FYI: Its pretty easy to understand the appeal of indexing, particularly after a year like 2014. Less than one out of five active mutual fund managers[1] beat their respective benchmark last year. And those few that did beat their benchmarks did so by a pitiful margin of just 1.8% on average
Even worse, many fund managers are really just closet indexers. There is too much career risk in going against the grain, so most large fund managers tend to buy the same stocks and sink or swim together. So … why pay steep fees to active managers for underperformwhen you can buy an index mutual fund or ETF with expense ratios of 0.1% or even lower in some cases?
But indexing doesn't have to mean dumping your nest egg into an S&P 500 ETF like the SPDR S&P 500 ETF Trust (NYSEARCA:SPY[2]) and taking whatever the market gives you. Performance can vary wildly by sector, and if you can add value by allocating to individual sector funds, it makes all the sense in the world to try. For example, just by virtue of being out of the worst-performing sectors — energy in 2014 and utilities year-to-date in 2015 — you could have beaten the S&P 500 by a few percentage points.
Let's do a deep dive of each of the nine Select Sector SPDR ETFs. We’ll go over what each has to offer … and what it doesn't.
Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-trackerRegards,
Ted
http://investorplace.com/2015/03/9-select-sector-spdr-etfs-xlu-xli-xlp-xlb-xly-xlv-xlk-xle-xlf/print
