Besides losses, ETF launches lurch to a halt in the month as brutal market conditions send investors and issuers to the sidelines.
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
