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Dow Jones Total Market Performance in 2006
By JLP | November 22, 2006
It is looking like 2006 is going to be a great year for the Dow Jones Total Market Index. Take a look at this graphic I seized from the Excel spreadsheet I use:
That’s not too shabby! If buying 10 different ETFs isn’t your cup of tea, you can buy the iShares Dow Jones Total Market Index ETF (IYY) or a similar mutual fund, which will include all 10 of the sectors above (excluding the MSCI EAFE index). However, the ten sectors purchased individually have returned 14.83% so far this year (including dividends but before fees and commissions) while IYY has returned 13.68% (again, including dividends but before fees and commissions). Commissions are definitely something to consider as they can really eat into your returns and negate any sort of advantage there is to buying the ten sectors individually.
I would only consider this strategy if you have a lot of money or are using a company like FOLIOfn, which charges a flat fee either monthly or annually. Using FOLIOfn’s Bronze pricing platform, which runs $199 per year, it would take an account value of more than $19,900 to get the fees to under 1% ($199 ÷ .01 = $19,900).
One of these days I’ll get around to posting the historical information regarding this strategy. I haven’t done it yet because my spreadsheet needs some fine-tuning. I also need to update the PrudentPortfolio, which I promise to do before the end of the year.
Topics: Exchange-Traded Funds, Index Funds, Investing | No Comments »