Your Q1 ETF Scorecard

The first quarter of 2014 is history, and now it’s time to do a little review of the various sector exchange-traded funds (ETFs) to show how the market performed over the past three volatile months.

The first thing to note when looking at the performance table below of representative sector ETFs is that there was little actual movement in the major domestic equities such as the S&P 500, the Dow and the NASDAQ 100 in Q1. Despite a down January and an upbeat February, the markets are just about where they were at the start of the year.

Internationally, we saw a big sell-off in the China stock market, but most of that damage occurred in the first 10 weeks of the year. Over the past couple of weeks, stocks in China and in emerging markets have seen a marked comeback, as evidenced by the chart below of the iShares Chin Large-Cap ETF (FXI).

Another notable performance point in Q1 was the spike higher in bond prices. While most pundits were expecting interest rates, i.e. bond yields to spike higher as the Fed continues to taper its bond buying, the opposite has actually happened. The 7.64% rise in the iShares 20+ Year Treasury Bond (TLT) says it all about rising bond prices in Q1. Then there was a big boost in the commodity space in Q1, with oil, gold and the major commodities index in general showing strong upside through the first three months of 2014.

The interesting, and somewhat counterintuitive, performance in Q1 highlights the unpredictability of markets. It also clearly illustrates the fact that the conventional wisdom in the market is most-often wrong.

So, as an investor, what are the best ways to take advantage of the trends we witnessed in Q1? Right now, subscribers to my Successful Investing newsletter are benefitting from several of these counterintuitive sector moves with a combination of several ETFs. If you’d like to find out more about how you can get in on the current market’s moves, simply click here.