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Citi Report: ETFs Fall 9.3% In September
Written by Eric Rosenbaum   
Friday, 10 October 2008 13:54  |  Related ETFs: EXT / SFV / SMN

 

Amid the dire markets conditions in September, the average exchange-traded fund was down 9.3% for the month, according to the latest monthly ETF research report from CitiGroup Global Markets.

The Standard & Poor's 500 Index was down 8.91% for the month, by comparison, the review found.

The No. 1 top-performing ETF in September was, no surprise, a ProShares inverse ETF, the UltraShort Basic Materials (AMEX: SMN). It was up 51.99% for the month.

Citi also noted in the monthly report a new, but not unexpected, trend in ETF issuance: For September, new launches lurched to a halt. In fact, there were net liquidations in the ETF industry. The total number of ETF closings in 2008—the first year since 2006 in which an ETF was liquidated—now stands at more than 40 (see story here).

Among the major broad-based equity ETFs, performance was down 10.35% in September. Even the best-performing equity ETF, the WisdomTree Total Earnings Fund (AMEX: EXT), was down 2.59%.

 

Fund Name

Ticker

Market Return

WisdomTree Total Earnings

EXT

(2.59)

SPDR DJ Wilshire Total Market

TMW

(4.64)

WisdomTree Total Dividend

DTD

(5.37)

Claymore U.S.-1-Capital Markets Index

UEM

(5.41)

Claymore/Morningstar Services Super Sector

MZO

(7.15)

Source: Bloomberg and Citi Investment Research

 

The SPA MarketGrader 40 ETF (AMEX: SFV) was the biggest dog among broad-based ETFs, down 18.76%. SPA had three of the five worst-performing broad-based ETFs for the month:

 

Fund Name

Ticker

Market Return

SPA MarketGrader 40

SFV

(18.76)

SPA MarketGrader 100

SIH

(16.21)

PowerShares Value Line Timeliness Select

PIV

(15.51)

SPA MarketGrader 200

SNB

(15.12)

First Trust Value Line 100

FVL

(14.50)

Source: Bloomberg and Citi Investment Research

 

Among international ETFs, the average portfolio was down 13.74% for September, and down 29.63% for the year-to-date period. The best and worst performers among international ETFs were both sector-specific. The best among international ETFs was SPDR S&P International Health Care Sector ETF (AMEX: IRY), down 4.59%:

 

Fund Name

Ticker

Market Return

SPDR S&P International Health Care

IRY

(4.59)

SPDR S&P International Consumer Staples

IPS

(4.99)

WisdomTree International Consumer Staples

DPN

(5.30)

NETS TOPIX

TYI

(5.96)

WisdomTree Japan SmallCap Dividend

DFJ

(6.38)

Source: Bloomberg and Citi Investment Research

 

The worst-performing international ETF was targeted to the Real Estate sector, but country funds also took some major hits in September:

 

Fund Name

Ticker

Market Return

Claymore/AlphaShares China Real Estate

TAO

(26.64)

iShares MSCI Austria

EWO

(26.03)

Market Vectors Russia

RSX

(25.21)

NETS ISEQ 20

IQE

(24.00)

iShares MSCI Brazil

EWZ

(23.26)

Source: Bloomberg and Citi Investment Research

 

In terms of specific market cap asset classes, micro-cap ETFs were the top-performing segment:

 

Cap-Style

No. Funds

Sept. Avg. Return

YTD Avg. Return

Micro

3

(6.65)

(14.59)

Small

14

(8.52)

(12.59)

Mid

15

(11.95)

(17.23)

Large

23

(9.08)

(19.96)

Source: Bloomberg and Citi Investment Research

 

WisdomTree again led the way among market-cap ETFs. Its SmallCap Dividend Fund (NYSEArca: DES) was the only fund in the space to generate a positive return, up 1.32% for the month.

In terms of style, value ETFs outperformed growth ETFs for the third consecutive month, the Citi research showed:

 

Style

Capitalization

No. Funds

Sept. Avg. Return

YTD Avg. Return

Growth

Small

7

(10.60)

(15.05)

 

Large

10

(11.91)

(20.50)

 

Mid

8

(14.35)

(21.93)

 

 

 

 

 

Value

Small

8

(5.48)

(8.09)

 

Large

13

(8.34)

(20.09)

 

Mid

7

(8.39)

(15.31)

Source: Bloomberg and Citi Investment Research


 

Rydex S&P Small-Cap 600 Pure Value (AMEX: RZV) led the way among style plays, down 2.68%, while Vanguard Mid-Cap Growth (NYSEArca: VOT) was the style laggard, down 17.13% in September.

The best-performing sector ETFs were Consumer Staples portfolios, while Materials were the worst sector, and the demolition in the commodities space continued, with only gold ETFs avoiding poor performance (the top-five-performing commodities ETFs were all gold portfolios). Every sector ended September in negative territory:

 

Sector

No. Funds

Sept. Avg. Return

YTD Avg. Return

Consumer Staples

10

(2.88)

(7.84)

REITs

14

(3.09)

(4.92)

Financials

20

(4.12)

(23.35)

Consumer Discretionary

17

(6.98)

(14.16)

Healthcare

23

(7.32)

(8.96)

Utilities

9

(10.34)

(18.55)

Telecom

6

(13.87)

(28.82)

Information Tech

30

(14.25)

(21.70)

Industrials

18

(15.24)

(19.40)

Energy

18

(18.22)

(18.38)

Materials

9

(20.82)

(23.70)

Source: Bloomberg and Citi Investment Research

 

The top-performing individual sector ETFs in September were:

 

Fund

Ticker

September Return

KBW Regional Banking

KRE

11.50

iShares Dow Jones U.S. Home Construction

ITB

9.01

PowerShares Dynamic Banking

PJB

6.50

iShares Dow Jones U.S. Regional Banks

IAT

4.22

Regional Bank HOLDRS

RKH

3.76

Source: Bloomberg and Citi Investment Research

 

The worst-performing sector ETFs, by contract, were:

 

Fund

Ticker

September Return

SPDRs Metals & Mining

XME

(34.23)

Claymore/Delta Global Shipping

SEA

(31.61)

First Trust Energy AlphaDEX

FXN

(21.71)

Claymore/SWM Canadian Energy Income

ENY

(23.60)

iShares Dow Jones U.S. Basic Materials

IYM

(23.06)

Source: Bloomberg and Citi Investment Research

 

Among other major ETF categories covered in September performance are fixed income, currency, domestic dividend, commodities, leveraged and inverse portfolios. Here are the top performers for the month in each ETF category:

 

Fund *(category)

Ticker

September Return

Vanguard Extended Duration Treasury *(taxable fixed income)

EDV

3.52

Swiss Franc Elements ETN *(currency)

SZE

38.93

PowerShares HY Dividend Achievers *(domestic dividend)

PEY

10.50%

UBS E-TRACS CMCI Gold Total Return (commodities)

UBG

6.82%

PowerShares DB Gold Double Long (leveraged)

DGP

7.99%

ProShares UltraShort Basic Materials (inverse)

SMN

51.99%

Source: Bloomberg and Citi Investment Research

 

And here are the worst-performing ETFs among other ETF categories tracked by CitiGroup:

 

Fund

Ticker

September Return

PowerShares High Yield Corporate Bond (taxable fixed-income)

PHB

(16.70)

Euro Elements ETN (currency)

ERE

(24.30)

First Trust DJ Global Select Dividend (domestic dividend)

FGD

(17.17)

iPath DJ-AIG Platinum Total Return Sub-Index (commodities)

PGM

(30.73)

ProShares Ultra Basic Materials (leveraged)

UYM

(42.00)

ProShares UltraShort Financials (inverse)

SKF

(13.30)

Source: Bloomberg and Citi Investment Research

 

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Emerging Market ETFs… Five Ways to Play (Investment U, 10/21/09)
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A watershed event this week for ETFs (Canadian Business Blog, 11/5/09)
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