Grow Your Portfolio the Intelligent Way

The Numbers Don’t Lie

By Jim Woods

Very few things in life are as irrefutable as numbers. Sure, statistics can be manipulated to support all sorts of claims (witness the political realm). But when it comes to pure numeric performance, well, the numbers don’t lie.

This week, I ran some numbers on the performance of some of the biggest exchange-traded funds (ETFs) here in the United States vs. some of the biggest ETFs around the world. Admittedly, this is a cross section of ETFs, some of which I look at each day to get a quick read on the markets.

Here are the top-five domestic ETF performers, year to date, that I monitor daily.

QQQ PowerShares QQQ 2.42 6.02 7.06
MDY S&P MidCap 400 SPDRs 0.38 5.59 5.83
IWM iShares Russell 2000 Index 0.15 6.71 5.37
IJR iShares S&P SmallCap 600 Index -0.59 6.03 4.36
SPY S&P 500 SPDRs 1.45 3.35 3.07

As you can see, each has had solid performance this year, with the tech-heavy PowerShares QQQ (QQQ) leading the charge higher, up a strong 7.06%.

I was happy about this situation, as I own QQQ in our Successful ETF Investing portfolio.

I then ran the numbers on the big international ETFs that I screen on a daily basis. One look at this segment made me even happier.

FXI iShares FTSE/Xinhua China 25 20.73 18.66 24.74
EWJ iShares MSCI Japan Index 3.47 15.92 18.19
EEB Claymore BNY BRIC 12.48 6.75 13.55
EEM iShares MSCI Emerg Mkts Index 8.61 7.54 11.57
EFA iShares MSCI EAFE Index Fund 2.34 9.83 10.77

Here we see that year to date, the iShares FTSE/Xinhua 25 Index (FXI), the benchmark fund for China’s large-cap stocks, has more than tripled the gains of the QQQ.

Now, if you’re a subscriber to Successful ETF Investing, you know we’ve been recommending FXI for some time, as well as another big winner on this list, the iShares MSCI EAFE Index Fund (EFA).

There are many reasons why international stocks are outperforming domestic stocks, and we’ll be writing more about that in greater detail in the weeks to come.

For now, it’s sufficient to say that international stocks aren’t facing the kinds of big headwinds domestic stocks are facing right now — headwinds that include a strong U.S. dollar, slow earnings growth and the end of quantitative easing (QE) by the Federal Reserve.

So, how do you know which international funds to own right now, and which ones to avoid? How about the best domestic funds? Do you know which sectors are likely to outpace the rest in 2015?

If you have questions such as these, then you need to check out my Successful ETF Investing newsletter, right now.

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