What the Results of the First Half 2014 Mean for Investors

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

Presenting Your Halftime ETF Scorecard

The first half of a most unusual year for the financial markets now is in the books, and that means it’s time to break out the halftime exchange-traded fund (ETF) scorecard to see which funds have led the charge higher, and how those funds compare to the exchange-traded funds representing the major market indices.

Let’s start by looking at the table below of the top-performing ETFs through the first half of the year. Note that the “%200DMA” column shows the percentage that each fund is above its 200-day moving average. This metric is important because it tells us how far extended a fund has become when compared to its long-term trend line.

Ticker Name YTD% %200DMA
SCIF Market Vectors India S/C 62.93 54.01
SCIN Emerging Global Index India 49.44 43.25
GLDX Global X Gold Explorers ETF 45.82 19.77
SMIN iShares MSCI India Small Cap Index Fund 44.18 42.90
SILJ Purefunds ISE Junior SIL-ETF 43.90 18.64
INXX Emerging Global Shares Index 39.38 29.99
GDXJ Market Vectors Junior Gold Miners ETF 36.10 14.59
GGGG Global X Pure Gold Miners ETF 35.53 15.05
EPI WisdomTree India Earnings 28.84 24.79
TAN Claymore/MAC Global Solar Energy 26.69 11.70

As you can see by the table of the top 10 ETFs in the first half, it’s all about India, precious metals mining stocks, emerging markets and solar. The election in India of a pro-business Prime Minister was great for stocks in that country, and the rise in gold and silver prices helped mining stocks do very well. The rise in oil prices prompted renewed buying interest in alternative energy stocks like solar.

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Now, as you can see, the huge gains in the top 10 ETFs outperform the still very strong performance of the major market indices. The table below shows the ETFs we use to mirror the most important market measures.

Ticker Name YTD% %200DMA
DIA SPDR DJIA Trust 1.46 4.32
SPY SPDR S&P 500 ETF Trust 5.97 7.19
IWM iShares Russell 2000 ETF 2.99 5.50
EFA iShares MSCI EAFE ETF 1.90 2.87
EEM iShares MSCI Emerging Market 3.43 4.84
AGG iShares Core U.S. Aggregate 2.79 1.55
TLT iShares 20+ Year Treasury Bond 11.45 5.64
EMB iShares JP Morgan USD Emerging Markets Bond 6.57 4.40
GLD SPDR Gold Shares 10.27 3.13
OIL iPath Goldman Sachs Crude Oil 10.60 8.05

Here we see that although there have been big gains in all of these market vital signs; we haven’t yet seen a situation where these markets have extended far beyond their respective 200-day moving averages.

The biggest move above the long-term trend line is in crude oil, with the iPath Goldman Sachs Crude Oil (OIL) 8.05% above its 200-day moving average. Right now, gold, bonds and European equities are slightly above their long-term trend lines.

In our Successful ETF Investing advisory service, we currently have exposure to alternative energy stocks, precious metals and mining stocks and emerging markets. If you are looking for a way to generate ideas that will fit your financial goals, then you owe it to yourself to check out Successful ETF Investing today.

On Time Passages

Well, I’m not the kind to live in the past
The years run too short and the days too fast
The things you lean on are things that don’t last
Well, it’s just now and then my line gets cast into these time passages

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–Al Stewart, “Time Passages”

It’s okay to reminisce about the good old days, but I like to live for the now. This philosophy also is important when it comes to investing, because what worked in the past may not work in the now, or in the future. Keep that in mind the next time you lean on ideas, and investment vehicles, that don’t last.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow Weekly ETF Report readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Ask Doug.

In case you missed it, I encourage you to read my e-letter column from last week about how you can dodge mutual fund fees with ETFs. I also invite you to comment in the space provided below.

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