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ETF Performance Report: Best First Quarter in Over a Decade

tlydon@globaltrend.com (Tom Lydon)

U.S. equities and stock exchange traded funds continued their climb through March. Meanwhile, the Dow and S&P 500 posted their largest first-quarter gain since 1998.

The Dow Jones Industrial Average ended the month up 2%, firmly above its 13,000 level. The S&P 500 added 3.1% and crossed over the psychological 1,400 barrier, levels not seen since before the 2008 financial crisis. Lastly, the Nasdaq Composite finished 4.2% higher.

Over the first three months, the Dow rose 8.1%, the S&P gained 12% and the Nasdaq increased 18.7%.

At the beginning of March, resistance among Greek bond holders to swap their debt provided a brief scare, pressuring the broad equities market. But major banks and pensions funds came out in full support of the debt default swaps. Relief over Greek swaps allayed market uncertainty and lifted overall stocks in at the beginning of the month.

In the U.S., we saw better-than-expected February employment, strong retail sales data and the Fed upgraded its economic outlook. The Federal Reserve also hinted at a potential QE3 as unemployment was not falling fast enough and the economy needs to expand faster.

Meanwhile, investors continued to move away from safe-haven Treasuries and into the equities rally, causing Treasury yields to rise.

While the U.S. showed solid economic data, poor China forecasts weighed on markets. A potential housing bubble has put observers whispering at a “hard landing” in China.

At the end of the month, equities leveled off as investors took on rounds of profit taking, but buyers were there to jump in at every dip.

Top performing funds over March included those that followed financials and U.S. homebuilders.

Top performing funds over the first three months include those that cover some emerging market countries, including Vietnam and Egypt, small-caps and financials.

For more information on ETF performances, visit our ETF performance reports categoryClick here to see the full February performance report.

Visit our ETF Analyzer for the most up-to-date ETF performance numbers.

Max Chen contributed to this article.