What the Results of the First Half 2014 Mean for Investors

Doug Fabian
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Posted: Jul 03, 2014 12:01 AM
What the Results of the First Half 2014 Mean for Investors

The first half of a most unusual year for the financial markets now is in the books, and that means it’s time to break out the halftime exchange-traded fund (ETF) scorecard to see which funds have led the charge higher, and how those funds compare to the exchange-traded funds representing the major market indices.

Let’s start by looking at the table below of the top-performing ETFs through the first half of the year. Note that the “%200DMA” column shows the percentage that each fund is above its 200-day moving average. This metric is important because it tells us how far extended a fund has become when compared to its long-term trend line.

Ticker

Name

YTD%

%200DMA

SCIF

Market Vectors India S/C

62.93

54.01

SCIN

Emerging Global Index India

49.44

43.25

GLDX

Global X Gold Explorers ETF

45.82

19.77

SMIN

iShares MSCI India Small Cap Index Fund

44.18

42.90

SILJ

Purefunds ISE Junior SIL-ETF

43.90

18.64

INXX

Emerging Global Shares Index

39.38

29.99

GDXJ

Market Vectors Junior Gold Miners ETF

36.10

14.59

GGGG

Global X Pure Gold Miners ETF

35.53

15.05

EPI

WisdomTree India Earnings

28.84

24.79

TAN

Claymore/MAC Global Solar Energy

26.69

11.70

As you can see by the table of the top 10 ETFs in the first half, it’s all about India, precious metals mining stocks, emerging markets and solar. The election in India of a pro-business Prime Minister was great for stocks in that country, and the rise in gold and silver prices helped mining stocks do very well. The rise in oil prices prompted renewed buying interest in alternative energy stocks like solar.

Now, as you can see, the huge gains in the top 10 ETFs beat the still very strong performance of the major market indices. The table below shows the ETFs we use to mirror the most important market measures.

Ticker

Name

YTD%

%200DMA

DIA

SPDR DJIA Trust

1.46

4.32

SPY

SPDR S&P 500 ETF Trust

5.97

7.19

IWM

iShares Russell 2000 ETF

2.99

5.50

EFA

iShares MSCI EAFE ETF

1.90

2.87

EEM

iShares MSCI Emerging Market

3.43

4.84

AGG

iShares Core U.S. Aggregate

2.79

1.55

TLT

iShares 20+ Year Treasury Bond

11.45

5.64

EMB

iShares JP Morgan USD Emerging Markets Bond

6.57

4.40

GLD

SPDR Gold Shares

10.27

3.13

OIL

iPath Goldman Sachs Crude Oil

10.60

8.05

Here we see that although there have been big gains in all of these market vital signs; we haven’t yet seen a situation where these markets have extended far beyond their respective 200-day moving averages.

The biggest move above the long-term trend line is in crude oil, with the iPath Goldman Sachs Crude Oil (OIL) 8.05% above its 200-day moving average. Right now, gold, bonds and European equities are slightly above their long-term trend lines.

In our Successful ETF Investing advisory service, we currently have exposure to alternative energy stocks, precious metals and mining stocks and emerging markets.