Vanguard ETF: | 7.4%* | ||
Diversified Core: | 8.1%* | ||
Six Core Asset ETFs: | 7.3%* |
Articles on PIZ
- Foreign Large Cap Equities Deliver Strong Returns Among Dividend Stock ETFs
05/04/2011
Foreign Large Cap Equity ETFs allow investors to diversify their portfolios by gaining exposure large stocks in developed economies across the globe. These ETFs track equities from nations like Japan, the UK, and Germany, among many others. These ETFs invest primarily in stocks with market caps in the top 70% of their respective markets.
Among Dividend Stock ETFs (see table), those that track Foreign Large Cap Equities performed very well in the past week, continuing their string performance over the past 52 weeks.. The iShares Dow Jones International Select Dividend ETF (IDV) returned 2.81% in the past week and over 28% in the past 52 weeks. Also performing well among Dividend Stock ETFs was the iShares MSCI EAFE Index ETF (EFA), which gained 2.69% in the last week and almost 18% during the past year.
Top Dividend Stock ETF Trends
4/29/2011
ETF Name Symbol 1 Week 4 Weeks SPDR DJ Wilshire Intl Real Estate RWX 2.98% 5.22% iShares Dow Jones Intl Select Div Idx IDV 2.81% 6.02% iShares MSCI EAFE Index EFA 2.69% 4.90% iShares Dow Jones US Real Estate IYR 2.62% 4.78% First Trust Value Line Dividend Index FVD 1.93% 3.15% SPDR S&P 500 SPY 1.93% 2.18% iShares Dow Jones Select Dividend Index DVY 1.89% 2.32% Vanguard High Dividend Yield Indx VYM 1.84% 3.27% PowerShares Intl Dividend Achievers PID 1.81% 4.28% PowerShares HighYield Dividend Achievers PEY 1.73% 1.78% The growth of these ETFs has followed an upward trend in the overall equity market in recent periods. As a higher percentage of the world's equity market capitalization continues to shift away from the United States, Foreign Large Cap Equities will continue to bring strong returns to investors.
Foreign Large Cap Equities
04/29/2011Description Symbol 1 Yr 3 Yr 5 Yr Avg. Volume(K) 1 Yr Sharpe iShares MSCI EAFE Index EFA 16.26% -3.93% 0.58% 17,665 68.32% Vanguard MSCI EAFE ETF VEA 21.49% -0.87% NA 2,135 88.16% Schwab International Equity SCHF 19.65% NA NA 180 86.62% iShares Dow Jones Intl Select IDV 26.81% 1.73% NA 156 107.04% iShares MSCI EAFE Value Index EFV 14.36% -4.8% -1.08% 133 55.66% PowerShares Intl Dividend Achievers PID 20.98% -1.56% 2.87% 121 112.83% iShares MSCI EAFE Growth Index EFG 19.53% -2.71% 1.55% 84 86.67% PowerShares DWA Dev Mkts Techn PIZ 22.65% -0.49% NA 115 93.38% In addition to the ETFs mentioned above, others in the Foreign Large Cap sector have shown strong growth in recent periods. The PowerShares DWA Developed Markets Technical ETF has returned 22.65% in the past year and the Vanguard MSCI EAFE ETF (VEA) gained 21.49% during the same period. These strong gains have helped to offset the large valuation declines experience during the recent financial crisis.
While high equity valuations may trigger a market retraction in coming periods, Foreign Large Cap Equity ETFs should remain a substantial part of any well-diversified portfolio.
Symbols: EFA, VEA, SCHF, IDV, EFV, PID, EFG, PIZ, RWX, IDV, EFA, IYR, FVD, SPY, DVY, VYM, PEY
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.
- Replacing VEA and EFV with PID, PIZ Boosts Morningstar Clone Across the Board
03/01/2011
In a previous article we looked at how the ETFs compared with managed funds available in the Morningstar 401K plan – we are using this as an excellent example of a plan with a reasonable number of funds that can still deliver a portfolio with good returns.
We summarized the differences between the ETF clone and the original by creating a score for each fund and then summing them up by major asset class. This gave us the following table:
Asset Class
ETF Score
Mutul Fund Score
Delta
US Equities
420%
422%
0%
International Equities
17%
56%
228%
Emerging Markets
62%
46%
-26%
Real Estate
43%
45%
4%
Commodities
31%
15%
-52%
Fixed Income
107%
173%
62%
We noted that the two areas of biggest concern were the international equities and the fixed income. We speculated that it might well be difficult to emulate the managed fixed income performance delivered by two of the leading companies in that area PIMCO and Loomis Sayles.
In this article, we start by reviewing the international equities class to see if we can close the gap between the clone and the original. We recognize that this might be considered cherry picking in the sense that we are using historical returns that may not be reflected going forward. Nevertheless, the exercise will be instructive, even if only to show where it can be dangerous to just chase returns.
With international equity, the current funds are:
Ticker
Description
5 year AR (%)
3 year AR (%)
1 year AR (%)
ETF Score
Mfund Score
VEA
Vanguard Europe Pacific ETF
(2.68)
17.45
13%
VWILX
Vanguard International Growth Adm
4.04
(1.26)
21.65
32%
EFV
iShares MSCI EAFE Value Index
(0.66)
(4.69)
12.77
4%
TBGVX
TweedyBrowne Global Value
2.87
1.38
13.75
24%
When we looked at the alternative ETFs, we reduced it to the following choices:
Ticker
Description
5 year AR (%)
3 year AR (%)
1 year AR (%)
ETF Score
1.21
(4.39)
16.64
14%
(3.15)
21.38
17%
18.55
19%
2.26
(2.95)
18.48
21%
1.99
(3.96)
19.00
19%
(2.29)
30.84
27%
There are some intriguing choices and as time goes on, there will be increasing numbers with more established history.
· We chose PID because of strong returns and because dividend ETFs go for solid companies and in the current environment, that is a sound choice
· We chose PID because of its strong results. There is something of risk because of the shorter history but we selected it nevertheless
When we swap out VEA and EFV for PID and PIZ, we see the following historical behavior
Performance chart (as of Feb 28, 2011)
Performance table (as of Feb 28, 2011)
Portfolio Name
1Yr AR
1Yr Sharpe
3Yr AR
3Yr Sharpe
5Yr AR
5Yr Sharpe
Morningstar 401K ETF Clone-PI-PZ Tactical Asset Allocation Moderate
17%
119%
9%
66%
13%
84%
Morningstar 401K ETF Clone-PI-PZ Strategic Asset Allocation Moderate
18%
159%
2%
12%
5%
27%
Morningstar 401K ETF Clone Tactical Asset Allocation Moderate
15%
112%
8%
63%
11%
75%
Morningstar 401K ETF Clone Strategic Asset Allocation Moderate
17%
155%
3%
14%
6%
30
As we mentioned earlier, it is important not to fall into the trap of just chasing returns and we note that over the longer time horizons, this switch has degraded returns for the strategic asset allocation.
However, we note that this has bumped tactical asset allocation across the board.
In the next article, we will look at the impact of fixed income.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.