US Equities Fall as Economic Instability Continues
05/10/2011 0 comments
As investors continue to seek diversification in their portfolios, US Equity ETFs remain a popular choice. Equity ETFs allow for diversification across sectors and in regards to size of the company. The style of an ETF is determined by the market segment it occupied, generally falling into small, mid, or large-cap. Additionally, the potential for growth is taken into account which index style a stock should fit into. The Russell indices provide a strong benchmark for each style.
With the market continually evolving and investors becoming more sophisticated, it is more necessary than ever to make sure each index properly tracks the markets it is intended to. The Russell indices have proven to be a favorite among investment managers, as almost half of all US equity investment products use the Russell Style Indices as their benchmarks.
The table below shows the weekly returns of US equity ETFs that track a Russell Index:
US Equity Style Trend
05/06/2011We track asset class movement which are updated weekly.
Performance data are based on closing prices on last Friday.
| Description | Symbol | 1 Week | 4 Weeks | 13 Weeks | 26 Weeks | 52 Weeks | Trend Score |
|---|---|---|---|---|---|---|---|
| Russell Largecap Growth | IWF | -1.68% | 1.42% | 2.73% | 10.84% | 26.86% | 8.03% |
| Russell Largecap Index | IWB | -1.72% | 1.0% | 2.96% | 11.02% | 24.11% | 7.48% |
| Russell Largecap Value | IWD | -1.69% | 0.57% | 3.15% | 12.18% | 22.55% | 7.35% |
| Russell Midcap Growth | IWP | -1.63% | 1.82% | 4.84% | 16.38% | 35.25% | 11.33% |
| Russell Midcap Indedx | IWR | -1.82% | 1.1% | 4.33% | 14.23% | 30.96% | 9.76% |
| Russell Midcap Value | IWS | -1.87% | 0.56% | 3.78% | 13.38% | 28.55% | 8.88% |
| Russell Smallcap Growth | IWO | -3.91% | -0.37% | 6.1% | 16.76% | 36.75% | 11.07% |
| Russell Smallcap Index | IWM | -3.61% | -0.85% | 4.47% | 13.63% | 28.99% | 8.53% |
| Russell Smallcap Value | IWN | -3.36% | -1.48% | 2.74% | 11.48% | 22.66% | 6.41% |
In the past week, the US market suffered as slight retraction as many corporate earnings reports failed to meet Wall Street expectations. Additionally, general economic uncertainty reared its head in the market, driving investors out of US equities for the week Because of this, all ETFs in the US Equity Style Trend table were down for the week.
Small cap ETFs were hit the hardest, as the iShares Russell 2000 Growth Index (IWO), the iShares Russell 2000 Index (IWM), and the iShares Russell 200 Value Index (IWN) all dropped over 3% in the past week. This follows traditional market behavior as small cap equties tend to react more harshly to swings in the market.
The iShares Russell Midcap Growth Index (IWP), down 1.63%, and the iShares Russell 1000 Growth Index (IWF), down 1.68%, were least effected by the downturn in the market. In the near future, mid to large cap equity ETFs will likely provide more stability and better gains than smaller ETFs as the market remains in flux and succesptible to turn on a variety of daily economic news.
| Assets Class | Symbols | 05/04 Trend Score | 04/27 Trend Score | Direction |
|---|---|---|---|---|
| Russell Midcap Growth | IWP | 10.11% | 12.57% | v |
| Russell Smallcap Growth | IWO | 9.75% | 14.01% | v |
| Russell Midcap Indedx | IWR | 8.92% | 10.9% | v |
| Russell Midcap Value | IWS | 8.24% | 9.84% | v |
| Russell Largecap Growth | IWF | 7.69% | 9.25% | v |
| Russell Smallcap Index | IWM | 7.41% | 11.05% | v |
| Russell Largecap Value | IWD | 7.39% | 8.15% | v |
| Russell Largecap Index | IWB | 7.29% | 8.52% | v |
| Russell Smallcap Value | IWN | 5.7% | 8.56% | v |
You can get a no cost widget for any of these tables which will automatically update weekly.
Despite the weak performance in recent periods, every style in the table has exhibited strong growth over the past 52 weeks, mirroring a rise in the US equity market. Investing in ETFs that use Russell Indices as a benchmark provides an investor with a the assurance that his or her investment will maintain the risk and return possibilities that he or she signed up for. As with any investment, it is important to ensure that the goals of the ETF match your personal investment goals.
Symbols: IWF, IWB, IWD, IWP, IWR, IWS, IWO, IWM, IWN
Tickers: (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.comments 0
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