Index Fund Performance
EIRL, EWL, EWK, EWU and GXF
In sizing up the field of index funds, a straightforward tack is to begin with a list of the high flyers. Then other traits such as volatility and liquidity can be brought to bear on the subject in addition to the capital gains.
In order to obtain a balanced view of performance, the window of evaluation should cover a period in which the market has encountered a boom as well as a bust. On one hand, a longish timespan provides a wealth of data for a thorough survey of performance. On the other hand, the turnout in recent years is likely to be a better guide to the prospects going forward than the record of the remote past.
The vale of exchange traded funds has seen explosive growth around the turn of the millennium. Given the welter of saplings, an investor who insists on a long history will thereby rule out a raft of candidates. In this setting, a track record of three years seems like a fitting compromise in trading off the opposing factors of ample data versus plentiful candidates.
With these points in mind, the chosen window spans three years ending in spring 2014. From this standpoint, the front-runners take the form of index funds dealing with Ireland, Switzerland, Belgium, Britain and the Nordic region.
In addition to the return on investment over the entire stretch, a crucial issue concerns the volatility of each vehicle along the way. In gauging the extent of turbulence, a handy aid lies in a concurrent plot of the index funds. For this purpose, a suitable scheme involves a visual display spanning a stretch of 5 years ending in spring 2014.
Based on the capital gains over the past three years, the best vessels sport the ticker symbols of EIRL, EWL, EWK, EWU and GXF. Over this stretch, the index fund for Ireland (EIRL) outpaced the chief benchmark of the stock market – namely, SPY – by a solid margin. On the other hand, the other four vehicles lagged the latter beacon by varying degrees.
Meanwhile, over the longer span of half a decade, the Irish fund beat out SPY by a modest amount. During this period, the turnout for Switzerland (EWL) was comparable to the flagship benchmark of the stock market. By contrast, the remaining three contenders turned in worse results. In particular, Britain (EWU) brought up the rear amongst the top names in the European theater.
NOTE: The full briefing is a document in PDF form. The publication, titled “Top Markets for ETF Investing in Europe”, may be viewed or downloaded here.