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Updated Periodic Table of iShares ETF Returns
By JLP | February 5, 2007
Here’s an updated ranking of the iShares sector funds that I posted about last week. This ranking includes the following:
1. The 10 iShares sector funds of the Dow Jones Total Market Index
2. The iShares Dow Jones Real Estate Index Fund (IYR)
3. The iShares MSCI EAFE Fund (EFA) – This is an international fund
4. The iShares Lehman Brothers Aggregate Bond Index Fund
Now for the rankings:
Now, here’s how they would have performed as a portfolio:
I constructed two different portfolios.
The Allocated Portfolio (Rebalanced Annually):
2001
70% – iShares DJ Sector Indexes (7% in each fund)
10% – iShares DJ Real Estate Index Fund
20% – Fixed Income
2002
50% – iShares DJ Sector Indexes (5% in each fund)
10% – iShares DJ Real Estate Index Fund
20% – iShares MSCI EAFE Fund
20% – Fixed Income
2003 – 2006
50% – iShares DJ Sector Indexes (5% in each fund)
10% – iShares DJ Real Estate Index Fund
20% – iShares MSCI EAFE Fund
20% – iShares Lehman Bros. Aggregate Bond Index Fund
The reason for the different portfolios is that the iShare funds weren’t available in every year.
Now, here’s how the portfolio would have performed:
The Equal-Weighted Portfolio (Rebalanced Annually):
2001
83.3% – iShares DJ Sector Indexes (8.33% in each fund)
8.33% – iShares DJ Real Estate Index Fund
8.33% – Fixed Income
2002
79.6% – iShares DJ Sector Indexes (7.96% in each fund)
7.96% – iShares DJ Real Estate Index Fund
7.96% – iShares MSCI EAFE Fund
7.96% – Fixed Income
2003 – 2006
79.6% – iShares DJ Sector Indexes (7.96% in each fund)
7.96% – iShares DJ Real Estate Index Fund
7.96% – iShares MSCI EAFE Fund
7.96% – iShares Lehman Bros. Aggregate Bond Index Fund
As the graphic below shows, this portfolio’s results were nearly identical to the Allocated Portfolio:
A 7.49% annualized rate of return doesn’t sound that great. However, it is important to note that 2001 and 2002 were murder on stock returns. It is also important to note that the portfolios were bouyed somewhat by the terrific performance of the Dow Jones Real Estate Index Fund, which had an annualized return of 19.99% over the last six years.
Oh, and if you’re interested, you can download an Excel file I put together with the annual returns.
Topics: Exchange-Traded Funds, Index Funds, Investing | 6 Comments »
February 6th, 2007 at 5:51 am
Those charts are telling in that you see that top investments one year can be at the bottom the next; and vice versa.
Some comparisons and contrasts of index funds and etfs:
http://finance.webaplex.com/05/eft-or-index-fund/
February 6th, 2007 at 6:45 am
Your annualized return is good but have you thought about giving it a boost with some stocks from the precious metals sector?
February 6th, 2007 at 12:34 pm
Thanks for adding IYR to the chart. Looks like its been performing well for the past few years.
February 6th, 2007 at 5:45 pm
If you were adequately invested globally you would have done a lot better, as can generally be seen by the performance of EFA each year. Of course this can change, but my general view is that 20% international is insufficient and 8% international is DEFINITELY insufficient.
February 6th, 2007 at 5:47 pm
I would also work in some emerging markets.
February 6th, 2007 at 5:55 pm
Rob,
Actually, over the last 20 years, the MSCI EAFE Index hasn’t done all that well (as you can see here). Yes, it has been stellar over the last 4 years but who knows how long that will continue.