 |
Vanguard ETF: |  |
7.4%* |
|
Diversified Core: | |
8.1%* |
|
Six Core Asset ETFs: | |
7.3%* |
Articles on XLV
- US Sectors Favor Telecom, Healthcare
05/10/2011
The US Economy is divided into various Sectors. Sector are classified as General Segments of the economy within which a large group of companies can be categorized. Overall the US sectors shows good performance last year except for financial companies. The sectors that show substantial growth are energy, material and telecom industries.
Energy (XLE) returns dropped recently due to profit taking. Crude oil prices are currently at their highest level since 2008. The US Energy Information Association (EIA) predicted that oil markets will continue to tighten over the next two years due to slow growth from non-OPEC countries. Due to these events we expect the drawdown in global petroleum stocks and an increase in production demand from the OPEC countries, another reason for reducing crude oil production is the recent Libya and Middle East conflict which will disrupt the crude oil supply globally. We are expecting good growth in the energy sector as the total demand of oil grows by an annual average of 1.5 million bbl/d in 2011 and 2012.
We believe IYZ will continue to grow slowly this year. Economists and portfolio managers are moving towards technology with demands for new products as well as telecommunications providers with dividends and earnings growth. The returns are not impressive although steady in nature. Worldwide the demand of technology and telecommunication related products are gaining popularity making this sector interesting.
XLV prospects appear bright as there is a surge as the population ages and healthcare expects to double by 2018.
XLF still remain down while the things gradually improve: XLF growth is expected to be meager in 2011 but the things will improve in 2012 – 13.
The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).Assets Class Symbols 05/06
Trend
Score04/29
Trend
ScoreDirection Telecom IYZ 11.63% 10.44% ^ Healthcare XLV 10.93% 10.5% ^ Industries XLI 9.92% 11.4% v Energy XLE 9.47% 17.92% v Consumer Discretionary XLY 9.37% 9.76% v Consumer Staples XLP 8.43% 8.95% v Utilities XLU 7.14% 6.48% ^ Materials XLB 6.91% 10.93% v Technology XLK 6.08% 6.94% v Financial XLF 1.08% 3.51% v Trend Rankings: The trend table ranks each of the ten U.S. industrial iShares ETFs and the score is based on the following formula: for an ETF or index, we use the average of 1, 4, 13, 26 and 52 week total returns (i.e. dividend and distribution reinvested). Notice the average of the total returns would overweight the recent price movement. This is similar to exponential moving average.
One concern: The recovery of the economy will face challenges in upcoming months as they battle huge debt. S&P recently showed concern revising US credit rating. The current administration is making plans to cut the deficit which may lead to austerity programs that could affect the overall momentum of these sectors.
Symbols: XLY, IYZ, XLI, XLB, XLK, XLE, XLF, XLP, XLU, XLV
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.
- XLE The Clear Sector Leader
05/03/2011
In a retirement account, Sector investing can be very worthwhile. It can lead to portfolio returns that “beat the market”. Sectors offer a way of focusing, in a disciplined fashion, similar to looking at Countries, or broad markets. At any given point in time, one or more sectors may be out performing other sectors, and the broad stock market. Portfolios that include Sector allocation can capture this performance.
A great way to get sector exposure is through exchange traded funds. Today, there are numerous 'sector' type exchange traded funds that you can invest in. The iShares and the SPDR lineups are probably the two most popular. However there are several other providers that offer unique and interesting sector and industry ETFs.
Below is the Sector performance table, sorted by “Trend Score”, which is also posted at MyPlanIQ - Global Trends .
US Sectors TrendPerformance data are based on closing prices on April 29th 2011
Description
Symbol
1 Week
4 Weeks
13 Weeks
26 Weeks
52 Weeks
Trend Score
Energy
1.9%
0.61%
13.56%
36.92%
36.63%
17.92%
Industries
2.84%
1.9%
8.48%
21.41%
22.37%
11.4%
Materials
1.04%
1.74%
8.45%
18.79%
24.64%
10.93%
Healthcare
2.89%
5.89%
11.99%
14.16%
17.58%
10.5%
Telecom
1.95%
2.63%
7.69%
14.23%
25.69%
10.44%
Consumer Discretionary
1.6%
3.18%
9.67%
16.07%
18.29%
9.76%
Consumer Staples
2.01%
4.82%
9.38%
11.14%
17.39%
8.95%
Technology
1.48%
2.81%
3.87%
10.58%
15.95%
6.94%
Utilities
2.85%
3.24%
5.8%
6.83%
13.65%
6.48%
Financial
1.74%
-0.91%
1.06%
13.2%
2.44%
3.51%
The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).
With all of the headline news lately, it is no surprise that the Energy Sector ETFs are the strongest. The holdings inside the ETFs usually include the large cap oil companies such as Exxon and Chevron, and, some of the smaller cap companies. When crude oil, and petroleum product prices rise, usually the margins of the oil companies expand. An example could be the cost of production of a barrel of crude stays relatively fixed, as the selling price of the barrel of crude goes higher. Similarly, some of the costs of refining a gallon of gasoline stay relatively fixed, as the selling price of that gallon goes higher.
These energy sector ETFs are definitely on my retirement portfolio watch list this year.
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.
Exchange Tickers: (NYSE:XLE), (NYSE:XLI), (NYSE:XLB), (NYSE:XLV), (NYSE:IYZ), (NYSE:XLY), (NYSE:XLP), (NYSE:XLK), (NYSE:XLU), (NYSE:XLF)
- Schwab ETF Select List Plan Offers Diversification and High Quality Fund Selection
03/16/2011
by Kevin Carr, A MyPlanIQ Expert User
On March 9, 2011, Charles Schwab announced the release of the ETF Select List. The quarterly Schwab ETF Select List was created by Charles Schwab Investment Advisory, Inc. and is a filtered list of all of the ETFs in the marketplace, highlighting pre-screened, low-cost ETFs. Schwab used quantitative and qualitative screens to filter each ETF and build the list, covering 6 major asset categories and 45 minor asset categories. All ETFs, including Schwab ETFs, are evaluated using the same criteria and broken into sectors for US Equity, Foreign Equity, Emerging Market Equity, Fixed Income, Commodity and REITs.
The ETF Select List gives investors a choice of low-cost, pre-screened ETFs. Schwab highlights just one ETF in each category, chosen based on specific criteria including expense ratio, risk, structure and how well it fits into its category. To make the list, an ETF has to meet minimum criteria that include assets under management, including narrowness of index, trading volume, bid/ask volatility, risk, annualized cost of ownership, fund structure and fit within a given category. The list excludes exchange-traded notes (ETNs), inverse or leveraged ETFs, actively managed ETFs, and unmanaged baskets of securities.
While the ETF Select List has only been out a few days, I constructed a plan on MyPlanIQ platform. The Schwab ETF Select List has no redemption periods, is commission efficient and offers low expenses.
As of March 13, the Schwab ETF Select List Plan has a four star investment menu rating with a 99% diversification score and an overall above average investment choice based on MyPlanIQ Plan Rating methodology . The Plan Rating methodology is designed to measure how effective a plan’s available funds are using key factors such as diversification, fund quality and portfolio building.
Attribute Schwab ETF Select List Six Core Asset ETF Benchmark Diversification great (99%) average (63%) Fund Quality above average (70%) below average (23%) Portfolio Building average (53%) above average (70%) Overall Rating above average (72%) average (54%) The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies (SAA and TAA , both provided by MyPlanIQ). For comparison purpose, we also include the moderate model portfolios of a typical 6 asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent:
US Equity: SPY or VTI
Commodity: DBC
Foreign Equity: EFA or VEU
REITs: IYR or VNQ or ICF
Emerging Market Equity: EEM or VWO
Fixed Income: AGG or BND
Performance chart (as of Mar 15, 2011)Performance table (as of Mar 15, 2011)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Schwab ETF Select List Tactical Asset Allocation Moderate 9% 88% 6% 57% 12% 91% Schwab ETF Select List Strategic Asset Allocation Moderate 11% 114% 3% 15% 4% 19% Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate 9% 86% 8% 65% 12% 88% Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate 12% 113% 4% 17% 6% 32% Currently Commodities, Real Estate and US Equity are doing well. These asset classes are available to Schwab ETF Select List participants.
To Summarize, Schwab ETF Select List Plan offers wide diversification, high quality funds with low expenses. compared with other brokerage supported ETF plans, it is very favorable. From time to time, we will review the plan.
Symbols:DBC,DBA,IAU,DBB,USL,PFF,VNQ,XLY,XLP,XLE,XLF,XLV,XLI,XLB,XLK,IYZ,XLU,BND,SCHO,SCHR,TLH,SCHP,CIU,JNK,BWX,MUB,SCHF,EFG,EFV,SCHC,SCHE,VEU,VT,VGK,VPL,EWJ,GXC,SCHX,SCHG,SCHV,VO,VOT,VOE,SCHA,VBK,VBR,SCHB,VYM,
Symbols (exchange): (DBC),(DBA),(IAU),(DBB),(USL),(PFF),(VNQ),(XLY),(XLP),(XLE),(XLF),(XLV),(XLI),(XLB),(XLK),(IYZ),(XLU),(BND),(SCHO),(SCHR),(TLH),(SCHP),(CIU),(JNK),(BWX),(MUB),(SCHF),(EFG),(EFV),(SCHC),(
SCHE),(VEU),(VT),(VGK),(VPL),(EWJ),(GXC),(SCHX),(SCHG),(SCHV),(VO),(VOT),(VOE),(SCHA),(VBK),(VBR),(SCHB),(VYM) - Rising Energy Costs: Casting a Cloud over Energy-Dependent Sector ETFs
01/15/2011
The relative performance among sector ETFs remained largely unchanged last week, with energy (XLE) retaining its top spot. However, we saw a broad-based drop in trend scores across sectors. Marking a shift in sentiment, consumer discretionary (XLY) dropped to the fourth spot from being second a week ago. By examining the following table, one can gain critical insights into how to build portfolios at the sector level:
Assets Class
Symbols
01/12
Trend
Score01/05
Trend
ScoreDirection
Energy
XLE
16.21%
14.72%
^
Materials
XLB
13.6%
14.24%
v
Industrials
XLI
12.87%
14.01%
v
Consumer Discretionary
XLY
12.11%
14.32%
v
Technology
XLK
9.71%
10.35%
v
Telecom
IYZ
8.74%
13.08%
v
Financial
XLF
8.08%
9.88%
v
Consumer Staples
XLP
5.21%
6.52%
v
Healthcare
XLV
4.68%
5.18%
v
Utilities
XLU
3.25%
3.65%
v
Fundamentals are improving the in the financial sector (XLF), with industry bellwether J.P. Morgan Chase reporting record-breaking profits on Friday. As credit condition has improved, delinquencies have dropped and lending activities are picking up. The industry is still facing headwinds. Litigations centered on mortgage buyback and still weak housing markets will post pressure on the margins.
Energy (XLE) was lifted by rising oil prices. Along with the sharp rise in demand for heating oil and naturals gas driven by the severe winter conditions in the Northeast, the closure of the Trans-Alaska pipeline has helped push oil past $91. One may ask the question of whether rising energy costs would post a thread to the economic recovery and how this would affect the dynamics in sectors (e.g. industrials (XLI), consumer (XLY)) that are exposed to the volatile oil market and that require large energy input.
Some economists have suggested as the U.S. economy becomes more service oriented, with energy costs accounting for less in the overall cost structure of the economy, rising oil prices would have little effect on the overall economy. That said, it’s crucial to recognize that rising energy costs would certainly affect consumer behavior and business spending at least in the short run. Therefore, identifying sectors that would be negatively affected in an event of oil shock is critically important when building a portfolio at the sector level.For more detailed total return performance, please see here.
labels:investment,
Symbols:XLY,IYZ,XLI,XLB,XLK,XLE,XLF,XLP,XLU,XLV,SPY,QQQQ,IWM,MDY,EFA,VEU,EEM,VWO,IYR,ICF,VNQ,GSG,DBC,DBA,USO,LQD,CSJ,CIU,HYG,JNK,PHB,TLT,IEF,SHY,SHV,BND,AGG,MUB,MBB,
- Most U.S. Sector End Sharply Higher For The Year
01/01/2011
MyPlanIQ tracks detailed weekly U.S. sectors trend movements. We use ETFs that represent each sector and present the results here. More details can be found in MyPlanIQ 360 Degree Market View.
Energy (XLE), Materials (XLB), and Industrials (XLI) remain as the top three sectors this week.
Rising oil prices have helped propel the energy sector (XLE) higher, outperforming the broader market in the fourth quarter. As economic activity picks up with reports on dwindling U.S. crude oil inventories, optimism may drive oil prices past the $100 a barrel mark in the near term.
Following its recent up trend, materials (XLB) goes another notch higher and gained 1.25% this week. Recording-setting commodity prices in 2010 were primary driven by adverse weather and robust demand from China. The materials sector is expected to continue to do well in 2011 as commodity-hungry economies such as China and India are leading demand for industrial and construction materials.
The industrials sector (XLI) had a stellar year, handing investors a 26% return in 2010. Many analysts have recently revised upward their estimates for the 12-month forward earnings by the industrials sector. We expect the positive momentum will carry through the first half of 2011. Against this favorable backdrop, (XLY) makes an attractive momentum play in the medium term.
The healthcare sector (XLV) underperformed the broader market with an annual gain of 2.46%. High unemployment rate and the revamped healthcare law have put pressure on margins and earnings throughout the healthcare supply chain.
Defensive stalwart the utilities sector (XLU) lagged with annual gains of 3%.
Assets Class
Symbols
29-Dec
22-Dec
Annual
Direction
Trend
Trend
Return
Score
Score
Energy
XLE
17.53%
15.73%
12.35%
^
Materials
XLB
16.82%
14.99%
26.54%
^
Industrials
XLI
14.43%
13.77%
2.46%
^
Consumer Discretionary
XLY
14.23%
13.81%
3.01%
^
Telecom
IYZ
11.69%
10.34%
11.38%
^
Technology
XLK
9.81%
8.66%
10.47%
^
Financials
XLF
9.56%
9.25%
26.49%
^
Consumer Staples
XLP
7.57%
7.37%
20.10%
^
Healthcare
XLV
4.63%
4.40%
18.73%
^
Utilities
XLU
3.91%
3.99%
17.50%
v
labels:investment,
Symbols:XLY,IYZ,XLI,XLB,XLK,XLE,XLF,XLP,XLU,XLV,SPY,QQQQ,IWM,MDY,EFA,VEU,EEM,VWO,IYR,ICF,VNQ,GSG,DBC,DBA,USO,LQD,CSJ,CIU,HYG,JNK,PHB,TLT,IEF,SHY,SHV,BND,AGG,MUB,MBB,
- U.S. Sectors Trend: Cautious Gains Amid Mixed Catalyst
12/19/2010
- U.S. Sectors Up on Economic Hopes
12/11/2010
- US Sectors Nov 29
11/30/2010
- US Sectors Up Across the Board
11/23/2010
- Top US Sectors Weather the week well -- bottom half feels the pain
11/19/2010
- ETFs Provide Insight Into U.S. Sectors' Performance
11/12/2010
