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A Look at the iShares Dow Jones Total Market Sectors

By JLP | 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.

Topics: Exchange-Traded Funds, Index Funds, Investing | 10 Comments »


10 Responses to “A Look at the iShares Dow Jones Total Market Sectors”

  1. OptionPundit Says:
    February 2nd, 2007 at 11:31 am

    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.

    As such I am an option trader and started this blog http://www.OptionPundit.net couple of weeks back. Not sure if your readers are interested in knowing about options. If yes, pls feel free to mention. There is no fee from by blog, I share basic as well as advance option trading strategies with transaction details and also explain risk reward graphs so as my readers can learn these.

    Cheers and I am going to visit your blog more often, keep it up and all the best,
    OptionPundit
    http://www.OptionPundit.net

  2. moneymonk Says:
    February 2nd, 2007 at 3:45 pm

    I love sectors also.

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

  3. Savvy Steward Says:
    February 2nd, 2007 at 6:45 pm

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

  4. Nagel Says:
    February 3rd, 2007 at 9:52 am

    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. Fernando Guzmán Cavero Says:
    February 4th, 2007 at 1:34 pm

    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. » Linky Linky! on Blueprint for Financial Prosperity Says:
    February 4th, 2007 at 8:37 pm

    […] 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. […]

  7. Miller Says:
    February 4th, 2007 at 10:17 pm

    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! =)

  8. AC Says:
    February 7th, 2007 at 5:37 pm

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

  9. AC Says:
    February 7th, 2007 at 5:39 pm

    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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    March 15th, 2009 at 11:24 pm

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