A Look at the iShares Dow Jones Total Market Sectors

February 1, 2007

Some of you are probably bored to death with all my postings about indexes and index fund returns. I promise that we are getting to the end of these posts. I have to tell you, I LOVE this kind of stuff. I love numbers. And the more I dive into this stuff, the more I’m convinced that the keys to a good portfolio are”

1. Prudent diversification

2. An asset allocation strategy based on your needs

3. Rebalancing when things get out of whack.

Earlier this week I posted the Dow Jones Total Market Index Sector Performance for 1992 – 2006. This was the performance of the actual index sectors, which to my knowledge weren’t available for people to invest in until iShares came along and started offering the ten sectors as exchange-traded funds in the summer of 2000. Below are the total returns for the ten sectors of the Dow Jones Total Market Index along with the Total Market Index Fund (IYY) which includes all ten sectors:

iShares Dow Jones Total Market Index Sector Funds

One thing I found quite aggrevating when calculating these numbers is that some of them are off by ONE BASIS POINT! For instance, iShares shows that IYZ had a total return of 32.37% for 2006, while I came up 32.38%. It’s not that big of a deal, but it drives me nuts that they don’t match exactly (see, I really am a perfectionist). I plan on doing a couple more follow-up posts analyzing these numbers and showing you how a portfolio of these funds would have performed. I’ll also get the numbers for the iShares fixed income ETFs so that we can see what impact it would have had on the portfolio.

10 responses to A Look at the iShares Dow Jones Total Market Sectors

  1. Hi JLP, very informative blog. I found this via blogtopsites. Thanks for sharing your views. I personally liked the sector funds table that you have shared today.

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  2. I love sectors also.

    You are a perfectionist !
    Great table you displayed, very nice.

  3. It’d be nice to see IYR (Real Estate index) in this mix as well. I wonder how it did.

  4. I am not a proponent of large cap index funds, but they can be useful in other sectors. One problem is that you own all the bad stocks in the index–not just the good ones.

    Here are some basics on ETFs and Index Funds:

    http://finance.webaplex.com/05/eft-or-index-fund/

  5. Hi:

    I tried your calculator and it didn’t work right. I put $100.00 for price and 10% inflation rate. It should have given me a future price of 161.051. (1.10)^5=1.61051×100=161.051.

    My intention is just to collaborate with others, as well as I expect others to collaborate with me.

    Sincerely,
    Fernando

  6. Nice to see the numbers! Just wondering… what conclusions do you take from this? Seems to me that oil/gas and basic materials do the best on average… And technology seems like a big loser! =)

  7. That is not ONE BASIS POINT. It is a tenth of a basis point.

  8. Sorry, you are right. That is ONE BASIS POINT.

    1 Basis Point = 1/100 of a percent

    http://en.wikipedia.org/wiki/Basis_point

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    […] Nickel complains about hotels nickel and diming for internet access (I think it’s ridiculous too). FMF discusses the cash back features of his American Express Blue card. Talk about recycling and you’ll get a link from me, this time Money Smart Life talks about the RecycleBank recycling program. JLP takes a look at the iShares Dow Jones Total Market Sectors funds. […]