SAN DIEGO (ETFguide.com) - How
many more Dow 13,000 headlines can we bear? And what about the S&P 500 breaking
through all time highs? We've heard that one too.
Nearly forgotten throughout this
is the fact that other important indexes and the exchange-traded funds (ETFs)
tracking them have outshined both the Dow Industrials and S&P this year.
One such example is the stunning comeback of
emerging market stocks. Through the end of May, the Vanguard Emerging Markets
ETF (ticker: VWO) posted a 12.83 percent year-to-date gain, despite getting
socked in mid-February.
International stocks in developed economies are also
outperforming. The iShares MSCI EAFE ETF (ticker: EFA) has handedly beaten the
Dow and S&P 500 over the past five years and is doing it again in 2007 by
gaining 10.67 percent. Yet, the Dow and S&P still get most of the attention.
What about midcap stocks? In 2006 they were
laggards. This year they've reversed course by outperforming both large and
small cap stocks through the end of May. Right now there's 27 ETFs tracking
midcap equity indexes, take your pick.
And let's not forget about specific industry
sectors. Here too is another newsworthy event that didn't make it past most news
editors for whatever reason.
Despite advancing 8.69 percent, the S&P 500 as
tracked by the SPDRs (ticker: SPY) has still underperformed six of its very own
nine industry sectors. Through the end of May, the Materials Select Sector SPDR
(ticker: XLB) was ahead by 17.65 percent, Healthcare (ticker: XLV) was up 10.09
percent, Industrials (ticker: XLI) gained 12.01 percent, Energy (ticker: XLE)
increased 16.88 percent, and Utilities (ticker: XLU) advanced 14.53 percent.
Each of these ETFs follow a narrow group of sector specific stocks. Even
Technology (ticker: XLK), an out of favor group over the past several years, has
resurrected itself by posting a respectable year-to-date gain of 10.28 percent.
Too bad no one bothered to tell you that part of the
story.
This may come as a surprise to
the financial media, but the Dow and S&P 500 are no longer the only game in
town. True they may be the most recognizable stock indexes on the planet, but
that doesn't entitle them to exclusive coverage. Other important benchmarks do
exist. And not only do they merit attention by the financial media but by all
serious investors.
There are dozens of other index
ETFs that have outperformed yet remain ignored.
It's time we start remembering
the forgotten indexes.
