2012 has been a hectic year around the world, but the U.S. has been especially busy this year. We saw two new QE programs, the re-election of Barack Obama, the hottest year on record, extreme weather, and much more. But even still, markets have turned in a solid performance for the year, despite teetering on the edge of the fiscal cliff as the year draws to a close. To help give investors a better view of which market segments outperformed the rest, we outline the YTD performances of the ten largest ETFs in the world [for more ETF news and analysis subscribe to our free newsletter].
- SPDR S&P 500 (SPY): Weighing in with more than $115 billion in assets, SPY is by far the largest and most popular exchange traded product in the world. This year, the fund has raked in just over 15%, as it benefited from a strong Q1 and was able to hold momentum from there.
- SPDR Gold Trust (GLD): With all of the worries of inflation and currency debasement, this physically-backed gold fund has been in the limelight for the majority of 2012. Towering over the commodity space with $73 billion in assets, GLD was able to return over 8% to its investors. Note that GLD has never had a down year since inception.
- Emerging Markets ETF (VWO): The most popular emerging markets ETF earned its title with an expense ratio of just 20 basis points, outdoing its competitor, EEM, as far as assets are concerned. Interestingly enough, VWO has an almost identical YTD return to SPY, something that does not happen often. Jumping a little more than 15%, VWO has had a solid run for 2012.
- MSCI Emerging Markets Index Fund (EEM): Speaking of EEM, this fund trails VWO by about $13 billion in assets, but still ranks as the fourth largest ETF. EEM tracks the same index as VWO, so it should come as no surprise that it too has gained just over 15% on the year.
10 Largest ETFs YTD
- MSCI EAFE Index Fund (EFA): Taking fifth place, EFA has $38.4 billion in assets under management. At risk of sounding like a broken record, EFA had a solid year, gaining 15.4% as that seems to be the popular figure for the world’s most prolific ETPs [see also Where U.S. ETF Investors Invest Overseas].
- Core S&P 500 ETF (IVV): A direct competitor to SPY, this S&P 500 ETF reinvests its dividends automatically, a strategy that some prefer. In case you hadn’t already guessed it, this fund’s YTD performance came in eerily close to the rest of the pack at 15.4%.
- QQQ Fund (QQQ): The Nasdaq juggernaut has had a busy year, mostly at the beckoning of Apple (AAPL) who became the worlds largest company by market cap earlier in the year. QQQ returned a nice 17.8% for its investors this year, but with AAPL accounting for nearly 19% of the fund, this ETF will continue to be a slave to the tech giant’s movements.
- iBoxx $ Investment Grade Corporate Bond Fund (LQD): The largest bond ETF, LQD comes in with an asset base of $25.6 billion and an average daily volume topping 2 million shares. This year has watched fixed income drag behind equities, as evidenced by LQD’s 10% gain; a respectable jump, but still behind its rival asset class.
- Total Stock Market ETF (VTI): One of the most diverse funds in the world, VTI is home to more than 3,250 holdings at a cost of just 6 basis points. With an all-encompassing exposure to global stocks, VTI was able to gain 15.5% for 2012.
- Barclays TIPS Bond Fund (TIP): Rounding out the top ten comes this inflation-protected product. TIP has more than $22 billion in assets and an average daily volume eclipsing 1 million shares. Though its return on the year is by no means poor, TIP’s gain of 7.1% is dwarfed by competing funds in the space.
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Disclosure: Long VWO