By any measure, 2017 has so far been good year for investors. Out of the nearly 2,000 ETFs listed on U.S. exchanges, more than 80% were up on a year-to-date basis through March 28. Gainers have come from all segments of the market, but it's equities that have done the best.
Equities Lead The Pack
U.S. stocks, as measured by the SPDR S&P 500 (SPY), returned 5.7% during Q1. Many analysts called the move a "Trump rally" due to the promise of business-friendly economic policies from the new administration, including tax cuts, deregulation and infrastructure spending.
But the good fortune during the quarter wasn't limited to just U.S. stocks. International developed-market equities, as measured by the Vanguard FTSE Developed Markets ETF (VEA), climbed 8.4%; and emerging markets, as measured by the Vanguard FTSE Emerging Markets ETF (VWO), rallied 12.5%, thanks to an improving global economic backdrop.
Even fixed-income ETFs participated in this year's gains, despite an early rate hike from the Federal Reserve in March. The iShares 20+ Year Treasury Bond ETF (TLT) added 1.7%; the iShares JP Morgan USD Emerging Markets Bond ETF (EMB) gained 4%; the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) returned 1.7%; the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) rose by 1%; and the iShares Core U.S. Aggregate Bond ETF (AGG) edged up by 0.7%.
On the other hand, commodities were notable laggards during the first quarter, losing 5.4% in the period, based on the PowerShares DB Commodity Index Tracking Fund (DBC). Gold prices performed well―the SPDR Gold Trust (GLD) jumped 8.6% in the year-to-date period―but that wasn't enough to offset the 9.7% drop in crude oil, which has the greatest weighting in most broad commodity indices.
|Emerging Market Equities||VWO||12.5%|
|International, Developed Equities||VEA||8.4%|
|Emerging Market Bonds (USD-Denominated)||EMB||4.0%|
|U.S. Long-Term Treasuries||TLT||1.7%|
|U.S. High-Yield Corporate Bonds||HYG||1.7%|
|U.S. Investment Grade Corporate Bonds||LQD||1.0%|
|U.S. Investment Grade Bonds||AGG||0.7%|