Small Caps Continue to Lead the Way Even as Libya Presses Down
03/10/2011 0 comments
We track US Asset Class Trends to determine which subclasses would be the best for your long term investment portfolio. Whether you are using a buy and hold or momentum based portfolio, rotating in the highest performing asset can bring additional returns. We use iShares' ETFs to gain consistency. We have no affiliation or relationship with iShares.
| Assets Class | Symbols | 03/09 Trend Score | 03/02 Trend Score | Direction |
|---|---|---|---|---|
| Russell Smallcap Growth | IWO | 13.75% | 14.83% | v |
| Russell Smallcap Index | IWM | 12.27% | 13.29% | v |
| Russell Midcap Growth | IWP | 11.5% | 13.33% | v |
| Russell Smallcap Value | IWN | 11.43% | 12.43% | v |
| Russell Midcap Value | IWS | 11.09% | 11.56% | v |
| Russell Midcap Index | IWR | 10.92% | 11.98% | v |
| Russell Largecap Value | IWD | 9.72% | 9.94% | v |
| Russell Largecap Growth | IWF | 9.39% | 10.61% | v |
| Russell Largecap Index | IWB | 9.12% | 9.94% | v |
The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested). The Mid Cap funds are clustered in the middle of the table with a small gap as we drop into the Large Cap funds. We note that not only are Large Cap at the bottom but they are inverted in the sense that Value leads whereas in other sub-classes they lag. Our intuition is that those with Large Cap choices are looking to find extra returns in the higher risk piece. Note however, that the last week gain was not far off the top of the table which may indicate something of a move to safety. We think that this picture will remain constant for a few weeks as the Libyan situation resolves itself -- but it won't be quick. The diplomatic drama has a certain set of rules it has to follow as it is played out on the world stage. France has stopped recognizing Gaddafi and others will likely follow suit. It isn't clear whether after replacement there will be insurgency like Iraq or a representative government will take it's place and life will return to normal. This will impact the amount of time that oil is at a level that can slow the economy and, at some point, there will be more of a move to a defensive posture. Symbols: (NYSE,IWF),(NYSE,IWB),(NYSE,IWD),(NYSE,IWP),(NYSE,IWR),(NYSE,IWS),(NYSE,IWO),(NYSE,IWM),(NYSE,IWN),
Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
As expected, US equities are down across the board as concerns driven by Libya, oil prices and a possible slowing economy saps the enthusiasm for equities. However, the performance appears to mirror the words of Fed Chairman Bernanke when he said that rising oil prices will be a short term problem that will not be a long term problem.
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