since 1972
• The oldest ETF (SPY), and most popular in this category, was introduced in 1993
• There are over 100 ETFs available in the U.S. Large Cap Blend Morningstar category
• 25 of these ETFs have been available for 10 years or longer

U.S. Large Cap Blend vs U.S. Stock Market: January 1972 – February 2018

Source: Portfolio Visualizer

Continue reading “Best Long-Term Performance U.S. Large Cap Blend ETFs 1.1”

Posted on

Best Long-Term Performance International Large Cap Value ETFs 1.1

The International (Foreign) Large Cap Value asset class is a difficult asset class to research. The reason being is that there haven’t been funds available for very long in this asset class. The older mutual funds available in this asset class have only been around since the mid 1990’s. The oldest ETF available in this category is the BLDRS Developed Markets 100 ADR Index Fund (ADRD), inception December 2002. So, without significant fund data to compare this asset class with others, I am relying heavily on the expertise of historians, academic studies and reliable financial experts.

Continue reading “Best Long-Term Performance International Large Cap Value ETFs 1.1”

Posted on

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

  • Possibly the best performing broadly diversified equity asset class in the world…
  • U.S. Mid Cap Blend stocks have outperformed the S&P 500 by 1.75% CAGR (compounded annual growth rate) over the last 46 years
  • The oldest U.S. Mid Cap Blend ETF has outperformed the S&P 500 BY 2.03% CAGR over the last 22 years
  • Most ETFs in this asset class offer massive diversification in size of companies, sector exposure and value & growth
  • The middle of the market is where the action is

Large Cap Blend vs Mid Cap Blend vs Small Cap Blend: 1972 thru 2018

Source: Portfolio Visualizer

Continue reading “Best Long-Term Performance U.S. Mid Cap Blend ETFs 1.1”

Posted on

Best Long-Term Performance China Equity ETFs 1.1

– The oldest available China Equities ETF (FXI) has outperformed an S&P 500 index fund by 1.81% CAGR (compound annual growth rate) over the last 13 years
– There are currently 6 ETFs available that have over 50% exposure to Chinese equities that are 10 years old or older
– 3 of these ETFs have significantly outperformed FXI over the last 10 years
– 1 of these ETFs adds exposure to India without degrading long-term returns
– China encompass approximately 19% of the world’s population

Continue reading “Best Long-Term Performance China Equity ETFs 1.1”

Posted on

Best Long-Term Performance U.S. Small Cap Blend ETFs 1.1

• One of the best performing asset classes over the last 46 years has been the U.S. Small Cap Blend Equity asset class
• IJR is one of the two oldest ETFs available in this asset class and has outperformed the S&P 500 by a whopping 4.53% CAGR (compounded annual growth rate) over the last 18 years
• There are 11 ETFs available in this asset class that have existed for 10 years or longer
• 8 of these 11 ETFs have outperformed the S&P 500 over the last 10 years

US Small Cap Blend vs US Large Cap Blend: January 1972 thru December 2017

Source: Portfolio Visualizer

Continue reading “Best Long-Term Performance U.S. Small Cap Blend ETFs 1.1”

Posted on

Best Long-Term Performance Industrials Sector ETFs 1.1

If you’ve considered putting a portion of your portfolio in the Industrials sector, I’d like to demonstrate how I came up with what I believe are the best ETFs in this sector. But, before I get into the performance of the Industrials sector ETFs, I’d like to give a brief description of it. Because many ETFs can be classified into more than one sector, I have settled on using Morningstar’s categories in determining what sector an ETF belongs in. Morningstar describes the Industrial sector as: “Companies that manufacture machinery, hand-held tools and industrial products. This sector also includes aerospace and defense firms as well as companies engaged in transportation and logistics services. Companies in this sector include 3M, Boeing and Siemens.” Now, let’s move on to performance.

The oldest Industrial Sector ETF available is the Industrial Select Sector SPDR® Fund (XLI). XLI’s inception date was 12/16/1998. By using this ETF, we can back-test this sector with nearly 20 years of data and see how this it has held up through two major market downturns.

XLI vs. S&P 500 January 1999 – December 2017

Source: Portfolio Visualizer

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

Posted on

Why Does the Deep Value ETF Accumulator Publish Every Buy & Sell?

With all the Sells that I’ve published this month, some people may get the idea that I am bragging about making money in the stock market. The reason it could come across that way is that in the last month I’ve published 8 Sells and only 5 Buys. I never sell at a loss, so those were all, in-fact, profitable trades. So, why am I doing all this? Why even bother publishing any Buys or Sells?

Continue reading “Why Does the Deep Value ETF Accumulator Publish Every Buy & Sell?”

Posted on

Best Long-Term Performance Utilities Sector ETFs 1.1

As most portfolio managers know, building a broadly diversified portfolio has one key building block. Low or negatively correlated assets. Ideally, if each of these building blocks has low correlation to the others, one or more will be falling in value while the others are going up in value. This ideal scenario lends itself to arbitrage opportunities and the ability to buy assets when the market has placed them ‘on-sale’. With that said, have you considered diversifying a portion of your portfolio into the Utilities sector? If you want low correlated assets in your portfolio, I would suggest considering the Utilities sector. The utilities sector has maintained a very low correlation to the U.S. Stock Market over the last 19 years, at just 0.39. I wrote more in depth about this low correlation phenomena right here:  Which Equity Asset Class has the Lowest Correlation to the U.S. Stock Market?

Utilities Sector Correlation to U.S. Markets January 1999 – December 2017

Source: Portfolio Visualizer

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

Posted on

Which Equity Asset Class has the Lowest Correlation to the U.S. Stock Market?

When building a diversified portfolio of equities, one of the most important considerations is the correlation coefficient of the individual components in the portfolio. It just wouldn’t make sense to build a portfolio with several different assets that always go up and down simultaneously. If all the components of the portfolio are moving in tandem, there will be few opportunities to take advantage of the arbitrage benefits of re-balancing. And, if all the components of your portfolio are walking in lockstep with each other, why bother with diversifying into multiple funds, why not just buy a Total Stock Market fund or a Total World Equity index fund and leave all these re-balancing shenanigans alone?

There are several well-known equity asset classes that portfolio managers use to try and take advantage of diversification and low correlation. You probably have a few of these assets on your mind now, or at least in your portfolio. Which one do you think has the least correlation to the U.S. Stock Market?

  • Is it Emerging Markets?
  • Is it REITs (Real Estate Investment Trusts)?
  • Is it Consumer Staples?
  • Is it International Value Stocks?
  • Is it Small Cap Stocks?
  • Is it Large Cap Value Stocks?
  • Or, could it possible be the frequently neglected Utilities Sector?

Continue reading “Which Equity Asset Class has the Lowest Correlation to the U.S. Stock Market?”

Posted on

“This Too Shall Pass”… When Should You Invest?

When is it a good time to invest? This is a question that almost all investors face at some point. The fortunate investor will quickly realize that the best time to invest was a long time ago, and the second best time to invest is today. So, they mindfully begin planting the seeds today believing they will reap the growth of those seeds many years into the future.

Mesmerising chart inserted here. Please ponder the question, “When should I invest?”

Continue reading ““This Too Shall Pass”… When Should You Invest?”

Posted on

Did TD Ameritrade Shoot Its’ Own Foot?

Recently, TD Ameritrade has nearly tripled the number of ETFs that it will allow customers to trade commission-free. On the surface this sounds great. But, in the process of attempting to expand their customer base they have neglected to consider the needs and desires of many of their existing customers. I have not yet formed a strong opinion on TD Ameritrade’s decision but I have gathered numerous articles about this move and the tone ranges from praise to utter disgust. Here are the articles currently available:

Continue reading “Did TD Ameritrade Shoot Its’ Own Foot?”

Posted on

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

Are you an aggressive growth investor? If so, you may want to consider investing in a U.S. Small Cap Growth ETF. Small cap growth equities are generally considered one of the most aggressive equity asset classes available. But, with over 1900 ETFs available, how do you find one with a great long-term track record. Fortunately, there are only 9 US Small Cap Growth ETFs listed at etfdb.com and only 7 of them are 10 years old or older.  Long-term performance is the #1 thing I look at when selecting an asset to invest in. Here is the list of ETFs I’ll be comparing:

Continue reading “Best Long-Term Performance U.S. Small Cap Growth ETFs 1.1”